How Are Today’s CCO’s Measuring Their Success?
Nasdaq’s recent survey of 101 Chief Communications Officers (CCOs) examines how public relations and communications leaders are measuring the success of their PR and marketing efforts. Across the board, more CCOs are being held accountable for what were traditionally viewed as marketing key performance indicators (KPIs). These include web traffic (65%), search rankings (65%), sales and lead conversion (63%), content marketing (57%) and customer loyalty (56%).
Analytics: The New Clip Report
For the last 10 years, I have repeatedly told my team, and our clients, that analytics are the new clip report. Every PR person needs to know how to track and measure their work through analytics since the C-suite understands and responds to data-driven ROI.
Ugh! Can We Please Stop Using AVE?
Unfortunately, many CCOs still rank advertising value equivalency (AVE) as the most important KPI when measuring PR performance (10%). An even higher number of CCOs are still held accountable for AVE (37%) even if they don’t believe it is the most important metric. But, when was the last time you heard a CEO mention AVE on an earnings call? The same could be said for tweets, likes and shares (8% of CCOs cited social media shares as the most important KPI for their organization). In my opinion, these are not business concepts, but rather invented terms propagated by the platforms themselves that have no intrinsic business value. I am not saying that they don’t have any value – just not inherent value in evaluating the health of a business.
One of the most important aspects of our job as communicators is to speak in a language that the C-suite and our audience understand. The C-suite understands business goals and objectives that typically center around revenue generation, customer acquisition, lead generation, market penetration and brand recognition. If we can measure our work through its direct impact on these goals, senior leadership will pay attention, and that’s how we garner executive support, increased budgets and additional headcount. When we can demonstrate that communications is a “revenue center” for an organization not just a “cost center,” that’s when we provide the most value. It seems that many CCO survey participants have embraced this concept citing Customer Lead Conversion as the top KPI they believe they need to track (16%).
Follow the Money
The Holy Grail in marketing and PR ROI is to clearly demonstrate revenue generation and lead generation, which leads us back to revenue. Depending upon an organization’s sales model, tracking lead generation or revenue may be challenging or even impossible. For example, a food manufacturer that sells through a distributor, who then sells to a retailer, and never meets the customer, may not be able to tell if a fantastic product review in a national newspaper drove sales or if it was the 50% discount offered by the store. That may be why CCOs most often cited website traffic (75%) as the number one KPI they are held responsible for. It’s easy to measure web traffic and online activity could be viewed as a precursor to sales and lead generation.
Ultimately what this survey demonstrates is that there is little consistency and consensus among CCOs on how and what we should be measuring, and even less agreement with executive teams that often set the KPIs. As an industry, we still seem reticent to change and letting go of measurement concepts that were used as far back as 50 years ago. At the same time, significant progress has been made even if it isn’t ubiquitous. Ideally, I would love to see the public relations profession adopt the type of universal standards of measurement that other industries have been able to champion. I believe that the Barcelona Principles, which are referred to in the survey, lack the specificity and the precision needed to have real impact. Essentially, it comes down to a list of do this not that, but it doesn’t tell you exactly how or what the formula is to calculate those elusive KPIs.
What is clear from Nasdaq’s research is that we still have a long way to go – both to help public relations and communications professionals identify and understand key metrics and to lobby the C-suite to accept and endorse those methods of measurement.
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