"The greatest problem with communication," George Bernard Shaw once wrote, "is the illusion that it has been accomplished."
The reference may be an anachronism as far as literature goes, but it's still right on target when applied to the PR profession. Unlike sales or advertising, communications is
an intangible asset; when it's done right, as late Supreme Court Justice Potter Stewart said, "I'll know it when I see it" - and that's the best definition out there.
As a result, many corporate PR execs have to battle the rest of the C-suite to prove their worth and get a bigger bankroll; some have been relegated to the proverbial kiddy
table or, even worse, lost their positions when their department was rolled into another corporate function. Then, on the opposite end of the spectrum, the news that PR does
deliver results has reached the likes of Proctor & Gamble and Wachovia; the two corporations recently announced that more funding will be funneled into their PR
functions.
Such is the current dichotomous backdrop to the measurement beast that, until recently, has been based solely on counting and analyzing data such as advertising equivalencies
and press clips. So, as more and more C-suite members acknowledge the growing impact of intangibles (media relations, corporate brand, internal communications, etc.) on business
value, how do you measure something you (in theory) can't count?
The answer, according to Paul Argenti, professor of corporate communication at Dartmouth's Tuck School of Business: You count it anyway.
In conjunction with Fleishman-Hillard and Predictiv, the Argenti-led team of measurement specialists spawned Communications Consulting Worldwide (CCW) and,
in turn, a unique tool that measures intangible drivers and links them to a quantitative (read: real numbers) corporate performance score. The key to CCW's work is that they are
tying corporate communication results (which is to say "an enhanced corporate reputation") to revenue. The model shows the relationship between changes in corporate value drivers
and business outcomes; thus, the missing link in the evolution of measurement. The tool, dubbed the Communications CoPilot, is based on a multivariate statistical approach,
econometric modeling and causal equations (here we begin to understand why business people make the best PR managers).
This is a dream come true for every senior PR manager who, while trying to sell the CEO on the value of PR, has been asked for hard numbers.
"Without data on the effectiveness of their activities, communications professionals cannot gain the credibility they desire from senior management," Argenti says. "To date,
measurement tools have failed to evolve to the point where they can accurately reflect the value of communications." Until now.
The Communications CoPilot is in the early stages of testing with major corporate clients (who have not yet gone public with their participation), and CCW is in talks with a
number of other PR heavyweights whose palates have been whet with the idea of justifying budgets and developing communications strategies through hard numbers. The approach can
be used to link any intangible to business value and provide a benchmark against which to measure progress, offering practitioners the ability to predict future outcomes in the
same way that statistical analyses allow sports teams to anticipate a baseball players' next-season stats (Moneyball by Michael Lewis details this approach).
While this measurement tool seems to have been born out of a Darwinist need - a survival of the fittest PR practitioners in the corporate machine - Argenti underscores its
ability to provide better business outcomes for the entire corporation. In his white paper "Measuring the Value of Communications," he writes: "When communications professionals
are at the table, they are able to expand their understanding of the company's overall business objectives and identify better ways to move their organizations closer to these
goals through communications activities. In fact, the more corporate communication becomes intertwined with and able to support corporate strategy, the more valuable it becomes,
and measurement results will reflect this value."
Measurement is essential for corporations of any sort, but its process becomes especially complex when, like FedEx (which is not a client of CCW), the company's product
is as intangible as the drivers it strives to measure.
"When you don't have a tangible product, you're really selling reputation," says Lourdes Pena, senior communications specialist at FedEx. "We look [at measurement] from a
business perspective, because the C-suite likes numbers."
Argenti also provides a case study to highlight the success of the technique. CCW consulted with Company T (which has chosen not to publicize the information yet) on media
relations data provided by Delahaye. After statistically grouping together data categories and eliminating incomplete data, the Communications CoPilot calculated the
impact that individual communications activities had on the company's selected business outcome.
The result: CCW found that media relations alone contributes over $300 million in annual revenue. It also found that for each one-point increase in Company T's average score,
it could increase annual revenue by approximately $13 million. That's a significant chunk of change to bring to the CEO at the end of the day.
So if CCW's proprietary measurement tool could be useful to Company T or the likes of FedEx, why has there been so much apprehension? Cost is one red flag, as the service
would tap into communication departments' already lacking budget.
"Generally, there are three ways by which PR can contribute a return-on-investment: by helping to avoid catastrophic costs; by doing more with less; and by driving sales,"
says Mark Weiner, president of Delahaye. "So while studies of this magnitude require an investment, given the outcome corporations should not be asking "how much?" but rather
"how do I get started?" The biggest challenges are, first, to gather the great amounts of data which are usually required for analyses of this scope; and second, the willingness
among departments within the organization to collaborate, even towards something as important as this. Funding should not be the impediment."
Contacts: Paul Argenti, 603.646.2983, [email protected]; Lourdes Pena, 901.454.7221, [email protected]; Mark Weiner, 203.663.2446, [email protected].