The need to measure return on investment (ROI) has long since been seared into the minds of communications professionals, from the days of mere clip counting to the emergence of more modern approaches (think marketing mix modeling, for one). But, as the need for accountability across the corporation continues to mature - and as the line between PR, communications and marketing professionals blurs - meeting the new standards is an ongoing challenge. The following factors up the ante even more: An ongoing need to justify communications, marketing and PR budgets A fragmented marketplace Difficulty with allocating resources Growing pressure from managers and shareholders Challenge in defining ROI and establishing the best metrics Plus, according to a study conducted at the end of 2005 by Marketing Management Analytics (MMA), Association of National Advertisers (ANA) and Forrester Research, marketers (and, based on their merging responsibilities, communications and PR professionals) recognize the difficulty in delivering key measures of accountability, with 79 percent of surveyed respondents viewing the measurement of marketing and communication's impact on sales as "important" or "somewhat important." That said, only 23 percent agreed that their senior management is confident in the forecasts they offer. (Results were based on the responses of 143 surveyed U.S. marketers.) So what is the missing link? For some, it may lay in the manifestation of dashboards - that is, computer models that can process data and inform decisions accordingly. "CEOs started demanding dashboards - or, the ability to boil down large amounts of data - almost ten years ago from sales, marketing - everyone in the organization," says Katie Paine, CEO of measurement firm KDPaine & Partners (Durham, NH), who designed and implemented the Do-It-Yourself (DIY) Dashboard for communications and PR practitioners looking to measure any outcome. "So today, while dashboards aren't necessarily growing in popularity, data-driven PR practices are." Paine's nod to the increase in data-driven practices - and, thus, the adoption of measurement dashboards - is reiterated by a growing number of CEOs who tout metrics as a necessary ingredient in the overall business mix. Case in point: Hewlett-Packard's CEO, Mark Hurd, was characterized in 2005 by chairman of the board Patricia Dunn as "very much a fan of metrics" during a news conference. So, if measurement metrics are as essential to business success as ever, where do dashboards come into play? At the 2006 ANA Accountability Forum in July, the subject was discussed in great detail. The 2006 MMA Marketing Accountability Study results were presented there, for one, and they showed that of all surveyed individuals (101 senior-level marketers), 30 percent are "capable and confident" in marketing dashboards as a measurement metric. That said, Kim Johnston, VP of marketing operations for Symantec Corporation, acknowledged in her Accountability Forum presentation that her once-outdated marketing dashboard has evolved and been customized to meet company needs - identifying trends, tying to corporate objectives, combining measurement of lead generation and corporate direction - and provide key deliverables (an alignment map, for example) and richer sets of metrics. The key variable in that equation: customized. According to Jon Low, managing director of Communications Consulting Worldwide and partner with performance measurement firm Predictiv, "The good news with measurement dashboards is that they provide comparability. The bad news: They are not as company-specific or situation-specific as an individual management tool might be. There are trade-offs." However, dashboards are evolving with needs for customization in mind. The DIY Dashboard, for example, allows communications executives to identify the metrics that are most meaningful to their organizations. Because Paine's dashboard allows the executives themselves to input data once the framework is up and running, they can choose to measure only what they need. But there is another challenge at the most basic level that complicates these measurement dashboards' potential: acquiring the data in the first place. Most dashboard vendors say that, in most cases, companies already own the data required; it is just a matter of accessing it. But that is often easier said than done. "The majority of the necessary data is sitting in someone's file cabinet," Paine says. "Everyone is sitting on it and no one wants to share it, especially when PR is asking for it." Low seconds this notion, saying, "Different units within the company control different pieces of data, and they aren't always willing to share it. People believe that information is power. It's driven by fear, not malice." Organizations like Predictiv, then, establish the methodology and help gather the data used to popular dashboards. The data can be based on whatever value driver the company defines as meaningful (see sidebar on intangible drivers). The growing need for accountability among communications, marketing and PR professionals, combined with the enhanced ability to track metrics and value drivers, points to a promising future for measurement dashboards. The increasing ability for customization continues to make them more relevant, and the integration of once-siloed units within organizations is fostering a culture more conductive to sharing data. And the best news of all? "No one questions the need to measure anymore," Low says. "Now it's just a matter of getting a handle on what to measure." Contacts: Katie Paine, 603.868.1550, email@example.com; Jon Low, 561.832.3352, firstname.lastname@example.org Measuring Intangibles When measuring value drivers to enhance the organization's overall performance, communications professionals in the past were often tied to media relations elements - clip counts and advertising equivalencies, for example. However, it is the intangible drivers that can align the communications function to organizational goals and enhance bottom- line results. Performance measurement unit Predictiv co-founders Jonathan Low and Pam Cohen authored a book suggesting that up to one-third of organizational value comes from elements that aren't visible on a profit-and-loss statement. The book - Invisible Advantage: How Intangibles Are Driving Business Performance (Perseus Books Group, 2002) - identifies twelve quantifiable factors that "are the new currency of the economy:" Leadership Strategy Execution Communication and Transparency Brand Equity Reputation Networks and Alliances Technology and Processes Human Capital Workplace Organization and Culture Innovation Intellectual Capital Adaptability By using complex mathematical frameworks to quantify the impact of these intangibles on bottom-line business results, communications professional can now prove value to the C- suite in a language its executives understand: numbers.
Measurement Dashboards: The Panacea For Accountability Needs?
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