Marketing PR revolution: how will professionals navigate the new landscape?

Marketing public relations, as we've known it, is history--new technologies and methodologies, coupled with a strict marketing imperative that demands a return on investment, are forcing marketing investment decision makers to think in new ways. Add to this mix the increasingly fractionated media universe and the business predicate that requires these media to turn a profit, and the result is an irrevocably changed marketing profession that gives rise to marketing public relations (MPR).

This new environment holds both opportunity and risk: the upside is that MPR can begin to supplant "paid media" because it offers so much of what advertisers envy--involvement, credibility and value. The downside is obsolescence.

With so much at stake, how does a public relations professional navigate the new landscape? Some companies and brands respond by welcoming the change and doing what it takes to exploit it. Through new applications of public relations research and advanced statistical analyses, they have been able to clearly demonstrate PR's ability to drive sales and deliver a strong ROI (in terms of lowering overall marketing costs while delivering meaningful business outcomes like "sales"). They've also been able to accelerate other forms of marketing by making them even more effective.

NEW ENVIRONMENT PROPELS PR FORWARD

The media environment is changing: audiences are becoming more tightly clustered and more highly targetable. Media companies respond by creating more tailored vehicles to cater to these niche audiences (e.g., where we once had six television channels, new cable packages now offer more than 800). Traditional advertising-based television brands are now challenged by the advent of TiVo, a technology that allows TV viewers to simply skip commercials. At the same time, these new media companies have to make money, and the pressure to do so is enormous.

With their heavy dependence on mass media, conventional mass marketing advertising practices are at risk of becoming obsolete. Other forms of marketing are similarly challenged: promotions programs often lose money without building brand loyalty; the national "do-not-call" list in the U.S. has clamped a lid on outbound telemarketing, and so it goes. Yet companies and brands must continue to generate new and repeat sales.

Some observers opine that public relations has the most to gain in this new environment. But to achieve some higher level of primacy, PR departments have to change the way they work. Success will be contingent on PR's willingness to 1) work in a more integrated fashion with other marketing agents, and 2) use proven research techniques to clearly demonstrate a positive and meaningful ROI. In this setting, marketing decisions will be based on what drives results rather than on outmoded ideas of "what we've always done," and public relations strategies based on empty goals such as "generate significant buzz" will go by the wayside.

Beginning with the first contingency, the problem of "integration" within the marketing mix isn't confined to PR. Traditional marcom relationships don't allow for easy marketing optimization either. Mass-market advertising, specialty advertising and direct marketing, for example, aren't traditionally aligned with marketing public relations, event sponsorships and tradeshows. Even though each group has elements that may be better aligned, there is little or no integration or alignment across groups. Even at the brand level, where brand managers oversee advertising, promotions and PR, traditional views of each marketing agent often disallow the type of integration that would deliver meaningful leveraging and scale. The key to better integration lies in the second contingency, which speaks to the need for proven research techniques to better manage programs and to prove ROI.

Companies whose names you'd recognize in categories as diverse as retail, automotive, telecom, consumer packaged goods, financial services and motion pictures are feeding advanced news content analysis into sophisticated marketing mix models to make the PR-to sales connection. In its own right, this content analysis gives PR professionals the feedback they need to deliver a high quantity of quality media coverage. But when content analysis results and other marketing data are fed into a statistical model to establish the relative power of advertising, direct marketing, telemarketing, trade marketing, etc., the result is an ROI roadmap based on a common lexicon. Data points are the common thread woven throughout the marketing fabric. These savvy companies apply what they learn by shifting their emphasis within the marketing mix to drive the optimal combination of marketing for sales. It won't be long before PR, and every other form of marketing, is planned on the basis of "what drives sales?" rather than "what drives buzz?" And you'd better prepare for it.

WHAT SHOULD COMMUNICATORS DO?

You're not alone if you feel overwhelmed about what to do--the marketing environment is rife with brand and product proliferation, product commoditization, decreasing brand loyalty, price sensitivity, increased demand, less trust and message clutter along with rising costs and the need for accountability. Unfortunately, the typical internal marketing and communication environment is no easier to navigate. Senior executives want successful marketing communication campaigns to feed the top and bottom lines, but they don't know enough to tell company marketers how this can be accomplished. Likewise, the marketers don't know enough about how to ensure a high ROI to suggest a solution. The result is often stasis and limbo, which is to say, things never change.

But change they must, especially since PR is now more measurable and accountable, and because TV advertising, in particular, is growing more inefficient.

How are marketing investment decision makers responding? According to a survey of 250 marketing executives conducted by Patrick Marketing Group, marketing executives plan to increase their PR spend more than any other strategy to increase marketing action. What does marketing PR have going for it? To name a few of the most salient benefits

* increased brand message credibility

* improved media involvement among consumers

* the ability to deliver targeted messages to niche demos, psychographics, ethnic or regional audiences

* influence among opinion leaders and trendsetters

* the capacity to break through clutter to connect with customers and other stakeholders

* a track record of delivering all of these benefits economically and efficiently.

Marketing public relations pros are using research in two ways: to prove MPR's return on investment, and to improve MPR's return on investment.

Research helps demonstrate ROI and shows how wisely resources are being used by representing how PR delivers meaningful business outcomes (rather than clip volumes, ad values or audience tabulations) and by communicating MPR results "in language"--the language of marketing and the language of business. The result is often bigger budgets, higher visibility within the marketing organization and a seat at the table.

MPR research also helps continually improve ROI by providing the rigor to set "hard" objectives, to develop strategies that are pre-tested for performance and to monitor success over time versus comparison to competitors or "best practice." The result is often increased productivity, improved cost efficiencies, greater competitive advantage and better overall ROI.

TOOLS FOR MEASURING PR

Public relations practitioners have a number of resources at their disposal that improve measurement.

Media Content Analysis: a research technique for studying media in order to systematically and objectively identify the characteristics of the messages. For example, PR researchers analyze clippings and broadcast transcripts for references to an organization, and then analyze the content to determine trends and perceptions relevant to that brand, such as the degree of favorability.

Survey Research: a quantified assessment of attitudes held by a person, or a group, toward a subject, developed as a result of previous influences. Most survey research involves surveys among a representative sample of people. The carefully designed questionnaires are usually administered in a structured manner to uncover attitudes, needs or preferences.

Marketing-Mix Modeling: an analysis that draws data from disparate sources and then integrates them to provide insight into the ongoing process of marketing. Using traditional databases like sales, advertising Gross Rating Points or content analysis, researchers merge these data to create more complete views of the marketplace and to estimate the impact of advertising, PR, pricing, merchandising, competitive activity, seasonality and other factors. By understanding what drives sales, it's easier to explain past results and influence future sales.

PRIME TIME FOR MPR

In the December 2003 issue of Television Week, author Joe Mandese reported how Miller Brewing Co., one of the largest marketers in the U.S., changed its marketing strategy, shifting budgets away from TV advertising and into public relations. Miller's marketing team learned that PR has a significant impact on actual product sales relative to other forms of marketing, especially TV advertising. Mandese quoted Ranjit Choudhary, the marketing mix modeling specialist for Miller at the time, who said, "In this study, we found out that PR was much more efficient than other promotions for the brand."

Although many major marketers conduct the type of modeling discussed by Miller Brewing Co., few track or reveal the impact of PR on sales or its impact relative to other forms of marketing. But for Miller, which based its analysis on two and a half years of data--including sales data, promotional spending data, ratings data from Nielsen Media Research and proprietary PR research developed by Delahaye Medialink--the marketer claims to have uncovered PR's contribution to the bottom line.

Data are often the missing links when it comes time to demonstrate PR's impact within the mix, and this is the primary reason PR has been held back from becoming a strategic part of the brand planning process. The results from Miller are startling.

Based on the analysis, Miller learned that its PR campaigns generate roughly 1.2 percent of base product sales, or 4 percent of incremental product sales. That may not seem like a lot, but TV advertising generated only 5.3 percent of base sales and 17.3 percent of incremental sales. Although Miller's precise advertising to-PR spending ratio was not revealed in the article, it should be noted that the average U.S. industry average is 61:1 in favor of ad spending (whereas the ad sales-to-PR sales ratio is roughly 4:1 in favor of advertising, a much more efficient result).

Conceding that more research needs to be done, Choudhary predicted a change in Miller's marketing mix and that the change would come "at the expense of TV advertising budgets that would be shifted into PR."

To help Miller and other companies incorporate PR results into marketing mix models, Delahaye Medialink designed and deployed a new set of proprietary integratable PR metrics called "The Impact Score" and "The Net Effect" (see sidebar). The Impact Score applies a score based on the quality and tone of the placement, whereas Net Effect factors quality and tone by reach and frequency. Although the Impact Score and Net Effect are not completely analogous to advertising's Gross Rating Points (primarily because they reflect the "semi-controlled" nature of PR versus the totally "controlled" aspects of advertising), they have been successfully applied in a variety of marketing mix models.

CHANGE HAS TO HAPPEN

A 23 Oct. 2003 article in Ad Age, headlined "Survey: Network TV Does Worst Job of Proving ROI," was based on a survey of 222 marketing professionals. But the second-to-last spot in the ranking was public relations. This can't continue.

The upside is enormous: Advertising Age estimates the total U.S. advertising spend at US$235 billion; if even just a few percentage points drop to PR, the entire profession will achieve unheralded growth. The downside is obsolescence, as PR may become attractive to the people who are being left behind.

This marketing is happening, and it's happening with or without you ... because it has to.

Key Indicators

Frequency     999 News Items
Reach         99.1 Million Impressions
Tone          91% Very/Somewhat Positive
Impact        +70.0%
Net Effect    Positive 69.1 Million

Key Indicators by Division

               Frequency             Reach           % Very/Somewhat
                                                      Positive Tone

             Current   YTD    Current       YTD       Current   YTD
              Month            Month                   Month

Division A     15       24   1,285,500    9,154,711    100%     91%
Division B     12       17   6,882,180    7,710,761     95%     87%
Division C      7       16     568,000    1,933,588     98%     95%
Division D      5       12     384,206   15,077,551     89%     90%
Division E      4        9   1,217,595    1,769,886     75%     85%

             Average Impact         Net Effect
                 Score

             Current   YTD     Current       YTD
              Month             Month

Division A    +34%     +42%     302,443   4,766,333
Division B    +41%     +39%   3,133,058   3,402,935
Division C    +19%     +36%     105,932     552,453
Division D    +38%     +36%     158,972   5,273,769
Division E    +34%     +38%     560,776     767,364

Tone

Very Positive        31
Somewhat Positive    31
Neutral              30
Somewhat Negative     4
Very Negative         5

Note: Table made from pie chart.

Positioning

                   Favorable    Unfavorable

Social
Responsibility       68.9
Products &
Services             57.6          20.5
Senior
Management           45.6          15.6
Workplace            42.5          12.3
Financial
Performance          35.8           5.6

Note: Table made from bar graph.

THE IMPACT SCORE AND NET EFFECT

Media Content Analysis

* Reach

* Frequency

* Presence of Key Messages

* Impact

** Front page/Cover

** Headline/Lead

** Initial Mention

** Extent of Mention

** Dominance

** Visuals

* Tone

Mark Weiner is CEO of Delahaye Mediakunk Worlwide. He can be reached at [e-mail], or visit www.delahaye.com