(This article was excerpted from the upcoming book "Unleashing the Power of Public Relations: The Contrarian's Guide to Marketing and Communication" by Mark Weiner,
president of Delahaye. The book will be published in June by Jossey-Bass. This excerpt highlights the PR-to-sales connection through a Procter & Gamble case study.)
With seventeen brands with sales over $1 billion apiece, overall sales exceeding $57 billion, and an advertising expenditure of almost $6 billion annually, Procter &
Gamble is widely recognized as one of the world's greatest marketing organizations. Given the extent of the company's significant global marketing investment, marketers are
tasked with generating the optimal return, preferably in terms that clearly demonstrate a direct and meaningful contribution to sales. In common with those at other companies,
P&G's marketers face complex challenges:
- How much volume and profit does each marketing agent contribute to my business?
- What is the ROI of each marketing driver?
- How should my budget be allocated across the marketing mix to optimize profits?
- Which tactics increase volume and profit most effectively?
- Is consumer response varying over time?
- Are there synergistic effects across my marketing efforts?
P&G marketers in advertising, promotions, and trade measure their performance using research and evaluation methods unique to their discipline. To maximize the company's
overall marketing investment and to provide answers to the challenges listed here, P&G employs marketing mix modeling. In this way, P&G has led the way with new and
traditional marketing approaches under the umbrella of holistic, consumer-centric marketing based on what works rather than conventional wisdom. However, public relations
performance had not been broadly or consistently integrated into P&G's marketing mix analysis. Then in 2005 P&G decided it needed to establish public relations into its
marketing mix modeling to quantify not only the extent to which PR promotes awareness of the company brands but also the degree to which PR drives sales. Given the amount of
simultaneous marketing expenditure across the globe, this was no small undertaking.
With the full support of P&G marketing and under the leadership of P&G's External Relations executive Hans Bender, it was agreed that public relations data would be fed
into preexisting marketing mix models to learn more about just how public relations initiatives contribute to sales, both in PR terms and in relation to other marketing agents. By
verifying the process by which P&G could link PR to sales, the company's marketers and the PR people who support them would be able to improve PR efficiency and effectiveness,
create public relations strategies pre-tested to deliver sales, and integrate PR analytics into the brand planning process as a key element of improving overall marketing--not
just PR--ROI. Once this process was established, it was branded internally as "PRevaluate," and the plan was to expand the program globally across all P&G brands.
For more than a decade, Procter & Gamble has collaborated with Delahaye, the company's primary public relations research and evaluation partner, to accurately assess
performance and to provide research-based guidance for P&G's PR-based "Influencer Marketing" (IM) programs. The objective in taking this approach was to accurately,
consistently, and affordably represent the uniqueness of IM programs within the marketing mix and to clearly demonstrate PR's contribution to sales by brand, by product, by
campaign, and by media type over time and across regions. In so doing, the goal was to provide P&G brand marketing investment decision makers with the reliable intelligence
they need to efficiently boost sales volume. The research program targeted the conventional marketing wisdom within P&G, where marketers trusted the value of PR but lacked
sufficient basis for making a quantifiable connection between PR and sales.
Public relations performance data was assembled from 2003 and 2004 for seven pilot brands, including Olay and Pantene, as well as the brands with which they
compete. Print, broadcast, and Internet coverage was evaluated for the presence of specific components such as frequency, reach, tone, and key message delivery. Each brand's media
coverage was also analyzed based on reach, frequency, and quality of coverage. From the complete set of data, P&G's marketing mix modeling team identified certain elements to
use as the basis for properly representing the unique qualities of PR within the marketing mix model.
To prove the PR-to-sales connection, enormous amounts of data, including week-to-week sales and marketing data from around the world for each brand, were gathered, integrated,
and analyzed. PR campaign plans, tactics, and results for a total of seven brands were mapped across a time frame of from one to three years, and the resulting data were assembled
and analyzed. The sales, marketing, and PR data were subsequently processed through the marketing mix analysis to determine the outcome.
The marketing mix analysis results proved positive: PR-based Influencer Marketing was shown to efficiently deliver high levels of return, often surpassing the ROI of mass-
market advertising, price promotions, and trade activity. As a result of this endeavor, P&G has made measurement an integral part of all major IM programs on key brands
globally. The expectation is that PR's new measurement focus will likely drive a higher degree of discipline throughout PR, and that measurement will allow for consistent
learning, recycling, and application. Remarkably, this project required no incremental spending; it was simply an advanced application of preexisting research and analysis
endeavors.
Contacts: Mark Weiner, 203.663.2446, [email protected].