CorpComms Magazine

It is tough out there. Times are hard, spending is down and more companies are beginning to feel the pinch. Against this background, finance directors come under mounting pressure from shareholders, fellow board members and external advisers to cut costs where possible. A long, hard look around their organisation will invariably follow, after which decisions and incisions will be made.

Some areas are easier to evaluate than others. Sales departments generate hard cash, for instance, and if anyone on the team is not performing, they can be handed their P45 without further ado.

Corporate communications teams are harder to assess. They cost money, take up space and provide no tangible benefit to the business. At least, that is the view of some of the more old-fashioned members of the finance director community.

But many corporate communication professionals are determined to prove them wrong. ‘We want to know how are our messages are getting across, where we are doing well and where we can improve,' says John Neilson, group media relations director at BAe Systems.

Neilson and his peers are helped in their endeavours by a growing band of external consultants, who do not just monitor the media but evaluate it. This used to be done by just a handful of firms but the sector has expanded over recent years and is expected to continue in this vein.

‘In the past, evaluation used to be seen as a luxury. But we have seen a big increase in demand over the past 12 months,' says Jeremy Thompson, managing director of media monitoring and evaluation agency Durrants.

Growth can be attributed to several factors. First, and most positively, corporate communications and media relations teams are becoming more professional. They are moving closer to the boardroom, they are earning more respect and they are keen to prove their worth by external, objective measures.

‘We used to use internal measurements but these were quite subjective. Now we need to be more objective so we have something tangible to show senior managers. Our franchise health is very important to us as a group and media perception is a key part of that,' says Alistair Smith, media relations director at Barclays.

‘When I talk to my peers, some people don't use external valuation tools at all and some people fear it but we are under pressure to demonstrate our contribution to the group and independent analysis helps us to do this,' says Neilson.

In many cases, corporate communication teams have become larger and more expensive over the years. As corporate communications has become a more respected function, participants have seen their remuneration rise. This may have gone more or less unnoticed during the fat years but it is likely to put increasing pressure on directors and their staff during the lean times.

‘Many professionals are asking How can I justify my existence? If they don't evaluate their performance, how do they know they are doing a good job and how do their senior colleagues know they are doing a good job. Evaluation techniques help them to justify their job, their pay rise and their bonus,' says Andrew Muir, who runs the international division of US software group Vocus.

‘External evaluation is important for the group and it is important for me too. I need to watch my back and proving that what I do makes a difference helps the company and helps me,' admits one corporate communications director.

Techniques have become much more sophisticated over the past few years. Companies now face a plethora of choices about how they evaluate media coverage and how they evaluate the teams behind the coverage.

‘Evaluation used to consist of glossy reports produced some time after an event. Now we can provide real-time data about how a company is faring during an event or a crisis,' says Thompson.

‘We have teams of analysts working in shifts, day and night, inputting information and analysing whether coverage of any given company is positive, negative or neutral. We are sent electronic feeds by the major newspaper groups at 10.30 in the evening so by the time the papers arrive on a chief executive's desk the following morning, we are able to provide the corp comms team with an evaluation of that day's press coverage.'

Real time evaluation

Durrants is not alone in offering a daily service. ‘We evaluate coverage on a daily basis, using a variety of key performance indicators, such as column inches, reach and message penetration. We do quantitative and qualitative analysis so companies can see not just how much coverage they are getting but the sort of coverage they are getting and where they are appearing, whether it be the front page of the FT's Companies and Markets page or the bottom half of a left-hand page. Until recently, this sort of service was provided three to four weeks after something happened, by which time it was too late to do anything about it. Now we do it every day,' says Marcus Gault, managing director of Precise Media.

Vocus also stresses its ‘real-time' output. The group uses interactive technology, which is designed to allow media teams to see who is reading their press releases, whether journalists are responding to messages and how coverage is linked to the work being done.

‘In simple terms, if you are sending press releases to 200 journalists and 25 of them are reading them, you should stop sending them to the other 175 people. It is a waste of your time and you are boring them. At a more granular level, our evaluation tools can discern the link between coverage and PR activity. If 20 per cent of your staff are delivering 80 per cent of your output, then changes need to be made. As a corp comms director, you can see what is working and what isn't as well as who is working and who isn't,' says Muir.

Vocus provides fancy tools for the boardroom, allowing directors to overlay share price graphs on top of PR activity charts, the intention being that the price goes up on the back of concerted PR efforts.

Clearly this works for some companies but rival evaluators extol the virtues of a more personal approach. ‘To analyse coverage properly, you have to use people. Computers can't really pick up sentiment,' says Gault. ‘It is difficult for computers to detect irony and tone' agrees Thompson.

Gault points out that companies use evaluation services for a variety of reasons. ‘People evaluate simply to see how successful they are at getting their message across in the media or to get an indication of sentiment towards their company versus competitors. Companies look closely at ‘share of voice,' to see how much noise they are making versus their peers and how much of that noise is positive,' he says.

‘They also want to find out which journalists need more work, which journalists are writing more about the competition and which journalists are writing consistently negative stories about them.'

Constant feedback

Many media evaluation companies stress their ability to respond and analyse coverage on an instant or quasi-instant basis. And some believe events of recent weeks prove just how necessary is the service.

‘When stories are breaking on a minute-by-minute basis, corporate communications people need to be able to evaluate how their companies are perceived and how their messages are being received so they know how to respond. Many companies still get the bound tome at the end of the month or the end of the quarter but this is no longer sustainable. The world has changed and people need real-time feedback about what is and isn't working,' says Muir.

This may work for some corporate communication teams but others are not looking for instant feedback, preferring a more considered type of analysis.

‘We get reports every three months which show how our messages are coming across, where we are appearing and how we are perceived versus the competition. There are not usually any surprises in there but it is useful feedback. I don't need a daily update though. I think we should be able to do that sort of work ourselves,' says Barclays' Smith. ‘We like to look back. For instance, we get a report a few weeks after our interims and that helps us to plan for the full year figures.' 

BAe Systems uses a blend of tools and measurements, including an annual survey by research group Ipsos Mori, which is conducted not just in the UK but also in America, Australia, Sweden, South Africa, India and, this year, Saudi Arabia.

‘After last year's survey, we realised that we needed to raise the profile of some of our senior management teams across the different businesses. We also identified a need to highlight our corporate responsibility work and to showcase some of the good work we have been doing in safety and diversity. We hope to see the impact of this in our results next year,' says Neilson.

While few would question the benefits of some external evaluation and analysis, there is the thorny question of cost. Patrick Kerr, head of corporate communications at Reed Elsevier, says: ‘To be cynical, someone, somewhere is always going to be trying to sell me some evaluation tool. I can see why it might be useful for consumer-facing businesses or businesses with big brands but for a highly-specialised business like ours, I don't think we really need it. I evaluate my team. I have key performance indicators and I need to account for myself with the chief executive, but I do it internally mainly. We do ask Brunswick to carry out an annual audit of senior journalists but it is more quantitative than qualitative.'

Claire O'Sullivan, associate director at Metrica, acknowledges that cost can be an issue but suggests that evaluation pays for itself. ‘Hard data, real facts about what PR can and can't achieve, is critical to support PR consultancy - both in terms of delivering results and counselling clients - yet very often the investment required to deliver those hard facts is not made. While I understand that budget is often a factor here, it is worth giving consideration to the fact that analysis and evaluation in the PR lifecycle not only proves return on investment, important for protecting budget, but is also valuable for improving effectiveness and efficiency of budget. Only by proving the value of what PR does will it ever get the true credit it deserves.'

O'Sullivan does accept, however, that soft analysis often goes by the wayside. ‘The first (and often only) thing the board usually want to see are the financial figures,' she says. Many companies look at advertising valuation equivalents (AVEs), where companies will be shown how much media coverage they received and how much that would have cost them in advertising spend.

‘This is a bit of a crude measure but we are working on ways to deliver something more sensible,' says Thompson.

Metrica offers clients a ‘cost per thousand reached' figure. ‘This basically demonstrates that you can reach the same number of people for much less money than other marketing disciplines. It is a more meaningful, tangible measure to show how valuable PR is and it can also be broken down to specific audience groups,' says O'Sullivan.

Value for money?

The evaluation industry is certainly keen to find ways to prove that corporate communications delivers tangible benefits. Their services cost on average £1,000 a month and prices can be a lot higher.

Precise Media's Gault believes that the PR industry needs to be able to show not just that it is generating media coverage but that sales to consumers (or other end-customers) are increasing as a result of that coverage.

‘The advertising industry spends more than £100m a year showing the impact of advertising on the consumer. The PR industry spends nothing. That is why the PR budget is so much smaller than the marketing budget. It is the next frontier,' says Gault.

Currently, the evaluation industry is worth about £25m a year. In its favour is the growing desire of corporate communications professionals to prove their worth. Against it is the fact that evaluation costs money and money is in short supply right now.

Nonetheless, spend does seem to be growing and evaluation consultants, perhaps not surprisingly, seem optimistic.

‘We would expect the industry to double in size. Thousands of companies use media monitoring but only hundreds use media evaluation. We need to make it cost-effective but it should pay for itself,' says Thompson.

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