Okay, we’re not allowed to flog our own wares on this blog, but I trust it’s okay to flog someone else’s! Since so many of us wax on about the challenges of figuring ROI on communications efforts, I would be remiss not to share a cool new tool that one of our fellow bloggers, Merry Elrick, has created to make this a whole lot easier. Merry kindly walked me through her system a month or so ago, and I found it fascinating, and very different from anything I’ve seen in the PR measurement space thus far.

Merry’s web-based system, called DataDriven MarCom™, is a one-stop portal in which to store all costs related to each tactic in your marketing communications arsenal, along with (most importantly) details of every resulting lead and/or sale from each of those efforts. In other words, for every campaign, you (the communicator) would log-in costs for every ad, every direct mail piece, every media campaign, and so on. Then, as leads roll-in, you work in tandem with your sales department to insert contact information for leads generated by each campaign. The sales person assigned to each lead works it, and logs in the appropriate sales revenues if/when a sale results. (If your company is already working with a CRM package, I believe there is a way to link databases.)

A suite of report options allows you to quickly see which campaigns and tactics are working, and which are not, by comparing the costs of each effort against the numbers of leads and revenues resulting. Since the tracking is done in ‘real time,’ the communicator is able to change strategy and/or tactics quickly when necessary.

Anyway, it’s darned clever! I have to congratulate Merry on her innovativeness, (and bravery in expanding her career as a counselor into software entrepreneurship), and hope others on this blog will give it a whirl. The thinking behind the drill-downs is an exercise in good measurement, in my opinion.

Back in late December, I wrote a post for my blog about the disagreement between Katie Paine and John Wagner over the value of measuring communication. For some unknown reason, the Ragan Report just covered this in its latest issue. Go figure. But Delahaye President Mark Weiner thought it was interesting enough to comment on, and his comment was inspiring enough that I thought it was worth reproducing here (with his permission):

First: The IPR’s position on AVEs is actually relatively moderate as compared to what this discussion suggests. Read the white paper (PDF file) written by Bruce Jeffries-Fox. While I believe that AVEs are an incomplete and inadequate measure most of the time, I’ve seen them correlate to sales when no other PR measure could. Even if they are not the preferred measure and even if I believe that AVEs should be highly qualifed in their use if they are used at all, I’d rather be partially right than totally in the dark. AVEs do provide some gauge to the amount of coverage (minutes/column inches) and the reach/prestige of the medium. Even an incomplete measure can be abused and I think this is what so many of us find offensive.

Second, the irony is that AVEs greatly undervalue PR’s unique role within the marketing mix. As the research provider who worked with P&G and helped to create PRevaluate, and after having done similar marketing mix analysis in dozens of categories for scores of companies over the years, we’ve discovered that PR consistantly delivers the best ROI of any marketing agent. On average, mass marketing advertising delivers about $1.25 on a dollar; price promotions only $.75 on the dollar and PR between $3.00 and $8.00 on the dollar. The trouble is that most companies don’t use marketing mix modeling, and even those who do prefer to track only those marketing elements on which they spend the most money (TV and promotions) rather on those elements which deliver the best ROI (PR). When viewed within the context of the complete marketing mix, PR is the only marketing option that provides a lift to all other forms of marketing (meaning that when the PR is good, the advertising is more effective, the direct marketing more efficient, etc). It’s what every PR person hopes is true, and maybe in their gut believes is true…now the truth is being revealed time and time again.

The question to ask is not “what will marketers do with this information,” but rather “what will the PR profession do with this information?” Will this be another lost opportunity for PR or will the leaders of our profession and the professional associations which represent us break free from conventional wisdom? Will they take the lead in promoting PR not because it “generates buzz” or “delivers a high equivelant ad value” but because PR delivers on meaningful business objectives? The story of P&G, Wachovia and Miller Brewing broke in the advertising and marketing trades rather than the PR trades. The evidence of PR’s unique power to drive businesses forward should be our call to action: Instead of squabbling among ourselves and finger-pointing, we should unite to promote PR simply because it works in meaningful and measurable ways.

In a previous post, Angie Jeffrey is understandably overwhelmed by measurement options. She is right when she says we have to do some serious thinking to determine what our goals are. And if we do, we’ll discover that our goals are aligned with, or the same as, our organization’s goals. And that is almost always related in some way to bringing in revenue, adding value or increasing profitability. In other words, money.

We have been using soft measures, like awareness, too long, according to the Association of National Advertisers. We either need to be contributing to short-term cash flows or long-term shareholder value, and we need to measure our return on investment (ROI).

As I mention in an article in the measurement issue of CW Online, when you know ROI of your marketing efforts, you also have access to data that will help you understand a great deal more. You can:

Provide a solid rationale for upcoming budgets.
Compare actual budgets to costs-to-date.
Compare ROI of each component of your marketing communications mix to see what works best.
Make adjustments to your existing program to get the greatest impact for your communications dollar.

In short, you can manage your budget as the investment it really is, and you can achieve more than justification of your marketing efforts–you can increase the return on your marketing investment.

This requires a certain amount of courage, as Ryan Williams points out in a previous post. When we determine ROI, we’ll expose the components of our marketing mix that are not producing as well as others. But only then will we know what we need to change. And only then can we improve.

I am a survey vendor and a consultant. Measurement is my gig. I see all the pros of doing good research. Codifying data, organizing it, making information into knowledge and applying it to my projects is what I was taught when I started my career. If I started in a corporation would I feel the same way? Done poorly measurement can be risky.

Is measurement too risky in today’s competitive environment? If I survey and the results are negative what can I do? I may embarrass my boss or be on the hook for the outcome.

So why don’t we measure more? Is it budget, competencies, time or the risk of accountability?

Do we need to be courageous to measure?

First, hello to all! I confess to being a blogging newbie, so have been avidly reading your posts and comments in an effort to get into the swing. Good questions and comments to date.

Second, I’ve just got to share my new view of PR’s measurement challenge since spending what felt like months reviewing white papers, speeches, articles and the web in preparation for an upcoming measurement speech at Bulldog’s Media Relations 2006. Bulldog wanted an industry scan of the very latest and greatest tools and techniques, so I ended up (exhausted!) with a seven-page spreadsheet of options.

Here’s the thing: we now have SO much information, SO many tools, SO many vendors and SO many approaches, that I am at a loss to understand why anyone is NOT measuring today. From web-based surveys to website tracking/analysis services; from sponsorship research to loyalty and brand-equity services; from CGM media analysis to traditional monitoring; and from 24/7 measurement platforms to cheap DIY tools … there are answers out there for just about any situation — including many FREE offerings (particularly for e-surveys and website measurement).

I’ve concluded that the biggest callenge facing us (besides getting through the long lists of options!) is thinking through the mixing and matching of output, outgrowth and outcome measures so that you end up with a truly integrated or linked set of results. Is this a left-brain or right-brain function? Test yourself sometime over a glass of wine, with a few different types of objectives … and see what you come up with. I found one glass of wine wasn’t enough …

I hate to agree with a heretic, as Shel Holtz refers to John Wagner, but John is right about one thing. Big brand name companies are not generating meaningful metrics, at least not when it comes to B2B integrated marketing communications. I’m continually stunned by this, but it’s true. Even the really big companies that profess to be all over metrics aren’t doing it.

Measurement guru Pat LaPointe says it best: “Most marketing organizations spend far too much time and precious resources answering questions that don’t generate any significant insights into the business.” Why is that? Well, there are a jillion reasons, not the least of which is defining what meaningful metrics are.

But we can agree that ROI is a pretty good number, right? In fact, for many CEOs, it’s the only number they care about. (When it comes to marketing, they should care about more than that, but that’s another blog.)

Yet here’s some sobering stuff. Forrester Research conducted a study of marketers, 66.5% of whom said measuring marketing ROI is important or very important, yet 59.5% reported being dissatisfied with their company’s ability to measure marketing ROI. And 51.1% said they were dissatisfied with their company’s ability to agree on a definition of marketing ROI. Yikes! No wonder we can’t measure it if we don’t know what it is! (Hint: It’s not counting click-throughs to your website.)

There’s no silver bullet, but we can achieve ROI accountability for the most part. What we can’t do is continue on as we have, inspiring comments like this in a recent Wall Street Journal article (by John Quelch, October 12, 2005, European edition):

Many marketing managers are failing their employers. They are often creative right-brain thinkers who can dream up campaigns to drive top-line sales, but they show little interest in the balance sheet impact of their promotional programs. Such marketers lack the quantitiative, analytical skills necessary to drive marketing productivity…

Anybody have a boss who doesn’t read the Wall Street Journal?

I measure for three reasons:

1. Evaluate what we have done.
2. Inform our plans and implementation.
3. Involve our audience in the decision making.

Evaluation much of the time is focused on our immediate need. Our bosses expect us to demonstrate the value we provide. We count our readership, web counts or media coverage, etc. We conduct survey and focus groups to test the awareness, understanding and support for our messaging. What our bosses would prefer is a clear indicator that we improved business outcomes. This is necessary, but it can distract us from the value we receive from our measurement practices.

Gathering information to inform our decisions is the second reason most communicators conduct research. Our audience, other organizations’ best practices, and our professional colleagues can offer new approaches as to how we will deliver our programs. This data helps us set priorities, goals and understand our constraints.

The third reason communicators conduct research is to involve the audience in decisions making. Corporate polling and organization-wide surveys are examples that can be used to leverage participatory decision-making. What, how and who you ask questions is a powerful form of communicating. As a method of culture change and trust building we have achieved great success focusing on how we involved our audience.

I am excited about the potential for audience involvement. New technologies have offered new possibilities. We now use web surveys, forums and blogs to see how our audience reacts. What innovative ways have you involved your audience?

I don’t know who said “data without context is trivia” (and I just Googled it and came up empty), but I think that phrase lies at the heart of the PR industry’s hesitation to invest in measurement. There was a minor firestorm recently ignited by a post in Houston PR consultant John Wagner’s blog saying that he thinks much of today’s measurement is meaningless and that “intuition” is an equally valid approach to assessing whether or not a PR campaign is successful. Katie Paine fired back, calling John a dinosaur and a “measurement menace,” and Shel Holtz got his licks in as well (earning “measurement maven” status from Katie).

The problem is that we sometimes view measurement in a vacuum as just a lot of statistics (oh, no, math…) that are an afterthought to a campaign. It becomes just a bunch of data without context, whether it’s ad values (boo, hiss!) or eyeballs reached or cost per impression. Those output numbers only take on meaning and move beyond trivia status when we put them in the context of objectives established at the outset that articulate what we are hoping to achieve — the classic question, “what do we want the audience to understand, believe or do as a result of our communications?” Then we can see how the visibility we generated contributed to the final outcomes, shaping knowledge, opinions and behavior. I once thought that it was only important to measure the final outcomes, but I have come to believe we need to measure both visibility and outcomes in order to demonstrate the value we contribute to the equation.