Demonstrating the value of communications
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This document discusses how to measure and report on the value of communications. It begins by reviewing academic research that shows a positive relationship between company reputation and financial performance. It then presents frameworks for evaluating communications outputs and outcomes, and discusses various key performance indicators (KPIs) that can be used, such as changes in awareness, favorability, and propensity to recommend. The document also covers methods for attributing a financial value to communications activities, such as return on investment (ROI) calculations. It emphasizes the importance of justifying communications expenditures and outlines best practices for reporting performance to internal stakeholders.
![Copyright Redleaf Communications 2016
Putting it all together
ROI = Attributable Revenue – Attributable Cost
Attributable Cost
Attributable Revenue = Either Marketing Mix estimate or Attribution estimate
• Marketing mix estimated revenue – use statistical analysis
• Attribution estimated revenue = Converted leads from Directly trackable +
Anecdotal + Form capture + Discount code + Domain names [+ (∆
Propensity to Buy x Potential purchasers)]
Attributable Cost = Human Costs + Programme Costs](https://image.slidesharecdn.com/demonstratingthevalueofcommunications-160823154409/85/Demonstrating-the-value-of-communications-22-320.jpg)
Demonstrating the value of communications
- 1. Copyright Redleaf Communications 2016
- 2. Copyright Redleaf Communications 2016 1. The value of reputation 2. How to measure the value of communications 3. How to report the value of communications
- 3. Copyright Redleaf Communications 2016 The value of Reputation
- 4. Copyright Redleaf Communications 2016 Three dimensions of reputation Known Known for something Positive/ negative
- 5. Copyright Redleaf Communications 2016 Return on Assets: Positive relationship between company reputation and return on assets Deephouse (2000), Roberts & Dowling (2002) Profitability: Good reputation US firms were able to sustain above industry average profits over time Roberts and Dowling (2002) Stock market: Stronger reputations = greater stock price rewards Pfarrer, Pollock and Rindova (2010) Recruitment: Employers with better reputations attracted more, better quality applicants Turban and Cable (2003) Strategy Execution: Higher financial reputations meant that companies could deviate from normal strategic behaviour and maintain their reputations Deephouse and Carter (2005) Academic Research and Evidence
- 6. Copyright Redleaf Communications 2016 Research: Major drivers of reputation Performance • Financial Performance • Firm size • Social (and CSR) Performance Status • Institutional ownership • Brand • High status affiliations Activities • Frequency of market actions • Complexity of firm’s actions Culture • Employee Development • Organisational culture
- 7. Copyright Redleaf Communications 2016 Represents going concern value, perceived future income and economic benefits. i.e. reputation Goodwill: Measured as difference between market value and tangible assets
- 8. Copyright Redleaf Communications 2016 Measuring communications
- 9. Copyright Redleaf Communications 2016 Evaluation framework Audit Where are we now? Setting objectives Where do we want to be Strategy and Plan. How do we get there? Ongoing measurement Are we getting there? Results and Evaluation How did we do?
- 10. Copyright Redleaf Communications 2016 AVE now discredited Advertising Value Equivalents (AVE): Measure the cost of media space, not used to value public relations Now discredited Doesn’t reflect negatives/ neutral Can be poorly positioned/ presented Features competitors Rates used are inflated Doesn’t measure content value
- 11. Copyright Redleaf Communications 2016 The Importance of demonstrating ROI • Shows demonstrable economic value • Understood by finance departments • Critical for justifying communications expenditure (and existence)
- 12. Copyright Redleaf Communications 2016 AMEC Barcelona Methodology Outputs Business Objectives Outcomes • Campaign ROI • Business KPIs (sales calls etc.) • Marketing KPIs (emails captured etc.) • Lobbying/ regulatory outcomes • Press coverage • Social interactions • Brand awareness, consideration, credibility • Net Promoter Score • Content distributed (press releases, articles, social media) • Stakeholder engagement Overall Evaluation Key Performance Indicators Driver Social Media analytics Core audience surveys Print, broadcast, digital coverage analytics Internal business Inputs: Sales calls, web traffic, direct response Others: Focus groups, Google PageRank Inputs
- 13. Copyright Redleaf Communications 2016 Output Sources: • Internal logs • Stakeholder CRM • System reports Conventional Media •Press releases •Stakeholder meetings/ contact •Press articles •Reactive comments •Feature contributions Content •Articles written •Blogs written •White papers created •Infographics created •Thought Leadership Social/ Digital Media •Tweets •LinkedIn Updates •Facebook posts •Email campaigns Effectiveness: • Readability tests • Pre-testing
- 14. Copyright Redleaf Communications 2016 Outcomes – Empirical KPIs Sources: • Media: Press monitoring and evaluation • Content: Google analytics/ CRM (Hubspot) analytics • Social: social systems or proprietary systems Conventional Media •Press influence •Positioning •Spokesperson citations •Coverage sentiment •Share of voice •OTS/ Reach •Key message penetration •Clean links/ contact numbers achieved •Traffic to website Content •Engagement rates •Interactions •Traffic to website •Qualitative analysis Social/ Digital Media •Page impressions •Engagement •∆ in followers •Emails opened •Response rate •Traffic to website
- 15. Copyright Redleaf Communications 2016 Outcome: Impact on Target Audiences Awareness Favourability Propensity to Recommend Key Message Recall Propensity to Buy Measure using audience survey prior to starting, then every 6/ 12 months Sample n=>30 (384 for UK population @95% CI) Survey intermediary (e.g. journalist) and final audiences Can be survey, interview or focus group. Can also measure media consumption preferences
- 16. Copyright Redleaf Communications 2016 Mechanism for measuring performance Leading indicator of customer engagement • Promoters score 9-10 • Neutral score 7-8 • Detractors score 0-6 Outcomes: Net Promoter Score (NPS)
- 17. Copyright Redleaf Communications 2016 • Direct Sales • Sales Leads • Information into CRM • Regulatory or Political Outcomes Business Objectives
- 18. Copyright Redleaf Communications 2016 Marketing mix v attribution Marketing Mix • Top down, aggregated • Econometrics based • Calculated over weeks • No visibility of independent interactions • Best for branding Attribution • Granular, account specific • Data scientist based • Instant • Shows role of independent interactions • Best for measuring customer journey v
- 19. Copyright Redleaf Communications 2016 How marketing mix measurement works Ordinary least squares regression analysis Can be used to chart correlation (R2) between PR activity and sales Needs large enough sample sizes (n=>30) Can run it in excel
- 20. Copyright Redleaf Communications 2016 Attribution analysis Trackable digital/ clean links Anecdotal Discount codes Custom domain names Form capture (but rotate)
- 21. Copyright Redleaf Communications 2016 Human Cost: • Comms team HR costs (use 2.5x actual salary) • Time invested in activities • Other department input/ sign off Programme Cost: • Systems (e.g. distribution, monitoring) • Materials (photos, press packs) • External agency costs • Licence costs (photos, IP) Deriving the attributable cost
- 22. Copyright Redleaf Communications 2016 Putting it all together ROI = Attributable Revenue – Attributable Cost Attributable Cost Attributable Revenue = Either Marketing Mix estimate or Attribution estimate • Marketing mix estimated revenue – use statistical analysis • Attribution estimated revenue = Converted leads from Directly trackable + Anecdotal + Form capture + Discount code + Domain names [+ (∆ Propensity to Buy x Potential purchasers)] Attributable Cost = Human Costs + Programme Costs
- 23. Copyright Redleaf Communications 2016 • KPIs • Reports • Governance Reporting
- 24. Copyright Redleaf Communications 2016 Specific Measurable Achievable Relevant Time- Bound Fixing KPIs to measure against
- 25. Copyright Redleaf Communications 2016 Outputs 104 press releases to be issued in 2016 (56 local, 48 other) 60 press meetings to be hosted in 2016 (and 12 for CEO) 10 placed articles a month in 2016 A 30% increase in comments issued compared to 2015 (equating to 360 per year) A 20% increase in Twitter and LinkedIn posts compared to 2015 Outcomes •A 30% increase in favourable coverage in national, personal finance and trade media •A 20% increase in share of voice in target media •A 20% increase in favourable sentiment amongst journalists (NPS measure in annual media audit) •A 20% increase in favourable sentiment towards company amongst clients (measured in survey annually) •A 20% increase in favourable sentiment towards company amongst IFAs (measured in survey annually) •A 20% increase in LinkedIn and Twitter followers (by Dec 2016) •A 20% increase in Tweet impressions (annually) •A 1% increase in Tweet engagements Business Objectives A 10% increase in net retail sales A 10% increase in net intermediary sales Example KPIs (asset manager)
- 26. Copyright Redleaf Communications 2016 • Coverage/ results (daily) • Activity reports (weekly) • KPI Performance (monthly) • Strategic reviews (quarterly) Types of reporting & frequency + don’t forget to promote via internal communications…
- 27. Copyright Redleaf Communications 2016 Communications Dashboard
- 28. Copyright Redleaf Communications 2016 Communications Balanced Scorecard
- 29. Copyright Redleaf Communications 2016 Reporting performance to Committees Statutory • Board of Directors • ExCo • ExCo • ExCo • ExCo • Board of Directors • Board of Directors • ExCo Corporate Level • Global Comms Committee • Global Thought Leadership Committee • Global Content Committee • Global Comms Committee • Global Content Committee • Global Comms Committee • Internal Comms Committee • Global Comms Committee • Global Public Policy Committee • Global Comms Committee • Corporate Marketing and Brand Committee • Global Marketing Sourcing • Global Comms Committee • Global CSR committee • Global Comms Committee • Global IR Committee Local Level • Local Comms Committee • Local Content Committee • Local Comms Committee • Local Content Committee • Local Comms Committee • Local Comms Committee • Local Comms Committee • Local Content Committee • Local Mktng Committee • Local Comms Committee • Local Content Committee Corporate Communication Media Relations Internal Communication Public Policy Corporate Marketing and Brand Corporate Social Responsibility Investor relations
- 30. Copyright Redleaf Communications 2016 Line reporting of communications performance Corporate Affairs Corporate Communication Crisis/ issues management CEO positioning Thought Leadership Media Relations Social/Digital Content Internal Communication Employee Engagement Change Management Conduct Management Public Policy Regulatory engagement Corporate Marketing and Brand Social/ Digital Sponsorship Events Corporate Social Responsibility Environment Community Suppliers Investor relations Retail Shareholder engagement Institutional Engagement Policies & Global Control Board/ExCo Corporate Comms Committee Local Comms Committee
- 31. Copyright Redleaf Communications 2016 In conclusion • Communications functions increasingly have to justify their existence • Technology advances enable greater tracking and attribution – making it easier to demonstrate ROI • Comms professionals now have many tools and techniques to demonstrate value of PR • Strong reporting/ governance essential to demonstrate value to decision makers
- 32. Copyright Redleaf Communications 2016 Autumn Seminars 0830-1000 hrs breakfast briefings How to manage your agency 20 Sep 2016