Theory in practice
For more than fifty years, PR has relied on communication research methods to gauge news impacts and the economic value of PR.
It has not worked. For more than fifty years. Hold on. Fifty years? What’s that saying about the definition of insanity?
So instead of trying over and over again to impute both consumer reach and brand reputation from the same flawed volume and tonality data, what if we came at this from another direction?
What if communication adopted business research methods to gauge news impacts on things like sales, margins and market share? And instead of trying to demonstrate PR success, what if the focus shifted to isolating signals from the noise and managing news-driven impacts on major companies and national brands?
Let’s cut to the chase. By adapting business research methods, we can elevate communication research from the art of media measurement …
… to the pseudo-science of demonstrating marketing success …
… to a level of communication science that provides actionable, forward-facing insights informing both communication tactics and business strategy.
Practically speaking
At its core, communications is about pushing messages out to various audiences. We might communicate directly, like I am doing right now in writing this blog that you are reading. Or we might issue a press release to the news media. Post content on a company website. Publish a company announcement internally. Those are basic communication functions. Functional communication.
Media monitoring for decades has boxed communication into a framework of unreliable data, imputed effects and strained derivatives that — from a business perspective — risked marginalizing the profession. I asked a media monitoring expert on a webinar at one point whether his firm was really confident in metrics imputing tens of millions of dollars in ad-value equivalence. “Well,” this expert chuckled, “you probably would not want to show this to your executives.”
Social media listening is simply media monitoring that’s been digitized, and artificial intelligence is media monitoring and social listening freed from the constraints of Boolean search.
Functional research, meanwhile, can never align to sales, margins or market share, but it can be used to gauge efficiencies and benchmark media footprints against competitors. Corporate communications can rarely say no when an executive asks for a press release about a product tweak or new hire that has no chance whatsoever of making the news. Unless you can show them ahead of time that a significant portion of the comms budget is being wasted on ghosted press releases.
OK, maybe you are enamored with your media monitoring and social listening capabilities. You have spent years perfecting a Boolean search string that is longer than a typical news story. You are never challenged about the accuracy of the metrics. Why change?
Here’s one final test to consider. Would your media monitoring assumptions pass the corporate board’s sniff test or a formal audit screen? If a corporate director or audit executive came in tomorrow and asked to see under the hood, could you confidently claim that news about your company reached hundreds of millions, or even billions of people. That customer reactions to that news were reliably and accurately projected by a natural language processor assessing the tonality of words? That the imputed AVE or ROI was calculated correctly, and reflected actual economic value on the company’s balance sheet? Unlikely.
Elevating communication
So how can we elevate business communication from something of a dark art toward a nascent social science? Communication does not begin and end when we push out a press release and track corresponding news coverage. There is still an audience to think about. To be effective, our communications need to reach our intended audiences. We need to optimize actual reach and resonance of news with stakeholders, mainly customers. Tactical Communication.
Tactical communication research starts with message testing. Message testing is the bridge that enables communicators to cross over from functional to tactical — from order takers to order makers. We were taught about message testing in school, but for most large companies covered in the news, message testing is either missing or an after-thought. Message testing should be a baseline tactical research tool.
For example, how do we think people actually react to that trite line about putting customers first 100% of the time in everything we say and do? You might want to start by testing that one before trotting it out again.
Tactical communication lives in the space where corporate messages morph into media and consumer narratives. Message pull-through, a common PR metric, fails to account for how messages morph into consumer narratives. And it’s the narratives that reflect brand perceptions.
The third dimension of business communication encompasses organizational outcomes. Ultimately, how do news-driven shifts in customer perceptions impact key performance goals — sales, market share, earnings, stock price. Strategic Communication.
We live in a multivariate world, and that’s where communication science starts. We can get our feet wet by feeding news-centric data into market mix models, but in order to become truly strategic we need to integrate news as an independent variable in business analytics.
To do this, we will need consumer-based, time-series data representing news as an independent variable impacting key business dependent variables. As it stands, news will remain a meaningful confounding variable in business modeling for companies that cannot generate reliable, validated time-series data representing news-driven perceptions.
Why bother? I hear that question a lot. And the answer is tail risk. For major companies and national brands, there is admittedly a low probability that breaking news will trigger a shock that impacts sales, earnings, market share and, by extension, stock price.
So what’s the risk? When they are triggered, news-driven shocks routinely impact sales by 20–50% before bottoming out. And the headwinds can last for months, sometimes years. Companies that only have functional media monitoring in place when they experience a shock really only have two options for managing the fallout. They will either need to rely on gut instinct or the conventional wisdom of a crisis consultant.
Neither should be trusted when hundreds of millions — and, at times, billions — of dollars in economic value are at stake.
That’s why risk frameworks and predictive analytics sit at the top of the communication science hierarchy. Market mix modeling outcomes have been fairly consistent. News and ads typically contribute a low-single-digit percentage of lift to sales — about 2–5% — for large brands that advertise and are covered in the news.
Again, by comparison, news-driven shocks routinely trigger shifts in sales that are exponentially larger, with lasting erosion of market share. In the shock equation, news is a catalyst. In order to monitor, measure and potentially mitigate financially material impacts of breaking news, risk frameworks need to be in place to identify triggers and forecast the depth and duration of media firestorms.
That’s next.
If you work with national brands that are covered by the press, and want to dive deeper into communication science, let’s connect.
Jim.Pierpoint@HeadlineRisk.com
