INDUSTRY GUIDE
From Measurement to Management
PART 4: IMPACT
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From Measurement to Management Part 4: Impact
EDITOR’S NOTE Impact is the fourth of a five-part PR measurement series based on the five key dimensions adopted in the LEWIS measurement framework. Previous guides include: Introduction with Foreword from AMEC Exposure Engagement Preference Subsequent guides include: Advocacy
CONTENTS Overview 4 Valuing leads 5 Defining conversion goals
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Key KPIs 8
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From Measurement to Management Part 4: Impact
OVERVIEW This discussion has detailed a wide range of key performance indicators that help communicators report the effect of their work and the content they create. For many campaigns, output measures around exposure, engagement and preference represent useful enough insights for marketers to justify and improve programs. For others, like issues-focused campaigns, the action output is simple to measure, like signed petitions, or even a vote for an issue. A CMO is likely to be more comfortable with public relations teams’ performance when armed with an understanding of coverage levels and opinion measures. But it is probably unrealistic to expect the CFO to feel the same way. For business leaders, output metrics are nice, but only outcome metrics yield investment. The CMO’s ability to quantify any category of activity’s effect on the bottom line is requisite for a conversation with his peers, and that’s why impact metrics center on business outcomes.
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From Measurement to Management Part 4: Impact
VALUING LEADS For the CFO, nearly all KPIs and all impact boil down to the ultimate metric: money. Is the marketing spend driving return on investment? Is it driving revenue? This is answered directly in the realm of paid advertising. Whether broadcast or online, increases in leads, sales and revenue are directly linked to ad performance and can be expressed in dollar units. With precise knowledge of input costs and data-based views of outcome frequency, each lead can be valued as it makes its way toward final conversion. E-commerce makes measurement simplest. The easiest calculations are those for lower value, online purchases: if selling a product on the website yields $20 in profit and it takes $.50 of advertising spend to drive a visitor to an action portion of the website, and one in twenty visitors typically buys the item, it’s easy to see that each lead is worth $1 ($20 X 5%) and that a $.50 spend yields a 2x return. This data both validates the advertising spend as well as providing baseline metrics for web content improvement goals, such as converting more than 5% of visitors to customers. Most sales, however, undergo longer consideration, and the purchasing process does not terminate at the website. Whether larger ticket items, more complex business-to-business sales, or corporate fundraising efforts, KPIs center on the ongoing nurturing of the potential customer or donor. A single ad for a $100,000 product will not drive purchase in a single web visit. These sorts of decisions require numerous touch points: online research sessions, visits to useful content sources, and a range of other
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From Measurement to Management Part 4: Impact
interactions usually driven by a sales team. For these types of sales, website conversion levels closer to a quarter of a percentage point (.25%) would be considered nothing less than spectacular. Marketers know all too well it takes more than one article or one advertisement to sell a high value or complex product. A range of content and third party validation stops dot the pathway before conversion. But if a high ticket product yields $100,000 in profit, at .25% conversion, each lead would have a value of $250. A $20,000 monthly campaign would therefore begin to return investment, in this example, as soon as it surpasses eighty leads per month. Google suggests also factoring in word-of-mouth data, if available, as well as lifetime customer value.
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From Measurement to Management Part 4: Impact
DEFINING CONVERSION GOALS For this reason, conversion goals for higher-level opportunities should focus on delivery of opportunity – number of trials, downloads, request for information. These same measures can be used to assess the effectiveness of campaigns in driving event attendance, publication subscription, participation in trials, downloads of coupons, and other actions. Beyond simply tallying result, by comparing these types of impact actions with overall web traffic levels, insights into targeting and content effectiveness can be derived. If traffic levels are high but downloads are low, either the wrong visitor is being delivered to the website, or the wrong content is being served to them upon arrival. Conversion is also the point at which all the activities undertaken in each marketing channel ideally converge, making it difficult to discern in many cases which channel was “responsible” for any particular lead. To some extent, this can only be discerned definitively through direct survey of incoming customers, voters, donors, etc. Marketing attribution software has recently shown promise in doing so using tags and algorithms to assign value proportionally to each touch point, according to its influence on the customer’s purchase or conversion decision. For brands that don’t yet have these technologies or measures in place, when it comes to how earned media affects business impact, simplicity and leveraging the website is key to the approach. Within Google Analytics, e-commerce conversions like those above are pre-loaded or easy to define, as well as “goals,” which can track other discrete actions, like transactions with a minimum purchase amount, visits of a preset number of pages, or the amount of time spent on a screen. By assigning a monetary value for each of these actions, “goal value” can also be calculated.
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From Measurement to Management Part 4: Impact
KEY KPIs As website metric platforms like GA yield the most accessible and frequently updated measures, LEWIS currently recommends the following Impact metrics for most media relations programs: Number of unique visitors to website driven from earned placements Number of downloads driven from earned placements Number of registrations/subscriptions driven from earned placements Number of demos/request for info driven from earned placements Number of e-commerce conversions arising from earned placement Number of goal completions arising from earned placements Total goal value from traffic driven by earned placements The most sales-focused marketing organizations will take these goals a step further, divide their marketing spend into these KPIs to try to calculate measures of ROI. But not every organization is focused merely on sales. For those whose highest goals center around issues, crisis and philanthropy, the most desired outcomes might actually best be measured through KPIs centering on engagement and preference. And there’s one more area of business outcome marketing and communications campaigns can impact – whether people are inspired to put forward their own personal brands in support of a product, service or issue. The final chapter in this series focuses on that dimension of measurement: ADVOCACY.
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White Paper Exposure
About us LEWIS was founded in 1995 by a former journalist and, since then, it has grown to over 500 employees based in more than 28 offices across the US, EMEA and Asia Pacific. Its regional headquarters are in London, San Francisco and Singapore. LEWIS is known for delivering bold digital communications campaigns that enhance revenue, value and reputation for global brands. Digital communications services span PR and media relations, social media marketing, search engine optimization and digital content production.
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