The Value of PR Measurement – Part 1

I intend this to be the first of a series of posts about the challenge of PR Measurement.

The transparency of the Online Media World has brought with it greater opportunities to observe and measure the impact of PR, and often at a much lower cost than the equivalent offline measurement.

At Measurement Camp last week (which was great by the way, just wish it wasn’t a 600 mile round trip!) I was struck by the fact that though there was some *very* good work presented there were no pound notes in any of the resulting measures.

In my experience (and for those real experts out there please correct me if I am wrong!) PR measurement often seems to focus on the following four areas: activities, qualification, indicators and actions.

Measure

Examples

Description

Activity

Relevant coverage on publications, tweets about your announcement/brand, YouTube views, downloads.

Indicate that PR activity has made an impact.

Qualification

Twitter followers, readership of publication, authority of blog, Page Rank. These can then be further distilled into overall measures.

Assess potential influence of these activities.

Indicator

Referrals to your website from a particular piece of coverage or Twitter activity; increased positive sentiment compared to the position prior to the PR campaign; relative impact compared to other campaigns.

Indicate the likelihood that the activities measured will result in a desired response of some kind either now or in the future

Action

Lead generation, sign ups, attendance at an event, sales.

Actual desired responses that resulted.

These are all important and useful measures of performance and they allow us to build models to further refine our evaluation, but the one thing they still don’t “measure” (or perhaps quantify is a better word?) is Value.

Value needs to be stated in pounds – or dollars, euros etc depending on your country of origin :-)  It is only in doing this that actual return on investment can be calculated and PR’s true worth to an organisation estimated.

Actions should in theory be relatively straightforward to value. Take the simple example of lead generation. If a campaign has resulted in X number of leads the client should (hopefully – tracking depending) be able to supply the PR professional (agency or inhouse) with relevant information about resulting conversion rates and sales values as well as the cost of generating equivalent sales from other means.

This would allow the PR professional to calculate both the sales return on investment generated as well as the relative cost of generating sales from this type of activity.

More sophisticated measurement can also use data from some of the first three sources to help to correlate the observed activities and indicators with resulting actions when the linkage is not as direct as say a website referral.

But what about the situation where the desired response is less tangible and is more about improving relationships and reputation rather than something as direct as lead generation? The first three measures can be used to assist with this but are harder to give a monetary value to.

People try/have tried to value these Activity based measures e.g. Advertising Value Equivalent (AVE), but such valuations aren’t measuring the value that the PR has created for the organisation, rather they are trying to measure the value of the activities that have occurred. These two things are not the same. Also the way that online advertising and publishing works makes any online AVE calculation even more spurious IMHO.

I think some of the answers to valuing these “softer” areas may lie in the world of accountancy and this will be the subject of my next post.

PRWeek Top 150 2009 Podcast

PRWeek were kind enough to invite me to do this week’s podcast on the newly announced Top 150 2009. Not sure if Wadds previous kind words influenced this and a big thanks to Peter Hay and Cathy Wallace who trusted me with the figures pre publication so I could do my analysis. Fortunately I managed to avoid doing a Blears/Quick at PRDebate on Tuesday :-)

Podcast can be found here and the Top 150 2009 can be downloaded by subscribers here.

I will be publishing my analysis behind some of my comments in the next couple of days for anyone who is interested in more detail.

Update: Embed code now available so view podcast below.

Top 5 Dos and Top 5 Don’ts of Online PR?

I tried to pull together a short list of dos and don’ts of Online PR this week for a newsletter I was writing and throught I would share them here as well. It was aimed at an SME audience but I think the messages are relevant in general as well. I am expecting that people will have different views on what should make the top five in each case, so lets see these as starters for ten! :-)

Top 5 Online PR things you should do  

– listen
– be authentic
– give
– respond
– stay in the conversation

Top 5 Online PR things you shouldn’t do  

- forget online visibility
– spam
– be irrelevant
– treat as a channel
– ignore

Dos  

Listen

If you do nothing else you should do this. The online media world offers a fantastic opportunity to listen to what people think about your industry, your business and your competition. Using the various sites and tools that are available will give you a wealth of information that would cost huge amounts in market research fees to have discovered in the “real” world.

This information will help you to understand the communities and influencers who are relevant to you and what topics they are interested in.

Be authentic  

Just because you are in an online environment don’t forget that this world is still made up of people not computers. People like authenticity. They like people who are genuine about themselves and in an online PR context this means being transparent about who you are and why you are approaching or engaging with a particular person or community.

If you start a blog where you will be covering topics that are sometimes self promotional in nature then be clear about this with your readers. If you comment on a blog post where you have a professional axe to grind ensure your potential bias is clear to the blogger and their community (unless you are confident they know you so well as to not need such clarity).

Give  

Like your Mum and Dad probably taught you “it is better to give than to receive” and online this is still the case. Don’t go into a relationship with an individual or community online with an agenda or an expectation of something. Would you respond well to such an approach? Try and understand their needs and then give them something of value. This could still be of a commercial nature e.g. a travel business might provide details of special offers before these were given to the general public, but more often it will be less direct – some relevant guidance perhaps.

These no strings “gifts” will help to build the relationship and then hopefully that other well used phrase about giving will occur – “what goes around, comes around”.

Respond  

Having listened to what people are saying online and possibly given something of value it is important to respond to their questions or concerns. Again, as in life in the “real” world, most people would think it rude if someone ignored or blanked them, particularly if they actually instigated the conversation.

This is potentially a challenge for organisations with large communities who want to talk to or about them. This is when you need to have a clear structure within the organisation as to who is going to field what questions and enter what conversations. For instance in may be appropriate for queries of a more customer service nature – “I have a problem with X” – to be responded to by someone from your customer service department rather than a PR or marketing person. Or at least direct them towards this more appropriate channel.

Stay in the conversation

Having responded and established a dialogue with communities don’t stop talking. This is a mistake a lot of people can make online. You do great work listening and understanding who is interested in similar things to you and your business, you engage them potentially through giving something of value and then respond to their initial interest.

Then you stop. You disappear from the online world. People visit your twitter feed but you have stopped tweeting. Their RSS reader never shows a new post from your blog. Where have you gone they wonder? At best they accept your sudden lack of interest and move on. At worst they feel slighted by your lack of investment in sustaining the relationship and make their feelings known!

Don’ts  

Forget visibility

The “dark side” so to speak of the transparency and durability of the online media world is that everything, and I mean everything, you say can end up online. It has become very common now for people to Tweet live while listening to a presentation for instance. You may not have considered the risk that what you said to that particular room could end up being relayed to 1.5bn internet users if they choose to find it, but it can.

Clearly the content you actually do produce and upload yourself, comments you make on blogs and tweets that you update will definitely be there for all to see. Don’t make the same mistake as these people and forget that online everyone is listening.

Spam

A fundamental temptation of the Internet is the ability to send a message to a huge list of recipients at the click of a button. In the days when “snail mail” or faxes were the only options the cost of paper, envelopes, stamps, phone calls and ink, never mind the time to produce them, meant that there was a price to be paid for spamming people.

With emails the price is paid by the recipient in the lost time through checking, and almost certainly deleting emails they didn’t want. Think carefully before pressing send – “have I earned the right to send this person an email?” At RealWire we take this very seriously and spend a lot of time researching and contacting sites to try and ensure we don’t fall foul of this. As we are human, we slip up occasionally, be we strive to improve all of the time as we know that permission is a fundamental part of any PR strategy.

Be irrelevant

This is very closely linked to spam. Effectively I will very quickly lose any permission I may enjoy to send people messages if I send them irrelevant content. A key reason for choosing “Top 5s” for these articles was the response to my previous newsletter which suggested that articles of this nature were more relevant to you the reader. Well I try and practice what I preach hence my response this month or I risk those readers who found the previous Top 5 article interesting choosing to “mute” me.

At RealWire we say that it is only through delivering relevance you can ever hope to achieve influence. Clearly the corollary will mean you achieve nothing.

Treat as a “channel”

I sometimes hear people talking about online as a “channel” i.e. print, broadcast and online channels. I understand why it is thought of in this way but for me this misses a fundamental point about the online media. The reason I refer to it as “the Online Media World” is because that is what it is – a virtual equivalent of the real world.

People are publishing, like they do in newspapers, on websites, or broadcasting on sites such as You Tube or even BBC’s IPlayer, but they are also giving opinions, sharing stories, commenting and generally talking about things that interest them. Just like we do in the real world. Because the online world is populated by people as well just connected via telecommunications providers and ISPs. This means that everything you think about doing offline in PR terms you need to think about online.

Ignore

Last, but definitely not least, the one thing you must not do is ignore the online world. For two key commercial reasons.

Firstly because people will talk about you whether you engage or not and if you don’t engage you can’t tell your side of the story.

And second because at least some, if not all, of your competition will engage online and with 1.5bn people to talk to that could turn into a pretty hefty competitive advantage.

If Freakonomics covered the pitching issue

The provision of pitches by the PR Industry to the receivers of news would appear to suffer from a significant level of inefficiency in the allocation of resources. This is due to PR suppliers charging too high a price for a given level of demand. Over supply to the most in demand journalists leads to frustration for them, and a lack of productivity and efficiency on the part of the PRs, causing reduced profitability.

To improve this situation the industry needs to invest, either internally or via external suppliers, in ways of reducing the price and/or correctly segmenting the news market such that each pitch can achieve the maximum return for the time invested.

The Price of a pitch

Price in this equation is the Price a receiver of PR pitches pays per story they subsequently produce. Before I expand on this a bit of background. Andrew Smith posted last Friday on the topic of pitching and the frustration journalists experience with activities such as phone calls asking “did you receive my email”, the latest being Charles Arthur at the Guardian.

As well as being a chartered accountant I am also an economics graduate (sad I know) so I thought I would try to provide a Freakonomics like perspective on this issue – hence the equation. (By the way if anyone is as sad as me and wants some more detailed graphs etc relating to this analysis then please just let me know :-) )

Getting your story covered is an issue of supply and demand

Supply – the stories pitched by PRs.

Demand – the journalists, bloggers, editors, publishers and broadcasters need for interesting stories for their readers/audience to help fill column inches, web pages, airtime.

The receivers of news choose to write, talk about or publish- the story and therefore it is they who are making the “purchase”.

The Law of Supply and Demand

In a market supply and demand are brought into equilibrium by the price mechanism.

Suppliers want to supply more product as the price rises. Consumers demand more product as the price falls.

At the equilibrium price (PE), the equilibrium quantity (QE) is produced and consumed ensuring an efficient allocation of resources.

The “Price” of a story is a function of the time invested and interest level

From a receiver of news perspective i.e. editor, journalist etc I would suggest that the Price that the receiver of news is prepared to pay to “purchase” a story is the time I have to spend per story that I talk about or publish i.e. the equation at the start:

 

Investment of time includes the time it takes to review emails I receive, telephone calls made to me – chasing, pitch or otherwise – and meetings, interviews etc.

News market segmentation

The news market though is not a homogenous one. Not all receivers of pitches have the same level of demand.

(It is also worth noting that demand for PR pitches probably shifts on an almost minute by minute basis depending on the availability of other material for articles, blog posts etc but I think I should leave the concept of elasticity of demand and substitutes for another day!)

In demand journalist (Charles Arthur) scenario

The most in demand journalists are highly likely to be generating articles on their own without needing to rely on PR pitches as much for their material. Consequently their demand for pitches is low and consequently the price they are prepared to pay is low – see graph above.

The PR community on the other hand wants the most in demand journalists to talk about their pitches the most and so these journalists probably get sent the most emails, receive the most calls and yet will use the least stories because their demand is low. The effect being that the PR suppliers are expecting this market segment of consumers to consumer a high quantity of product at a high price.

The result – excess supply of pitches in this market segment.

Market implications

In reality there are multiple demand curves as there are many different types of receivers of news.

The best performing suppliers will either be the ones that are able to lower their prices across the board for all receivers and/or ones who segment the market such that they charge the right price and supply the right quantity in each.

For example a publisher of a niche market website publication who has limited in house resources to produce content may see pitches as a good source of material and therefore be prepared to pay a higher price.

Implications for the PR Industry

So how should PRs (and RealWire) seek to improve the situation for Charles and all the other receivers of releases?

Based on my formula above the Price can be reduced by

– Decreasing the investment required of the receiver
– Increasing the proportion of interesting stories they receive

Decrease investment:

To achieve this you need to do things like:

– Make sure they are as relevant as you can make them
– Ensure that the title tells the story effectively, reducing time to establish interest
– That they are in a format that makes receiving easy e.g. no attachments.
– Give them options for how to receive the pitch e.g. RSS

If you have taken the time to do these things well it is more likely that the recipient will invest the time at least reading the subject header of your email. It is then also a question of tracking usage to see if the recipients of your pitches cover any of your stories and trusting that if you have done these things well you don’t need to call everytime.

Effect? Reduced investment on the part of the recipient through reduced emails, less time to establish interest in the story and reduced phone calls.

Increase proportion of interesting stories:

This is clearly a trickier area as a lot is about message, creativity and having compelling stories to tell. I won’t get into what makes for a newsworthy story here as others could cover that far better than I.

However there are other ways of increasing the interest in your story such as using multimedia content – images, audio, video – including links to relevant websites for further information, and including background documents such as technical specifications.

Conclusion

The provision of pitches by the PR Industry to the receivers of news would appear to suffer from a significant level of inefficiency in the allocation of resources. This is due to PR suppliers charging too high a price for a given level of demand. Over supply to the most in demand journalists leads to frustration for them, and a lack of productivity and efficiency on the part of the PRs, causing reduced profitability.

To improve this situation the industry needs to invest, either internally or via external suppliers, in ways of reducing the price and/or correctly segmenting the news market such that each pitch can achieve the maximum return for the time invested.

A starter for 10

Well after much umming and aarhing I am finally writing my first blog post. I could list a batch of excuses as to why it has taken me until now to start a blog, but that seems like a glass is half empty approach to a first post. So instead I thought I’d start with what this blog is all about.

With a love of maths at school (I know what a geek!), a degree in economics and a chartered accountancy qualification it will come as no surprise that I love numbers. I have done for as long as I can remember. I love them not in a static one dimensional way, but because, like words, numbers can tell stories and paint pictures.

When I was trying to come up with a title for this blog I wanted something that had some personal element, related to numbers in some way and set the scene for the things I want to talk about. Oh and the domain had to be available too! I thought and thought without any luck. It was my incredible*** wife, Rebecca who came up with an inspired suggestion “Show me numbers”. The words come from one of my favourite TV shows, The West Wing. In the episode “Two Cathedrals” at the end of Season Two the President uses the phrase in a flashback when he is at school:

“If you want to convince me of something, show me numbers!”

The phrase highlights the (fictional – aah if only…) President’s desire for fact and measurement when making decisions rather than anecdote and opinion. This will be my aim with this blog. To try and provide analysis, quantification and evidence to base opinions on and I invite you to join the debate and provide your own evidence and show me, and the other one or two readers who may frequent this place, why apparent “fact” should be questioned.

***Just a selection of Rebecca’s many talents and qualities
– Natural leader and transformation change agent
– Fellow of the Association of Certfied Accountants.
– Creates amazing interior design schemes with a Distinction in her Interior Design degree.
– Fantastic sense of fun and humour engendering the same in our children.
– Blue sky innovative thinker with a stunning ability to spot opportunities.
– Calm in a crisis.
– Self taught in Revit CAD to professional standard.
– Inspires me to be a better man.
– Energetic and passionate in everything she does.
– Can quickly size up people and situations, identifying what’s most important
– Amazing at DIY and craftwork.
– Empowers the teams she leads.
– Makes the most amazing Christmas dinner.
– Capable of insightful financial analysis.
– Prince 2 Practitioner.
– Sings to an operatic standard and has a tone of voice you never tire of.
– Incredible eye for detail, can spot things no one else can see.
– Prodigious capacity to listen and be patient.
– Astute commercial judgement.
– The best friend anyone could ever have, would walk through fire for them.
– With an inner strength that can take your breath away.