Public Relations Research and Measurement: Are CPMs a Way Forward?

The past few decades represent a mix of progress and stagnation in the field of public relations measurement, research and analysis.  While a core group of research experts and interested parties work hard to elevate the “science beneath the art,” practitioners have been slow to respond.   Given the amount of measurement-specific resources available to the profession – white-papers, research-providers, agency research departments, associations, educational programs, conferences, newsletters, blogs and more – the challenge is clearly one of “unwillingness” rather than “inability.”

More and more senior executive decision makers, however, are mandating that their organizations’ public relations programs answer the question, “Was our public relations budget spent wisely?”

Sound familiar?

It should.  In the past three years, a number of leading professional associations have taken the position that there are benefits to the industry to developing and adopting standards, and that research and measurement professionals should take the lead in developing industry-wide standards. In addition, organizations — the clients that pay the bills — have expressed support for the development of measurement standards.  Industry stakeholders include the Institute for Public Relations, ICCO, PRSA, AMEC, the Council of Public Relations Firms, and Global Alliance plus individual companies, agencies and research experts.

Recent debate/discussion among industry thought leaders

In an online discussion that took place over several weeks last year, leaders of the profession, including Jackie Matthews (General Motors), Don Bartholomew (Ketchum),  Katie Paine (KDPaine & Partners),  Don Stacks, PhD (University of Miami), Tim Marklein (w2o), Brad Rawlins, PhD (Arkansas State University), David Geddes,  PhD (Geddes Analytics), Frank Ovaitt (Institute for Public Relations), Fraser Likely (Likely Communication Strategies), Mark Weiner (PRIME Research), Pauline Draper-Watts (Edelman Berland), Angela Jeffrey (MeasurementMatch.com) and David Michaelson, PhD (Teneo Strategies) discussed the issue of CPM (cost per thousand) as a viable metric for practitioners to adopt in a more consistent way.  Despite their sometimes conflicting views on theory and practice, these leaders share a bond far stronger than their differences:  a passion for establishing a legitimate means of evaluating the impact of public relations programs through a systematic, target audience-based process of measuring the value of public relations on brands, issues, or corporate positioning.  The following has been excerpted from their online discussion.

 

 

Geddes:  Members of the Institute for Public Relations’ Measurement Commission frequently discuss and debate the premise for this discussion:  aren’t there a number of stages of effects or effectiveness to be taken into account when it comes to looking at how to measure public relations?

Likely:  In my opinion, and after decades of debate and study, I think we can all agree that we are talking about outputs and outcomes and that there are three stages that need to be considered: 

The first stage is production/distribution of effectiveness or output measurement:  Did the message we wanted to communicate get produced and distributed properly?  For example, did we survive the internal navel-gazing that occurs when initial messaging is created?   And, then, was the message conveyed via a reliable and credible communication vehicle, i.e. a blog or news release, etc.

Stage two of output measurement is whether or not the message distributed went to the right audience.  Who did we reach with our message?  Did we actually communicate to the primary target or did we get to many targets that could care less about our message or issue?  It’s a question of quality versus quantity, and which is going to be the shortest path to achieving our objectives?  This takes us to stage three, which focuses strictly on outcome measurement:  did the receiving audience demonstrate any desired behavior because of our message?  This would include changes in awareness, understanding, commitment or other types of behavior. 

Jeffrey: The vast majority of public relations practitioners do not have the budgets to link their programs to business outcomes in any reliable way outside of what they might generate through digital analysis. But even then, they are not able to generate true ROIs since those metrics really apply only to financials. Bottom line, they need some type of metric to compare their cost of running a campaign to some type of result – even if it is only at the Outputs level. Metrics like CPM are ideal as a solution to this problem. CPM is quick and easy to calculate and comparable over time. I strongly believe organizations such as the IPR Measurement Commission, the Council of PR Firms, AMEC, PRSA and other similar groups should create a variety of cost-comparison metrics for quick use by the majority of the industry. Otherwise, we are only talking to ourselves.

Geddes:  Any business that is involved with advertisement or media promotion is now being called upon by management to use metrics that evaluate what it is getting for its money when it comes to different kinds of marketing functions.  We hear the term, CPM, or cost per mille (thousand).  Is CPM a viable metric and is it becoming an acceptable basic evaluation tool that helps companies determine what they are getting for their money when it comes to different kinds of communication outreach?

Draper-Watts:  One of the key points that I am finding is that CPM is a measure understood by the marketing world and as a metric it can be used to free up public relations dollars.  But, it should not be confused with the results of those public relations activities or how effective the initiative has been.

Gilfeather:  CPM seems to be a reasonable efficiency measure and sufficiently different from Advertising Value Equivalency (AVE) as to not cause consternation and angst that we are sliding down the slippery slope of AVEs.

Geddes:  Isn’t AVE a flawed approach to evaluating the success of public relations?  Hasn’t its use always been tied to advertising dollars to demonstrate that a piece of editorial is worth X dollars of advertising?  Aren’t we beyond this approach and moving more toward measurement practices that really calculate the worth of our efforts rather than capitulating and using defective measurement practices to keep the bean counters happy?

Marklein:   It’s true; we have tried to move away from AVEs.  But not because it’s used by advertising.  We reject it because it is a fabrication and distortion of what we are trying to measure, which really renders AVEs as entirely meaningless.  Let’s focus instead on redefining the conventional wisdom for public relations … there are better solutions than ad values but we must remain committed to educating our fellow practitioners (rather than chastising them).  We can’t and shouldn’t reject other metrics “just because” they’re used by advertising. The key metrics of reach, frequency, CPM, GRPs, and TRPs are all valid and standard practice for both advertisers and publishers. Unless we want to ignore media evaluation, we can’t ignore the metrics used by other disciplines to evaluate media. But, we should apply them in appropriate ways. Measuring the earned CPM for a public relations campaign is appropriate because it’s entirely consistent with the original purpose and methods for evaluating efficiency in reaching an audience. It’s not fabrication or distortion — and it’s very meaningful for comparative evaluation of efficiency across programs, brands, agencies and marketing disciplines.

Bartholomew:  I believe CPM is a valid channel comparison metric. It is a valid but not a great metric in that it does not address true outcomes and impact, merely the cost in reaching an audience. With social media, for example, the real game is creating engagement and everything that follows, not just reaching an audience. Social has profound interactivity advantages over other channels that get masked by metrics like CPM. 

Marklein:  CPM is a valid metric for evaluating efficiency of reaching an audience with a piece of communication.  It’s not claiming to be the “value” of anything or imply “equivalency” or frame our value in the context of another discipline.  It’s simply one measure, not the end all/be all, but an important measure for evaluating “efficiency of reach” across programs, brands, agencies and marketing disciplines. 

The reality is that CPM is the lingua franca across marketing investments.  It’s fully accepted as such a measure across other marketing disciplines, an evaluating “earned CPM” does nothing that stretches the validity of that use in the way AVEs did (in both name and practice).

Weiner:  There exists an inherent conflict in equating AVEs with CPM: In the case of AVEs, the higher number is always preferred.  For CPMs, the lower number is always preferred because it measures “efficiency” (doing more for less with less) rather than “dollars earned.”  The “cost” is usually the out-of-pocket expense for tactical execution.  The “M” is the number of people reached in exchange for that cost.  Variations include “cost per positive message delivered”, “cost per placement”, and “cost per target media hit,” and more.  One advantage of the CPM and other “cost-per” metrics is that they communicate an element of ROI (costs avoided/resources retained) which resonate well with executives who may not have even a simple understanding of public relations.  What’s more, when public relations results are compared with other forms of marketing communication, public relations’ CPM is almost always a small fraction of the CPMs generated by advertising and other channels.

Likely:  In what we have been talking about, I would use the term cost-effectiveness rather than efficiency.  Cost-effectiveness compares the relative costs and outcomes (effects) of two or more courses of action or activities.  This, ultimately, can lead to finding efficiencies in a program/campaign or communications department, with efficiencies being the “time or effort well spent for the intended purpose or task.”

Bartholomew:  Since CPM is cost per 1000 ‘impressions’ as generally used, we are still not off the hook to create an industry standard for ‘impressions’. The problem with these sorts of averages is they are always wrong for any one company/program 100 percent of the time. They are a ‘one size fits none’ approach. I think it is far better for a given company to use their own historical data to develop CPM averages by channel and use these for assumptions or goal-setting. 

Rawlins:  CPM has long been used by advertising and marketing to calculate the cost of reaching audiences with “controlled messages.” Since one of the arguments against AVEs is that advertising and public relations messages aren’t comparable, I wonder if we are treading in the same water.  Obviously it is going to be much cheaper to reach large audiences with earned media, but we don’t control for content, placement or frequency.  Advertising agencies use media costs, frequencies, audience composition, etc. to calculate ideal message saturation in their media plans.  This is then used to calculate CPM and Gross Ratings Points.

Cost per message communicated is more accurate and could be used to justify costs and budgets.  But, when we start comparing our messages to advertising messages, I think we are playing a game very similar to AVEs.  So how and why are we using CPM is an important discussion.

Michaelson:  Even if we assume CPM is a valid measure of public relations activity, we are still faced with an additional and daunting challenge. Calculating CPM for advertising is a relatively straight forward calculation based on overall media expenditure. Labor and the cost of production are not included in this measure. The challenge for public relations is what do we base the cost on? Is it the cost of the program as charged by the agency? Is it the cost for a single announcement? Is client time included in this estimate? Without answering this fundamental question, CPM will have no utility.

The key benefit of CPM for advertising is being able to compare the costs of different media vehicles using and “apples-to-apples” measure. It is not designed to evaluate the outcome of an advertising program. It is only used to evaluate how to initiate a program. Public relations, by contrast, wants to use this as a post-placement or retrospective assessment. That is not the intent of CPM, nor should it be.

Weiner:  In the case of advertising, the “cost” is “out of pocket cost,” essentially for the purchase of the time or space in which the ad runs.   Agency and advertising staff time are not included.  One reason why public relations is so efficient is that our out-of-pocket costs are so extraordinarily low. 

Ovaitt: Sorry, Brad and David [Michaelson], but I don’t agree with that position at all. Just because advertising uses CPM, that doesn’t mean it has to be AVE-based. Public relations costs and public relations reach would drive the calculation.

Matthews:  I’m still not 100% convinced I’m not standing on the sidelines with Brad.  We vilify AVE but are willing to embrace CPM as valid.  I don’t see how they are different. I think we’re splitting hairs and may be seen as hypocritical.  

Weiner:  After all is said and done, the question remains:  how do public relations professionals uncover the right value system that executives will find acceptable, reasonable and measurable for public relations to deliver?

Geddes:  Public relations strategies and plans must be based on the same principles that advertising and other marketing disciplines use – business objectives.  What is the business or organizational objectives?  If that is not established first as the basis for building a public relations or earned media program, measurement is the least of your challenges.  Good planning must take into account what the business is trying to achieve.  From there, communication objectives can be established and aligned with the organizational objectives.  Research is often required to completely understand who the stakeholders are that you’d like to reach, make aware, know, perceive, understand, relate to, act upon or support.  Once this is established, and only then, should communicators move on to develop a strategy and the tactics to support that strategy.

I’ve been part of developing approaches that, broadly speaking, are based on proving ROI or the CPM for marketing communications.  The key to its success was not so much in the sharpness of the data estimates. The approach was successful because it required the participation of all internal stakeholders to sit around the table, agree on what would constitute success, make quantitative estimates, hold hands, and agree to move forward. The quantification was not complex — all spreadsheet stuff — but arriving at the final calculations required a very analytical thinking about a program. There were cases where a planned program was cancelled because everyone saw that it would never achieve the return required based on the costs. There were others where the results were very positive.

Marklein:  I’ve worked with dozens of consumer clients who use CPM as their primary way to compare marketing and communications investments. They all have CPM data for other vehicles, and my teams have used “earned CPM” as a way to assess public relations efficiency and compare to other marketing vehicles. While I have found no published data on this topic, the $10 CPM estimate is the prevailing wisdom in consumer public relations circles — and while it wasn’t derived in a precise data-driven way, I have found that it’s generally valid as a benchmark across mass-market consumer clients and programs.

Bartholomew:  CPM is a cost efficiency metric, not an impact or value metric. CPM does not assign a value to any outcome, merely details the cost associated with generating 1000 sets of audience eyeballs.

I disagree with Fraser’s assertion that it is more about effectiveness than efficiency. If effectiveness is ‘doing the right job’ and efficiency is ‘doing the job right’ — old Texas definitions — then it certainly feels more like efficiency. It compares each channels cost to create 1000 opportunities to see. Using the definitions Fraser offered, with CPM the time or effort is $ and the intended purpose is to reach 1000 sets of eyeballs.

Let’s also be accurate:  CPM is not an advertising metric, but is used in the advertising industry. CPM is equally applicable to social media and PR as it is to advertising. As many have stated, it is best used as a channel comparison metric.

 I think the use of CPM to compare channels is very different than AVE. AVE compares the cost of one channel and suggests that this cost may be assigned as a value for another channel. CPM keeps everyone at a cost comparison level.

Geddes:  In 2013, many measurement questions go unanswered as the standardization movement begins to build momentum.  While recommendations exist, the profession still struggles to quantify value and business impact despite serious efforts to do so.  One great source for more about this ongoing debate is the Institute for Public Relations website on which one can find dozens of articulate and accessible papers and case studies to help elevate the profession and our ability to generate and demonstrate a positive return on public relations investment.

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This virtual roundtable was prepared by Mark Weiner of PRIME Research.  Elements of the dialogue shown here were restructured to facilitate a better representation of the email dialogue but the comments are verbatim. 

About the Measurement Commission: The IPR Measurement Commission is composed of thought-leaders in public relations research, measurement, and evaluation drawn from four segments of the global public relations industry:  corporations, government, and non-profits; public relations agencies; research firms; and academia.  Its mission is to develop and promote standards and best practices for research and, measurement, contributing to ethical and effective public relations.

 

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One Comment

  1. CPM measures efficiency, which means nothing if a PR strategy is defective. Still, efficiency can be an excellent PR selling point when measured against other marketing mix variables. Via past research, (such as the famous AT&T study), public relations has proven to be, by far, the most cost effective marketing mix variable. Further using the ADIA model, PR offers the most effective communication vehicle when moving into new markets This can translate to market growth during economic downturns — and market domination during the subsequent recovery – for savvy business leaders taking advantage of a competitor’s decreased ad spend.

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