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Measuring the Value of Financial and Marketing Communication Investments - By Padilla Speer Beardsley 2009

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  • Padilla Measurement Presentation Slideshare

    1. 1. Measuring the Value of Financial and Marketing Communication Investments
    2. 2. Agenda <ul><li>Introductions and Level Setting </li></ul><ul><li>Why Measurement is Difficult </li></ul><ul><li>The Importance of Measurement </li></ul><ul><li>Common Methodologies </li></ul><ul><li>5 Fundamentals of Measurement </li></ul><ul><li>Case Study Examples </li></ul><ul><li>Conclusion/Questions </li></ul>
    3. 3. The State of Affairs <ul><li>Anything that costs money must be justified </li></ul><ul><li>Most organizations don’t know how to measure the value, impact, effects and relative return on communication efforts </li></ul><ul><li>As a result, many resort to counting what they can count </li></ul>
    4. 4. Common Questions We Get <ul><li>How do I calculate the ROI of marketing & communications? </li></ul><ul><li>How do I weigh individual elements in the marketing mix? </li></ul><ul><li>Can I tie publicity to sales or a stock price? </li></ul><ul><li>What have you done for me lately? </li></ul>
    5. 5. First, Some Definitions… <ul><li>Marketing – is the process of enticing potential customers and clients to buy a product and/or service. </li></ul><ul><li>Managing the “Four P’s” – Product, Price, Place, Promotion </li></ul>
    6. 6. First, Some Definitions… <ul><li>Marketing Communications – are messages and related media used to communicate with a market. </li></ul><ul><li>Key tools include advertising, public relations, Web sites, social media, brochures/collateral, events, trade shows, etc. </li></ul>
    7. 7. First, Some Definitions… <ul><li>Advertising – the strategic purchase of space in order to place messages primarily intended to persuade or sell </li></ul><ul><li>Paid space, controlled messages </li></ul>
    8. 8. First, Some Definitions… <ul><li>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 </li></ul><ul><li>Can be used as a tool for marketing AND other business functions </li></ul>
    9. 9. More Definitions <ul><li>Investor Relations – A responsibility within public companies that provides investors with an accurate view of a company. </li></ul><ul><li>Essentially, public relations for the investment community that is subject to strict SEC rules and regulations . </li></ul>
    10. 10. More Definitions <ul><li>Publicity/Media Relations – use of third-party media organizations to communicate with audiences </li></ul><ul><li>It’s a tactic in the public relations toolbox </li></ul>
    11. 11. The basic hierarchy <ul><li>Marketing </li></ul><ul><ul><li>Marketing Communications </li></ul></ul><ul><ul><ul><li>Advertising and Public Relations </li></ul></ul></ul><ul><ul><ul><ul><li>Publicity </li></ul></ul></ul></ul><ul><li>Finance </li></ul><ul><ul><li>Investor Relations </li></ul></ul><ul><ul><ul><li>Public Relations </li></ul></ul></ul>
    12. 12. 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 Industry Analysts
    13. 13. Why Measure? Because the Results Help: <ul><li>Prioritize work </li></ul><ul><li>Justify the spend </li></ul><ul><li>Refine a program </li></ul><ul><li>Move from anecdotal to a factual </li></ul><ul><li>Shift from “reactive” to “proactive” mode </li></ul>
    14. 14. Value of Measurement <ul><li>Prove that you met objectives </li></ul><ul><li>Benchmark/track performance </li></ul><ul><li>Gain competitive advantage </li></ul><ul><li>“ Move the needle” </li></ul><ul><ul><li>Sales? </li></ul></ul><ul><ul><li>Awareness? </li></ul></ul><ul><ul><li>Response – trial, evaluation, adoption </li></ul></ul>
    15. 15. Why is it so difficult? <ul><li>It takes time </li></ul><ul><li>It takes money </li></ul><ul><li>We’re dealing with human behavior </li></ul><ul><li>External factors </li></ul><ul><li>There are no 1:1 correlations </li></ul><ul><li>Integrated programs </li></ul><ul><li>It’s viewed as justification rather than a value-add </li></ul><ul><li>Distinguishing between “Value” and “ROI” </li></ul>
    16. 16. Determining Value
    18. 18. You need to determine <ul><li>How much should I to put into it? </li></ul><ul><li>Do I know the vital metrics (for finance, operations, sales, marketing, etc.)? </li></ul><ul><li>Can you act on the data? </li></ul><ul><li>What’s my time frame? </li></ul>
    20. 20. The “HIPPO” Methodology Based on the Hi ghest P aid P erson’s O bjective
    21. 21. The “Penguin” Methodology Each tactic measured the same way
    22. 22. The “Monkey-See-Monkey-Count” Methodology Counting … just because you can
    23. 23. The “T-Rex” Methodology <ul><li>So big that it consumes your entire budget </li></ul>
    24. 24. 5 Fundamentals of Measuring Programs <ul><li>Start with research </li></ul><ul><li>Set measurable objectives </li></ul><ul><li>Only measure what’s important </li></ul><ul><li>Use the right tools </li></ul><ul><li>Measure continuously </li></ul>
    25. 25. START WITH RESEARCH <ul><li>Fundamental #1 </li></ul>
    26. 26. Numerous Research Options <ul><li>Quick surveys and polls </li></ul><ul><li>Omnibus surveys </li></ul><ul><li>One-on-one in-depth interviews </li></ul><ul><li>Focus groups (traditional or online) </li></ul><ul><li>Advertising analysis </li></ul><ul><li>Intercepts/on-the-spot surveys </li></ul><ul><li>Media Monitoring </li></ul><ul><li>Social Media monitoring </li></ul><ul><li>Competitive analysis </li></ul><ul><li>Media content analysis </li></ul>
    27. 27. SET MEASURABLE OBJECTIVES <ul><li>Fundamental #2 </li></ul>
    28. 28. Tips to Developing Measurable Objectives <ul><li>Objectives must: </li></ul><ul><ul><li>Address a specific outcome </li></ul></ul><ul><ul><li>Designate the specific target audience </li></ul></ul><ul><ul><li>Specify a specific level of attainment </li></ul></ul><ul><ul><li>Identify a specific timeframe </li></ul></ul>
    29. 29. Example: Business Objective #1 <ul><li>Generate $25 million in revenue from X product line </li></ul><ul><ul><li>Sales Objective: Improve win-ratio by 40 percent and shorten sales cycle by 20 percent </li></ul></ul><ul><ul><li>Marketing Communication Objective: Increase qualified sales leads by 20 percent over 2008. </li></ul></ul><ul><ul><li>Product Marketing Objective: Identify 3 to 5 possible line extensions based on feedback and use of initial launch model </li></ul></ul><ul><ul><li>Financial Communication Objective: Increase institutional ownership by 10 percent </li></ul></ul>
    30. 30. Business Objective #2 <ul><li>Improve customer preference of brand </li></ul><ul><ul><li>Marketing Objective: By 4Q09, achieve 55% brand awareness among 25-40 year old men in the U.S. by increasing awareness by 10% </li></ul></ul><ul><ul><li>Financial Communication Objective: Increase number of analysts following the company </li></ul></ul><ul><ul><li>Communication Objective: Maintain #1 share-of-voice position in tier one trade publications compared to competitor A, B & C </li></ul></ul>
    31. 31. ONLY MEASURE WHAT’S IMPORTANT <ul><li>Fundamental #3 </li></ul>
    32. 32. Metrics – the 3 O’s <ul><li>Outputs: Execution of program elements </li></ul><ul><ul><li>All work measured on budget, timing & message alignment </li></ul></ul><ul><ul><li>Are we getting the work done efficiently and effectively? </li></ul></ul><ul><li>Outtakes: The Net Impression </li></ul><ul><ul><li>Strive for on majority of deliverables </li></ul></ul><ul><ul><li>Media coverage, circulation, event attendance, distribution, search rankings </li></ul></ul><ul><ul><li>Are we reaching the right people? </li></ul></ul><ul><li>Outcomes: The behavior that follows </li></ul><ul><ul><li>Tied to business goals </li></ul></ul><ul><ul><li>Sales increase, lead generation, unaided awareness, incoming vs. outgoing media calls </li></ul></ul><ul><ul><li>Programs, not tactics </li></ul></ul>
    33. 33. Audience-Specific Outputs, Outtakes and Outcomes Target Audience Cares About Desired Action Key Message Comm. Strategy Metric Financial Analysts <ul><li>Company performance </li></ul><ul><li>Strength of management team </li></ul><ul><li>Market leadership </li></ul><ul><li>Recommend stock </li></ul><ul><li>Buy/retain stock as core in long-term growth portfolios </li></ul><ul><li>Write positive reports </li></ul><ul><li>Next big market opportunity is “XYZ”, and our company has a leadership position here </li></ul><ul><li>Company performance exceeds industry leaders </li></ul><ul><li>Focus conference activity and regional road shows on priorities </li></ul><ul><li>Upgrade IR web site </li></ul><ul><li>Increase market cap </li></ul><ul><li>Change mix of shareholders </li></ul>Channel Partner <ul><li>Sales leads </li></ul><ul><li>Revenue </li></ul><ul><li>Margin </li></ul><ul><li>Promote to existing customers </li></ul><ul><li>Recommend in new proposals </li></ul><ul><li>Accurately represent us </li></ul><ul><li>Easiest to install </li></ul><ul><li>Easiest to use </li></ul><ul><li>Easiest to do business with </li></ul><ul><li>Education </li></ul><ul><li>“ Company in a box” </li></ul><ul><li>Regional advertising </li></ul><ul><li>Leads </li></ul><ul><li>Sales cycle </li></ul><ul><li>Jobs quoted </li></ul><ul><li>Jobs won </li></ul><ul><li>Revenue by partner </li></ul>
    34. 34. USE THE RIGHT TOOLS <ul><li>Fundamental #4 </li></ul>
    35. 35. Sample Measurement Tools <ul><li>Radian6 </li></ul><ul><li>Lexis/Nexis </li></ul><ul><li>Google News </li></ul><ul><li>Google Analytics </li></ul><ul><li> </li></ul><ul><li>Clipping Services </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>BlogPulse </li></ul><ul><li>Technorati </li></ul><ul><li>Survey Monkey </li></ul><ul><li>Gallup </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>D&B Database </li></ul><ul><li> </li></ul>
    36. 36. MEASURE CONTINUOUSLY <ul><li>Fundamental #5 </li></ul>
    37. 37. Benchmark, Track, Analyze and Act
    38. 38. Minneapolis 612-455-1700 New York 212-752-8338