Wednesday, March 29, 2006

Wouldst Thou Drink From The Holy Grail?

In response to this age-old post, which briefly described the process that P&G used to determine PR's true bottom-line value (hallelujah!), this week I received a note from Mark Weiner, who heads up Delahaye, the measurement firm that aided the consumer giant:
The method that P&G used is called "marketing mix modeling" which ties multiple streams of marketing data -- including PR, advertising, price promotions, direct marketing, the Internet, sales in terms of dollars and units, and more -- through a multiple regression anaysis by date, market and campaign. By looking at sales results over time and from market to market along with the marketing activities present at that time, the statistical model identifies the extent to which each marketing agent contributes to sales.

Delahaye, the research-based consulting firm I lead, has worked on dozens of similar analyses for a variety of companies. In each case, in categories as diverse as automobiles, telecom, entertainment, consumer package goods, financial services companies and more, we find the same result over and over again: PR works, delivering an ROI that is the best among all marketing agents. Whereas mass-market TV advertising delivers a return of roughly $1.25 for every dollar spent; and whereas price promotions lose a quarter for every dollar spent; PR delivers from $3.00 to $8.00. At the same time, PR in the form of marketing media relations lifts all boats: in a positive PR environment, the advertising is more effective, the telemarketing more efficient and so on.

Typical PR data won't work: simple tabulations of clips, ad value or impressions repeatedly fail. What's required is PR data which are both a) consistent and integratable with GRPs from the marketing world, and, b) representative of PR's unique role within the marketing mix (only semi-controllable at best).

The question is whether the PR profession is prepared to take advantage of the opportunity. As you rightly point out, the advertising trades have broken this story rather than the PR media. The Ad Age story ran months ago and it is only in this week's issue of PR Week that the P&G/Delahaye story appears. The Council of PR Firms published a booklet on the subject but the PRSA, IABC and other leading professional bodies haven't been touting this extraordinarily important development.
As long-time readers know, the subject of PR Measurement fascinates me. In fact our agency developed its own methodology - after a 2-year research effort - to help clients measure PR's impact on Sales. (Our approach is complementary to Delahaye's marketing mix modeling.)

But honestly, as challenging as it was to develop our approach, the HARDER part has been convincing fellow PR pros and even CLIENTS that tying PR to Sales results is not only achievable, but also worth the additional time/cost/effort.

So I am not surprised that Delahaye has experienced frustrating amounts of hesitation on the part of the PR industry. I am saddened, but not surprised.

PR pundits (myself included) spend so much time, lately, debating the finer points of new trends in media consumption, and that's important & laudable... But, I will continue to insist that our cleverness in communications will never gain PR a seat at the Boardroom table if we don't also wise up to the "Measurement Mandate."

5 Comments:

Anonymous Ike said...

It's not just the measurement, Todd. It's the ability of the PR practitioner to effectively communicate the math.

Yes, I said math.

Your formula/tool/algorithm may have fantastic merit and be spot on, but you have to be able to explain it. The explanation of the methodology must be complete, yet short, yet thorough, yet attainable. And you have to leave time for the actual results. And it has to not smack of "spin."

I know a lot of people (coming from broadcast news) that know how to present. But they can't balance a checkbook to save their lives. Will this be the watershed that truly separates the new generation of PR from the old?

March 29, 2006  
Blogger PR-Guy said...

Great points, Ike. The fact that PR people suck at math is now Conventional Wisdom.

But while I'd LIKE to think that Measurement will separate new from old PR archetypes, and I DO think it will play some role, my guess is that Web 2.0/Consumer-Generated-Media will be the first watershed... then that bubble will burst and we'll all wrap our minds around measurement (again, finally, once and for all).

March 29, 2006  
Blogger HarryC said...

The big question is the methodology. I haven't looked at regressionj analysis in 20 years and have no way of knowing if these measurement techniques are sound, except that it appeals to my common sense(;~]

The post was a real pick-me-up. I feel better than I've felt all day!

March 29, 2006  
Blogger John Wagner said...

Todd:

You'd better be careful ... if you say publicly that clients don't want to measure, or won't pay for measurement, you'll incur the wrath of the PR Measurement Police, as I did back in December.

March 30, 2006  
Anonymous Mark Weiner said...

It's been great to see the discussion unfold. Ike makes a solid point when he refers to "PR and Math," and the PR profession's inability or unwillingness to understand it. The larger challenge, in my opinion, is how to communicate the business value of PR without using math: the language of the board room is rooted in data, not "buzz," not "impressions" and not "ad values."

It's been said that the dinosaurs would still be here if they could only have predicted the weather. Those PR people who choose not to communicate results in the language of busines risk more than being further marginalized. Leaders will be rewarded, those who go along will be safe and those who avoid the magnitude of the current reality will be extinct.

April 06, 2006  

Post a Comment

Links to this post:

Create a Link

<< Home