Wednesday, September 28, 2005

The Times They Are A-Changin'

My wife and I attended our daughter's 5th grade Open House tonight. We also have a 13-year old son, so we've been to our fair share of these events. What was interesting today was the # of questions that parents asked about the Internet.

"Using the Internet for research seems so ... easy. Is that okay?"

"How can we keep our kids from seeing dirty pictures while working on school assignments?"

"How do we convince our child that just because they found something on the Internet, doesn’t mean it's accurate?"

"How can I convince my child that it's good to visit a library to do research, not just fire up a web browser? - Or am I wrong about this??"


Amazing. No one ever raised these issues back when our boy was a 5th grader! Talk about the Internet took up almost 15 minutes' worth of a 30-minute session.

I couldn't help but think that the Internet is changing everything. What a cool time to be alive, at the dawn of a new age. I am not sure that they'll be better students, but for sure, our kids will be different students than we were, as they learn to deal with this vast resource.



Monday, September 26, 2005

PR as Profit Center, Truth or Fiction?

What follows below is my contribution to the PR Blog Week, which ended last week. It comprises some thoughts that have been expressed here before...


Why do we work? What are we doing here? What is the value of Public Relations? Are we offering our clients genuine value or are we just drawing a paycheck, secretly worried that we'll soon be revealed as frauds? After all, we don't make anything. We don't build buildings. We don't save lives. Our inventory of ideas, words, paperwork and tsotchkes are as ephemeral as air.

With so little to point to in terms of "products," it's natural for our clients to occasionally wonder whether or not they are getting their money's worth from the PR program. How do you accurately assess whether or not your client's reputation has improved? How do you measure buzz?

Maybe you don't. Maybe you can't.

Maybe that sounds defeatist? Perhaps, but consider this: since the emergence of Edward Bernays, Godfather of PR, the state of PR measurement has given us only two "accepted" standards: "Ad Value Equivalency" and "Media Content Analysis (a.k.a. Share of Voice)." And for the most part, these measurement models are hokum.

Loosely defined, Ad Value Equivalency equates the value of a PR "hit" against the value of an advertisement in the same magazine in which the article appeared, e.g., "If the clipping in The Economist is 4-inches x 4-inches and a 4-inch x 4-inch advertisement in The Economist costs $225,000, then the PR clip is worth $225,000."

Do you see the inherent flaw in this logic?

The measurement experts at KD Paine have considered this issue and while they do not advocate for the Ad Value Equivalency model, they do make a cogent case for why it has its merits:

"Since ad rates are an indication of relative credibility, an argument can be made for using ad rates as a factor in analyzing media. How much a publication charges for advertising is a reflection not just of its circulation, but also of its reputation versus its peers…While some would argue that an eyeball reached is an eyeball communicated to…when you factor in ad rates you get a higher degree of correlation with ensuing customer behavior."

That's all well and good, but it's still doesn't pass the sniff test. Consider the original Economist example cited above. The Economist is a credible news outlet. Most clients would be thrilled with a positive mention in this widely-read, highly credentialed magazine. But, what if the core audience for your client's product is a die-hard National Enquirer reader? I won't pretend that there is no crossover between the two audiences, but let's safely assume that it's slight. In that case, despite The Economist's more credible reputation and higher ad rates, its value to your client is inconsequential compared to the value of a feature in the National Enquirer!

It gets more complicated, however: whether we want to admit it to ourselves or not, the National Enquirer is a very popular magazine; its ad rates are probably not much less than The Economist's! Yet, most adherents of the Ad Value Equivalency model recognize both hits based only on their ad placement value, and thus the article would be scored the same whether in The Economist or the National Enquirer.

Now let's consider "Media Content Analysis." This approach focuses not only on where coverage appears but how well the client is positioned within the article - it considers context. I don't have a major beef with Media Content Analysis. Certainly it is valuable for the client to know whether or not their message is being accurately communicated in the media, and to compare this traction to the progress made by their competitors. One major downside to MCA is its cost: it is a time-intensive, subjective exercise that does not come cheap; in some cases, the measurement can cost more than the PR program!

And while we're on the subject, let's consider the sums spent by our clients. Anywhere from $60,000 to $1M a year is spent on the average PR program. That's a lot of ka-ching. So call me Scrooge, but I feel as if our clients deserve to know more about their PR success than what Media Content Analysis reports can provide. It's "nice to know" that the client's message is gaining ground and that they are gaining "share of voice" in published industry features. But is this "NEED TO KNOW" information? And should they have to spend a fortune to learn that the basic PR stuff is working?

The PR pro that waltzes into the client's boardroom to brag about their Ad Value Equivalency score and/or increased Share Of Voice typically knows very little about how to take their program to the next level. If PR can't move the needle on SALES, we'll never earn that coveted seat in the Boardroom. Marketing/PR is considered a cost center only because we've never engaged in the rigorous discipline to prove otherwise. And our clients know it.

This premise is borne out by a survey we conducted earlier this year with the respected marketing consultancy, Launch Pad. Our goal was to discern the differing views of Public Relations by Sales and Marketing execs. The results were striking.

  • Over 50% of all Sales and Marketing respondents said PR impacts Lead Quality.
  • About 50% of all respondents said PR impacts the length of the Sales Cycle.
  • About 25% of all respondents said PR can increase the size of a first-time order.
  • Most tellingly, 49% said that Lead Generation was the best measure of PR success.
  • Yet just 30% of all respondents felt that Lead Generation is a function of PR! And fully 36% of respondents "sometimes" to "never" use PR in the Sales process!
Think about that: you get a stellar hit in The Wall Street Journal, and of the 100 sales reps within the client company, 36 of them never use the reprint in a sales call. The phone may be ringing off the hook with calls from Journal-reading sales prospects, yet 70 out of 100 marketing executives told us that PR has no impact on Lead Generation. Doesn't that bother you? Don't you think that we deserve a li'l credit?

The PR industry talks a good game about bottom-line impacts but clearly our core audiences are still scratching their collective heads. Both Sales and Marketing executives seem to intuit that PR has a beneficial role in the sales process (well, 49 percent of 'em, anyway), but have essentially given up on measuring that benefit.

Trust me, no one will care about "Share of Voice" when the revenues are in free-fall. As is so often the case, the marketing budget will get hacked and you'll lose the account. Sorry, but remember that PR is considered a cost center, not a revenue engine.

But what if the PR team can show that sales leads that came through the PR channel are the only leads to consistently make it through the Sales funnel to the deal close? In that case, PR can be salvaged at the expense of other programs.

It is possible - yes, it is! - to calculate PR's revenue contribution. But yea, it's a pain-in-the-butt and requires collaboration between the Sales, Marketing, Finance and Web/IT organizations within the client organization. It is a process that requires optimization of the client's Web site forms and analytics, as well as their online CRM application. Even after all that, the system won't be perfect: it will only be able to measure PR's impact on inbound lead flow; benefits to the outbound sales process, while important, will not be captured… Also, this "PROI" model can't account for the fact that some of the datapoints will be self-reported by the clients' prospects. Not perfect, but a quantum leap beyond today's "acceptable" metrics.

Imagine the glee on the VP of Marketing's face when she can show her CEO that "22 percent of all inbound leads came from our PR program… Of those, 40 percent were qualified deals… Of those, 19 percent converted to sales." Pretty cool, eh?

It gets better. Once a deal has been tagged as having originated in the PR channel, the client can continue to track it through its customer lifecycle. A year later - or 3, or 5! - the VP can report to her CEO that, "40 percent of the deals that came to us through PR are still customers, 5 years later; this represents the lowest churn in our base… perhaps it is because prospects who came to us via unbiased media reports had the clearest perspective on our strengths and weaknesses…"

Compare statements such as these with, "If we'd bought a 4-inch x 4-inch advertisement, that same PR clip would have cost us $225,000."

No contest.

The fact is, Ad-Value Equivalency, Media Content Analysis, etc., have no meaningful, LONG-TERM impact on the perceived value of PR in the minds of the C-Suite executives who pay agency invoices. The CEO, CFO and CMO care about MONEY. They know implicitly that reputation drives REVENUE, which is the only reason they care about reputation in the first place.

It's also the reason so many of today's marketers are being tasked with "metrics." Virtually every other marketing program has been automated in some way or another, and thus can be measured. PR stands alone on the mountaintop, thinking itself unmeasurable - but we all know by now that being "hard to quantify" does not make us unassailable! Sooner or later, for the whole PR industry, we'll need to be able to point to our role as a profit center. When that day comes, if we can't prove it - they won't pay for it.

A Comment on my Dyson Post by Morgan McLintic

First off you should know, dear reader, that I mostly loathe my competitors. An angry, mangy, junkyard dog got to chewing on my Competitive Bone when I was up-n-coming, and now a red mist tends to descend over my eyes when I think about the competition.

But then I meet some pretty cool people in my travels, like Morgan McLintic of LewisPR (viva the independents!), who sent me a note about my Dyson post. I removed the ability to comment on my posts, because every 4th comment was porn spam, so, I am posting Morgan's comment verbatim, below...

"Hey Todd - your point is well made that over-reliance on one anchor account is a strategic risk. That client can suck up talent, will often be unpopular to work on, and can be damaging when it goes. Witness the recent changes associated with the Sun move as a good case in point.

"And agencies should also diversify to spread risk. That means different sectors sure, but also geographic diversification. If you are over-reliant on one country - that too is a risk. I think then that while you don't just want to have a policy of putting flags on the map, it is important to push internationally into new markets. Then you are hedged against recession in any one, just as you are hedged against industrial sector recession.

"There are risks involved in this but PR is not a capital intensive industry. As you say, find a talented person and give them room to deliver on their potential.News is global. Markets are global. And agencies need to respond to that. There's a risk in being too domestic too, so the balance is often a hard one."

For the record, I agree on all fronts. Great minds think alike, eh, Morgan?

Tuesday, September 20, 2005

Check It Out

Here's my contribution to the Global PR Blog Week festival-of-words. :)

Thanks for reading.

Monday, September 19, 2005

Global PR Blog Week

Hurrah! Hurrah! It's Global PR Blog Week.

Seriously, stop reading my blog and check it out. I am honored to say that I am one of the authors (my piece will be published on Tuesday, 9/20), but don't wait: there is a metric ton of compelling stuff to be read about PR, blogs, the future of our industry.

Wednesday, September 14, 2005

Dealing With Tim Dyson's Dark Predictions

About a month ago, without naming any names, Tim Dyson predicted the imminent demise of some of our PR industry peers:

“I fully expect to see one or maybe two firms crash out in the next few months. The firms won't be small fry, they'll be businesses that have been around a while and have taken steps to build up internationally. Their demise will be a result of two equal and opposite forces: a drive in one direction to go global while at the same time being driven in the other direction to be more local. These are tough pressures for medium sized businesses to take on at the best of times. The agencies I see being at risk are ones that became too dependent on one or two clients and equally a handful of their staff.”
Dyson is writing about 2 different evils, it is important to note: first is “over-extension” otherwise known by moms everywhere as “biting off more than you can chew.” That’s not always a bad thing - if revenues support it, mistakes of over-extension can be overcome by slowing down, cutting costs, and/or just gutting it out until the new offices or initiatives can be integrated and start making their own contributions.

The second evil, more onerous, and one that I’ve written about time and again, is “over-reliance.” As Dyson noted in a (somewhat defensive) follow-up post,

“one lesson we should all have learned when the bubble burst was to make sure no one client or staff member could bring an agency down.”
Amen, brother.

I can tell you from first-hand experience that our San Francisco office is already benefiting from the early fractures predicted by Dyson. For the last few months we’ve suffered from a talent shortage, but lately we’ve seen a flood of resumes come over the transom, from talented people who currently work at exactly the types of firms that Dyson described: mid-to-large-sized, independent PR firms with a few-too-many international offices and an over-reliance on 1 or 2 big accounts to pay for that unwieldy infrastructure.

What are these candidates telling us?

“I love it that you are small but growing fast – that is the kind of environment I am looking for; I want to be able to make a difference!”

Now, we’re not exactly a boutique – we’re in the top 50 nationwide among independent firms, with 2 offices, over 60 staffers and 50-odd accounts, etc. etc. But compared to the Big Guys, yea, we’re small-fry. And we’re new – although many of us have worked together for years, our brand is just 2+ years old. The superstar who runs our SF office came to us 6 years ago as an Account Exec. Try to get that type of career opportunity at one of the big, established firms!

Okay, I am rambling. Here’s the point of this post: Dyson’s right. A new wave of shit is inching its way toward the fan, because a handful of important agencies refused to learn the lessons of the Dot-Bomb. To be successful in the future, for the long-term, agency leaders must FOCUS & DIVERSIFY.

Do a few things well, in the geographies you know best. Diversify your risk factors: if you’re in a position where the loss of any one client would force you to fire a single person, you’ve over-extended yourself. Keep costs down. Invest in differentiation, not pushpins for the world map. Attract and retain talent but remember that no one should be irreplaceable.

You don’t have to be invincible, but you must be invulnerable. If you can’t afford to lose, you’re already a loser.

Did I get that right, Tim?

Friday, September 09, 2005

You Should Know Sam

Just walked out of a meeting with Sam Whitmore, of MediaSurvey. If you don't know Sam, you ought to. Former head honcho of editorial at the ZD Empire, and a heckuva nice guy.

We had a good chat about the future direction of MediaSurvey, and I was impressed and optimistic. I recommend you reach out to Sam (and his new managing editor, Christy Andrade), to see how he can help your agency or in-house comms group better compete for market- and mindshare.

Wednesday, September 07, 2005

Is "Good Enough" Good Enough?

Got in a li'l tiff with my son yesterday. He had completed a minor school assignment but it looked kind of sloppy to my wife and me. We asked him to re-do it; it would take all of 5 minutes to complete - but when you're 13 years old and your 101 buddies are blasting away on IM, 5 minutes is a precious commodity.

He didn't want to do it. It was, he said, "Good enough."

Is "good enough" good enough?

I explained to my son that globalization and the Internet were allowing millions of talented and dedicated people worldwide to compete for the same jobs (by the way, Esquire recently published a hilarious article on this subject). I described the scads of people I'd met over the years who toiled away in thankless jobs because somewhere along the way they had decided that "good enough" was good enough.

But he is 13 - a tanned, blonde, athletic and whipsmart lil sonnuvagun. You can't talk sense to a tanned, blonde, athletic and whipsmart lil sonnuvagun. So I shut off the computer and marched his butt back to the dining room table to re-do the assignment, just because I said so. And feeling so damn old as I did it. ;)

Anyway, this got me thinking. A few weeks ago, an old friend was describing how her start-up would allow people to collaborate more effectively, and get past the functional evils of Outlook. I've handled my fair shar of groupware accounts and sighed, "Lady, it's a nice vision, but sometimes 'good enough' is good enough. Flossing your teeth will make your gums and teeth strong and healthy - but it's kind of a hassle; for most people, a session with the toothbrush is good enough...Same goes for Outlook..."

I am a bit ashamed, now, in retrospect. "Good enough" is NEVER good enough!

"Good enough" won't put a man on the moon.

"Good enough" won't cure polio - or cancer - or the common cold.

"Good enough" won't allow us to compete in a global economy.

"Good enough" is for losers.

Hmm...maybe that's how I should have explained it to my son.

Tuesday, September 06, 2005

The End Of Our Brightest Chapter

You wouldn't be surprised to learn that carting around a 200-lb. dog can be cumbersome. Making such a big boy clamber in-and-out of an SUV can take a while and always looks mildly ridiculous... But, you might be surprised to learn that when you own a mastiff, you happily ignore such challenges and take him with you EVERYWHERE. That's what we did with Owen. We brought him to the coffeeshop, to Home Depot, to restaurants, to the grocery store, to Carmel-by-the-Sea, to the top of Mount Diablo: basically, whenever we hopped in the car, our bosom companion joined us, panting and farting and drooling with quiet joy. Such a perfect dog.

Long time readers will remember Owen from the "funny" post and the "not so funny" post. This will be the last post.

On Friday, Sept. 2, we realized that Owen's degenerative bone disorder was making life too difficult; to keep him alive any longer would have been selfishness. He was in pain, and no amount of surgery would make him better. He was just 2.5 years old, a baby - our big, hairy baby.

It's hard to write with any eloquence about this subject. To write about how we rattle around the house ... about how we tested a score of different wind-chimes before we found a deep, resonant tone that will remind us of his huge soul with every breeze ...

It all sounds silly; such fuss over a dog. In fact, it is quite easy and rational to step back and say, "Thank God our family is healthy... and imagine what the people in New Orleans are going through, with Hurricane Katrina ..." It's all relative, I guess. For now, for a while, this is the pain that is closest to us, and we're just muddling through ...

Farewell, old friend.

Thursday, September 01, 2005

Shiny Object Syndrome

A client came in the other day, fretting about getting the program to the next level.

The ink has been pretty darn good, actually, and a recent analyst tour was a great success... program elements which, for all my talk of sales results, are obviously still important. So what's the problem, exactly?

"I am worried that we're not paying enough attention to blogs," he said.

I excuse myself to check in with the team. They confirm that this fella is obsessed with the blogosphere. In fact, he'll go a day or two without responding to genuine editorial opportunities, but, tell him that a dude in Iowa mentioned the company in a (barely-read) blog, and he jumps all over it.

Why?

'Cuz "blogging" is "cool."

Perfect example of Shiny Object Syndrome. Some clients lack the confidence in their company, skills, product or story to do what's right for the program, and instead rely on chasing after every buzzword, in hopes of cresting at least one of the emerging hype waves.

This goes for PR stuff but is even more dangerous when the client is willing to change their entire raison d'etre in order to appear hip. Remember when the hosted model first became a big deal; when Salesforce.com told us that "Software is dead"? Remember how alluvasudden a third of your clients started scrambling to describe their solution as "hosted"? - How some even went to the trouble of re-architecting their software to be able to make the claim? - How some decided that a subscription model like Salesforce.com's was the way to go, even when they had plenty of lucrative-but-traditional licensing deals in the pipeline?

I won't be so extreme as to suggest that a company should never re-examine its way of doing things: that's healthy and to be expected. All we ask for is a rational approach. Shiny Object Syndrome is marked by a headlong and heedless rush; but, lasting businesses are built when business and PR plans are carefully plotted and sculpted - not thrown against the wall to see what sticks.