I recently came across this post from Nokia’s Arto  Joensuu titled Conversations are the New Conversion. In the accompanying SlideShare presentation, he makes the case that the traditional sales funnel is no longer linear and controllable. Consumers are now are in control and make their own journey through the “inverted funnel.” This puts new demands on marketers, as the traditional one-way forms of communication increasingly struggle to attract consumer attention. Arto’s presentation says that they have found that ~30% of engagements are generated from paid media, while the rest is generated through owned and earned media. This is why he argues that Social Media Optimization combined with SEO is critical. I couldn’t agree more. Whether you call it Social Media Optimization or Earned Media Optimization (which is the phrase we prefer), the basic message is the same: if you think that the media you own and the one you pay for is all you need to leverage in your marketing campaigns, then you’re missing a massive opportunity.

So what exactly is earned media? Earned media happens any time a brand or a product is mentioned or discussed in a place outside of a brand’s direct control. It can be anything from a positive review in the New York Times, to your best friend sending you a note via Facebook to check out this cool new product. Essentially, earned media is any media generated that you didn’t pay for directly, and if it is an endorsement or a recommendation by someone trusted, it can make all the difference. Conversely, one single bad review can be the ultimate deterrent, and ruin all well-laid marketing plans.

Now, it is important to note that while earned media occurs outside of a brand’s direct control, it does not mean that a brand cannot influence the process, or be part of the conversation. For one thing, PR has been – and still is – a proven tool for influencing influencers. And influence still matters today, even if the field of influence has fragmented and mutated into something many communicators are grappling with understanding. But crucially, it puts the onus on marketers and communicators to really understand not only what their target customers and their spheres of influence really care about, but how and where they talk about it. Because if you cannot communicate your message in a way that resonates with your intended target, they can skip it in an easy click.

And that is why the word “earned” is very apt. In an attention-deficit economy, it is harder and harder to earn the interest, attention, engagement, and ultimately, the trust of your customer. Therefore we think that it is critical for marketers to understand and optimize the impact earned media has on their brands. As Peter Drucker famously said, “if you cannot measure it, you cannot control it.” But understanding and optimizing earned media goes far beyond just measurement. As SEO and SEM pros will tell you, optimization means integrating analytics deeply into your planning process (and that planning process has to be actively managed and revisited). And it means going beyond “out-of-the-box” data. Data only becomes truly valuable when you apply the business context to it that makes it actionable to decision-makers. We’ll be posting more on Earned Media Optimization over the next few months, so stay tuned.

Republished From Institute For Public Relations Conversations Digest

“What do web analytics have to do with public relations?” It’s a good question, given that web analytics are most often used by SEO professionals and online marketers to track visitors and sales from search results and content advertisements.

The digitization of communications has enabled marketers to better understand the impact of their campaigns by directly measuring audience behavior. This is critical to companies that spend large sums on buying media placements or to optimize their website, as it has enabled them to understand what works and what doesn’t in dollar terms. There is no reason why the same methodologies cannot be applied to the media that a company “earns,” which is the media attention a company can generate through effective public relations and communications, or the “buzz” a product can generate online.

In fact, we would argue that earned media is actually a very powerful marketing channel that can be measured, understood and optimized on the same terms as paid media and search marketing. The number of unique visitors referred to an organization’s website by earned media, the pages that visitors access, and whether or not they completed some goal (e.g., downloaded a white paper, made a purchase, made a donation, etc.) can be directly tracked in a way that has not been possible before—at least not without extensive primary research.

In the new paper published by the Institute’s Commission on Public Relations Measurement and Evaluation, we outline practical steps for public relations practitioners who want to adopt web analytics as part of their media measurement strategy. The paper focuses on what sort of data public relations professionals can obtain from web analytics, how to conduct basic quality control for the data, and how to integrate the data with other media monitoring and research.

The paper addresses how web analytics can be used to answer broad questions such as:

• How do sale conversion rates from earned media compare to online marketing channels?
• Is our corporate Twitter account driving traffic to the right Web pages?
• Are our press releases or social media releases being cited by journalists and bloggers, and if so, do they drive traffic to our corporate site?
• Is “Key Message A” more effective at driving sales than “Key Message B?”
• Should we invest more resources in social or traditional media?
• Where do we find the audiences most likely to respond to our campaigns?

At first glance, answers to these questions might appear out of reach. Fortunately, web analytics are more accessible and cost-effective than ever. This technology is not necessarily expensive (its free if you’re using Google Analytics) and most large organizations have a web analytics team that can help public relations teams get the data and reports they need to inform communication strategy.

Since web analytics technology has some technical limitations and most organizations sell products and generate sales leads through offline channels, web analytics might not be the “holy grail” ROI measurement system that the public relations industry has been waiting for. That being said, it might be the closest thing yet.

In much the same way that online advertising has revolutionized how advertisers can measure and optimize their efforts, public relations can leverage web analytics techniques to measure actual user behavior and optimize campaigns to get the best outcomes.

Go here to download the white paper or click the link below to got to the Institute for Public Relations website to read more.

Using Web Analytics to Measure the Impact of Earned Online Media on Business Outcomes: A Methodological Approach

If your reaction to the headline was, “what on earth does Web analytics have to do with my job?” you probably weren’t alone. Web analytics might be thought of as the realm of SEO pros and online marketing teams, but it can be an incredibly valuable tool for PR teams too. In fact, Web analytics can give you insight into the value of PR and the types of business outcomes it helps drive in a way that hasn’t been possible without expensive primary research. In much the same way, online advertising has revolutionized how advertisers can measure and optimize outcomes, PR can leverage exactly the same tools and techniques. As communications becomes increasingly more digital, it also becomes increasingly important to measure actual user behavior and optimize campaigns to get the best outcomes.

Here are some examples of questions that Web analytics can help you answer:

• Is our corporate Twitter account driving traffic to the right Web pages?
• Are our press releases or social media releases being cited by journalists and bloggers, and if so, do they drive traffic to our corporate site?
• Is Key Message A more effective at driving sales than Key Message B?
• Should we invest more resources in social or traditional media?
• Where do we find the audiences most likely to respond to our campaigns?

While some of these questions require advanced analysis and statistics, there are many straightforward questions you can ask your internal Web analytics team for data on:

• For starters, get some data on what unpaid sites drive the most traffic to your Web site. Unpaid traffic includes any Web sites that provide a link to you for which you have not paid (i.e., not ads or paid search). Many of these sites are influential publications that publish content about your brand, so you should know who is most effective at driving awareness and demand.
• Next, ask questions about what the traffic that these sites refer looks like. Do they tend to sign up for information or buy things on the Web site (or to put in Web analytics speak: “how well do they convert?”). Where are they located geographically? What keywords did they use to find the information, if any (this is great input into determining how you should write copy about your company)?
• Then you may want to do some benchmarking. How does earned media compare to paid media? How does Twitter compare to blogs?

Your internal Web analytics team should be able to provide you some of these reports out of the system or provide you or your analyst of choice access to the application. You can also talk to your agency or research vendor who can help answer your questions on how to get started. We frequently get asked by clients to do this and also help answer complex questions such as: what messaging results in more sales? Where are the untapped audiences with the most potential? Which audience segments should you target with various messages to get optimal business outcomes? There are many ways you can use the data to give you campaign insights, and if you combine it with other data sources, the possibilities are vast.

For more information on the subject of how to get started using Web analytics for PR, you can download our white paper on the subject (published by IPR), or you can also take a look at this presentation, which Context Analytics’ Seth Duncan gave at IPR’s Measurement Summit.

Many PR measurement practitioners have the skills and tools to do this sort of research, although relatively few companies are taking advantage of it. A couple of days ago,  Eric Peterson, of Web Analytics Demystified, and SAS  released a white paper outlining some predictions about the future of using web analytics to drive business intelligence (see Eric Peterson’s blog post about the paper here).  I think the paper hits the nail on the head as to why PR (or marketing in general) isn’t using web analytics to its fullest:

“The use of advanced digital analytics tools [e.g., SAS] is, for the most part, a back-room affair performed by data junkies and “Super-Quants” that have made the leap from ‘data for data’s sake’ to ‘data for the business’s sake.’ Third-generation analytics tools are not always pretty. They don’t necessarily provide the same “Ooohhhh” factor that applications like Google Analytics and Omniture SiteCatalyst have used to convert legions of users. It turns out, however, that ‘pretty’ is over-rated, especially when compared to ‘powerful’ and ‘flexible.’”

I think that anybody who has ever used SAS (or R or SPSS or any other piece of serious statistical software) would agree that it’s not particularly pretty, and it literally takes a mathematician to get it to produce useful results. But it’s necessary for moving communications research to the next level. As it stands, most monthly or quarterly media research dashboards show a snapshot of what happened in the past– whether in the form of coverage volume, impressions, AVE, sentiment, etc. The same thing goes for the out-of-the-box reports from Google Analytics or Omniture– they show what media channels drove traffic and engagement at your website. But combining those two types of reports and understanding what types of coverage is likely to help your business reach its future goals requires advanced analytics that don’t always produce the “Ooohhhh” factor of a real-time online dashboard (at least not at first glance).

Ad-hoc and out-of-the-box reports are very useful to show how well campaigns are performing, but there is an opportunity to take this much further. Peterson’s white paper contains a figure from Competing on Analytics: The New Science of Winning (Davenport and Harris, 2007) that does a nice job showing exactly how much further digital analytics can go. The reports and research/business intelligence questions below the dotted line show the current state of web analytics, while the “true analytics capabilities” of the future are above the dotted line:

While the figure wasn’t created with PR in mind, I think it’s fairly safe to say that the vast majority of corporate communications teams are (at best) only doing the stuff on the bottom of the figure and that predictive statistical models at the top seem pretty exotic. That being said, I’m starting to see companies adopt this forward-thinking approach to digital PR measurement. These companies seem to understand that investing in research that involves relatively complicated, sometimes un-pretty, statistical analysis can deliver insight that, several years ago, seemed unimaginable to most PR professionals (being able to figure out exactly what key messages targeted at which demographics produce the most sales, for example). I think that, as the success of these companies becomes more apparent, the “digital analytics revolution” will spread through the PR world pretty quickly.

This is an especially timely study for the PR industry. I’ve seen quite a few indications that PR professionals are waiting for a magical piece of software that will integrate web analytics, social/online media metrics and produce real-time analysis that will help demonstrate both ROI and help optimize future campaigns. This is one area where PR could learn a few lessons from their digital marketing peers who invest a good deal of budget on analysts and database managers to tie together web analytics, demographic, psychographic and ad placement data flexibly to show which ads and placements are most and least effective. My hope is that PR professionals will become similarly inclined to roll their sleeves up, mine these rich sources of data and uncover the sort of marketing strategy and ROI gems that online advertisers have had access to for years.

Although it’s not explicit in the Forrester and Google report, there’s a also lot of budget to be saved when you rely on analysts to interpret web analytics data. Developing software to seamlessly integrate web analytics and social/online media data is incredibly time consuming and expensive (and, most likely, not incredibly flexible). Any analyst with basic knowledge of SQL or how to merge datasets in SPSS or SAS should be able to accomplish this sort of integration in a few hours. That’s probably going to cost a lot less than developing or purchasing an enterprise software solution.

Software is fantastic for storing large sets of data, writing statistical algorithms for testing hypotheses, and visualizing the results. But, when it comes to deriving actionable conclusions and novel insights based on that data, you’re going to need a good analyst.

A recent study published in Booz Allen’s Strategy+Business, point to some of the same reasons  that we have found in our research for this effect, and include much that is relevant to communications professionals. The study, authored by Young & Rubicam’s John Gerzema and Ed Lebar, and titled “The Trouble with Brands,” presents data that makes the case that brands have been losing power over time, with the exception of a handful of brands whose values are afforded a premium and financially outperform their peers. This is based on intangibles the study’s authors call “energized differentiation,” but really boil down to having an emotional connection with customers (i.e., emotional loyalty), in that the brands speak to their customers (relevance) and have a unique meaning to their customers (differentiation). Further, these brands “add up to a more exciting, dynamic, and creative experience” to use the authors’ words. These brands have built valuable equity with both customers and prospective customers, creating intangible value. Apple is probably the most obvious example of such a brand at the moment, but since we do a substantial amount of work in the technology industry,they are an inescapable example. Apple has emerged as one of the more revered brands of recent times, and in our research the brand continually elicits a share of voice and sentiment that is completely out of proportion to its share of the markets in which it competes, be it PCs, laptops, mobile phones or consumer electronic devices. If you also look at market capitalization and valuation ratios, the company is afforded a rich premium by investors (PEG ratio of 1.5 and P/S ratio of 4.15 at this moment). Customers are also willing to pay a premium (Apple has a market share of 91% for all PCs priced over $1,000 – which shows clear dominance of the premium segment). And the media loves to write about Apple. Much of that is explainable by rational factors: investors like the margins and growth rates, and customers like the innovative products and product design. But, there is an emotional connection that causes both investors and customers to be willing to pay a premium and sustains the momentum. This premium is due to the company’s ability to excite the public, the fact that the products delight the customers, and the fact that a leader like Steve Jobs can captivate journalists to the point of worship.

PC/Notebook Market: Share of Voice Vs. Market Share

While these intangibles may seem very wooly, they are in fact very measurable. As an example, in the 90s I worked on building a customer satisfaction and loyalty program for a large software company who had a dominant position in one market and wanted to extend it to another – and they needed to understand how well loyalty would extend to this market that was relatively new to them. One of the key findings from our research – based on interviewing senior-level executives at the 2000 largest companies in the world – was that our client had two types of loyal customers: those who bought because they either had no choice or logic dictated it (e.g., because of issues such as compatibility, cost, or corporate policy), or those who not only stayed loyal because of the facts, but also showed a high level of emotional involvement in the purchase. They were more likely to recommend the brand (something Net Promoter has since exploited in its simple brand advocacy model), but they also exhibited other perceptions that indicated that there was an emotional connection that shouldn’t necessarily be part of a rational purchasing decision process. In understanding these perceptions lay the key to  a successful marketing strategy.

Ultimately, in our current environment where trust is easily lost and brand value is eroding, it is more important than ever for a brand to understand the strenght of the emotional bond with their customers, and to use that knowledge to better manage their brand. And if you think about it, much of what goes into creating that bond boils down to good PR strategy: design and communicate a clear vision of the brand that is distinct, is authentic, resonates and engages its audience (aka the DARE methodology employed by Text 100). Further, the leadership of a brand is key to communicating this vision, and marketing must back this up by sticking to the same message and effectively engaging the brand’s audience. Great brands don’t create value by accident – they do it through deliberate planning, thorough research and flawless execution. So if you do not have a clear strategy on how you will excite your market, then ultimately, your brand value will suffer. And of course, if you do not measure, you won’t know.

But the question is what the direction of the causality is – or to put it in the plain words of TechCrunch: “I really doubt that their level of social media engagement had anything to do with their revenue growth, it is just that the strongest brands are the most engaged.” This is not to say that successful social media marketing strategies can’t add value to a brand. To the contrary, the report could have simply stated that successful companies are more likely to be engaged in social media, and that laggards ought to try to catch up to keep up with successful brands.

Here are some of the key findings:

• Overall, we found that how often a company appeared in the press accounted for over a quarter of the brand value among Interbrand’s 100 most valuable brands.

• The relationship between media prominence and brand value depends on “product involvement” – i.e., the degree to which customers research a given product or solution prior to purchase. Media prominence was more associated with brand value for “high involvement” products compared to “low involvement” products. Media prominence was a particularly important component of brand value for computer-related industries, such as software and hardware manufacturers, as well as computer and Internet service companies, accounting for 48 percent of differences between companies’ brand values.
• Advertising expenditures, however, predicted brand value only for “low involvement” products, and accounted for very little brand value among “high involvement” products.
• These results suggest that the more complex a product is to a buyer, the more likely they are to research the product category and to look for information that they can trust. Much has been said of the increasing power of word-of-mouth and distrust in advertising in the past few years. If unpaid media placement, as opposed to paid media (or advertising), is more credible to buyers, then it too should play a key role in building brand value for high involvement brands.

Perhaps the most important take away message from this study is that, regardless of the direction of causation, a sizable amount of brand value, particularly for high involvement industries, is tied into media coverage.  So, even if one interprets this study as showing that high brand value leads to more media coverage, it is still important for media coverage to be carefully managed since it is the window through which others will see your brand.

We used web analytics data (such as # of monthly visitors) and combined that with data on product-related coverage we already analyze for the client on a quarterly basis. We repeated this process for each of their competitors, and found the following:

• Our client was the only company amongst the competitive set to have a significant relationship between media volume and web visits. This meant that they were the most successful in using communications to drive traffic. Part of the explanation for this was the fact that the client obtained better quality press – our metrics showed higher message penetration and better tonality for key product attributes than the competition.

• 1 product-focused article in the media resulted in approximately 10,000 visits to the website. In other words, there was a tangible ROI to their efforts.

We were also able to provide insight into their SEO and search term strategy, that could be implemented in future messaging strategy for the client.

This case study is a good illustration of the fact that PR and Communication investments can be measured by not only how much press coverage was earned, but also in how the investments ultimately contribute to business outcome metrics across the organization.