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Measuring the Value of

Financial and Marketing

Communication Investments

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Agenda

• Introductions and Level Setting

• Why Measurement is Difficult

• The Importance of Measurement

• Common Methodologies

• 5 Fundamentals of Measurement

• Case Study Examples

• Conclusion/Questions

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The State of Affairs

• Anything that costs money must be justified

• Most organizations don’t know how to measure the value, impact, effects and relative return on communication efforts

• As a result, many resort to counting what they can count

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Common Questions We Get

• How do I calculate the ROI of marketing & communications?

• How do I weigh individual elements in the marketing mix?

• Can I tie publicity to sales or a stock price?

• What have you done for me lately?

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First, Some Definitions…

Marketing – is the process of enticing potential customers and clients to buy a product and/or

service.

Managing the “Four P’s” – Product, Price, Place, Promotion

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First, Some Definitions…

Marketing Communications – are messages and related media used to communicate with a

market.

Key tools include advertising, public relations, Web sites, social media, brochures/collateral, events,

trade shows, etc.

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First, Some Definitions…

Advertising – the strategic purchase of space in order to place messages primarily intended to

persuade or sell

Paid space, controlled messages

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First, Some Definitions…

Public Relations – a planned effort by an organization to build reputation and influence

behavior among groups of people important to its success through acts and communications

Can be used as a tool for marketing AND other business functions

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More Definitions

Investor Relations – A responsibility within public companies that provides investors with an

accurate view of a company.

Essentially, public relations for the investment community that is subject to strict SEC rules

and regulations.

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More Definitions

Publicity/Media Relations – use of third-party media organizations to communicate with

audiences

It’s a tactic in the public relations toolbox

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The basic hierarchy

• Marketing– Marketing

Communications• Advertising and

Public Relations– Publicity

• Finance– Investor Relations

• Public Relations

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Together, they help organizations reach the audiences important to their success

Your company

Customers

Shareholders

Employees

Suppliers &Partners

Channel Partners

Media

Industry Associations

Standards Bodies

IndustryAnalysts

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Why Measure? Because the Results Help:

• Prioritize work • Justify the spend• Refine a program• Move from anecdotal to a factual• Shift from “reactive” to “proactive” mode

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Value of Measurement

• Prove that you met objectives• Benchmark/track performance• Gain competitive advantage• “Move the needle”

– Sales?– Awareness?– Response – trial, evaluation, adoption

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Why is it so difficult?

• It takes time• It takes money• We’re dealing with human behavior• External factors• There are no 1:1 correlations• Integrated programs • It’s viewed as justification rather than a

value-add• Distinguishing between “Value” and “ROI”

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Determining Value

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EVERYTHING CAN BE MEASURED!!!

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You need to determine

• How much should I to put into it?

• Do I know the vital metrics (for finance, operations, sales, marketing, etc.)?

• Can you act on the data?

• What’s my time frame?

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IT’S A JUNGLE OUT THERE

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The “HIPPO” Methodology

Based on the Highest Paid Person’s Objective

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The “Penguin” Methodology

Each tactic measured the same way

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The “Monkey-See-Monkey-Count” Methodology

Counting … just because you can

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The “T-Rex” Methodology

So big that it consumes your entire budget

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5 Fundamentals of Measuring Programs

1. Start with research

2. Set measurable objectives

3. Only measure what’s important

4. Use the right tools

5. Measure continuously

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START WITH RESEARCHFundamental #1

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Numerous Research Options

• Quick surveys and polls

• Omnibus surveys

• One-on-one in-depth interviews

• Focus groups (traditional or online)

• Advertising analysis

• Intercepts/on-the-spot surveys

• Media Monitoring• Social Media

monitoring• Competitive

analysis• Media content

analysis

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SET MEASURABLE OBJECTIVES

Fundamental #2

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Tips to Developing Measurable Objectives

• Objectives must:– Address a specific outcome– Designate the specific target audience– Specify a specific level of attainment– Identify a specific timeframe

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Example: Business Objective #1

• Generate $25 million in revenue from X product line– Sales Objective: Improve win-ratio by 40 percent and shorten

sales cycle by 20 percent – Marketing Communication Objective: Increase qualified sales

leads by 20 percent over 2008. – Product Marketing Objective: Identify 3 to 5 possible line

extensions based on feedback and use of initial launch model– Financial Communication Objective: Increase institutional

ownership by 10 percent

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Business Objective #2

• Improve customer preference of brand– Marketing Objective: By 4Q09, achieve 55% brand

awareness among 25-40 year old men in the U.S. by increasing awareness by 10%

– Financial Communication Objective: Increase number of analysts following the company

– Communication Objective: Maintain #1 share-of-voice position in tier one trade publications compared to competitor A, B & C

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ONLY MEASURE WHAT’S IMPORTANT

Fundamental #3

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Metrics – the 3 O’s

Outputs: Execution of program elements– All work measured on budget, timing & message alignment

– Are we getting the work done efficiently and effectively?

Outtakes: The Net Impression– Strive for on majority of deliverables

– Media coverage, circulation, event attendance, distribution, search rankings

– Are we reaching the right people?

• Outcomes: The behavior that follows– Tied to business goals

– Sales increase, lead generation, unaided awareness, incoming vs. outgoing media calls

– Programs, not tactics

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Audience-Specific Outputs, Outtakes and OutcomesTargetAudience

Cares About

Desired Action

KeyMessage

Comm. Strategy

Metric

Financial Analysts

Company performanceStrength of management teamMarket leadership

Recommend stockBuy/retain stock as core in long-term growth portfoliosWrite positive reports

Next big market opportunity is “XYZ”, and our company has a leadership position hereCompany performance exceeds industry leaders

Focus conference activity and regional road shows on prioritiesUpgrade IR web site

Increase market capChange mix of shareholders

Channel Partner Sales leadsRevenueMargin

Promote to existing customersRecommend in new proposalsAccurately represent us

Easiest to installEasiest to useEasiest to do business with

Education“Company in a box”Regional advertising

LeadsSales cycleJobs quotedJobs wonRevenue by partner

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USE THE RIGHT TOOLSFundamental #4

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Sample Measurement Tools

• Radian6• Lexis/Nexis• Google News• Google Analytics• Compete.com• Clipping Services• Search.twitter.com• Boardleader.com

• BlogPulse• Technorati• Survey Monkey• Gallup• Bizshark.com• Alexa.com• D&B Database• Backtype.com

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MEASURE CONTINUOUSLYFundamental #5

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Benchmark, Track, Analyze and Act

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