Communications and investor relations measurement (in the financial and investment community) is often binary. One-zero; on-off; up-down. Did stock go up? Are analysts recommending our stock? More than before?
A complex cluster of stakeholders–portfolio managers, stockbrokers, institutional investors, individual investors, and the financial media—couldn’t possibly be adequately benchmarked and tracked in simple binary terms. Ideally we should be looking not only at outputs (the how much and how good) but also outcomes (with what effect).
For example, with a hat tip to material from an Institute for PR’s Measurement Commission paper and with some additional original thinking injected:
How Much? How Good?
Outputs: are the result of the communications program. In investor relations this can include any of the following types of measures that directly represent the short-term implementation of communication activities:
- Analyst Content:
- Media Content:
a. Number of reports—a clear and objective indication of progress in courting sell-side analysts
b. Framing and content analysis of those reports
i. Top analysts, top firms, share of discussion, positioning, etc.
a. Business / financial media content measurement and analysis
i. Share of discussion, framing, positioning, share of exec quotes, executive profiling, key messages, article tone, stock reference tone
3. Socially-generated media content tracking & analysis
- Who’s talking about your organization?
- What are they saying?
- Is your message being accurately parroted / advocated?
- Are those talking about you authentic, credible, relevant?
- Is the audience engaged? How so and how much?
- How inter-related / inter-connected is this audience?
- What’s the volume and velocity of the content? Where else is it going?
- Is the nature of the content / discussion changing as it moves?
With What Effect?
Outcomes: The bottom line measurement for the investor relations executive is achieving a fair market value for the stock. However, other outcomes can also be evaluated:
- Price/Earnings ratio in comparison to peer companies – is the company selling at premium or parity relative to its peers?
- Trading volume (though this is a double edged sword. Neither very low now very high trading volume is necessarily good)
Specific corporate reputation measures such as the financial performance driver of a reputation index:
- Record profitability
- Low risk investment
- Growth prospects
- Outperforms competitors
Additional outcome measures involve survey research that can be used pre and post campaign to determine how successful investor relations efforts have been. Surveys would typically focus on securities analysts, portfolio managers, stockbrokers, individual investors and the financial media. Surveys would look at:
- Awareness of the company and/or its securities
- Specific knowledge of the company
- Knowledge of the corporate strategy and positioning
- Evaluations overall and specific to company attributes
- Currently holding or recommending stock
- Likelihood to hold or recommend stock
- Evaluation of the company on specific reputation attributes such as trustworthiness, transparency, solid management.
And while we’re going to the trouble of surveying, we might also consider quantifying the quality of the relationships we with these stakeholders. Readers of this column might remember Grunig’s Stakeholder Relationship Index that measures success in terms such as: mutual awareness, accuracy, understanding, agreement, and symbiotic behaviour by looking at six elements of a relationship along an agree-disagree scale:
- control mutuality, trust (integrity dependability, competence),
- exchange and communal value (of the relationship)
Adding the stakeholder relationship questions to the broader survey above would yield important data speaking not only to awareness and action but how the stakeholders feel about the relationship they have with the organization. It could very well be that the nature of the relationship they have has an important and direct impact on the awareness and action piece.
Alan Chumley, Director of Communications Research, Leger Marketing, is an instructor of communications research in the PR programs at Ryerson and McMaster Universities, an associate member of the CPRS measurement committee, as well as an industry speaker, conference chair, and blogger: http://alanchumley.wordpress.com