Proving the link between investment in corporate communications and business outcomes has always been hard. But it is getting easier.
Especially in times of economic uncertainty, the value of communications is often overlooked, or viewed as expendable, and tying comms activities to KPIs has never been easy. Advertising value equivalency (AVE) is often viewed as outdated, and finding other ways to quantify business impact has always been a challenge.
Continuing to articulate value and advocate for sustained investment in communication activities can be even more difficult when organizations begin to look for ways to reduce costs, not increase them.
As Edelman put it in its 2021 Future of Corporate Communications report: "At no time in history have business leaders been forced to confront such complexity [and] to meet the challenge of this moment, the corporate comms function must advance from operating as a transactional cost center...to being an indispensable partner generating measurable business value."
Comms' Place Within the Organization
The task of effectively conveying the value of comms remains the biggest hurdle for the chief communications officer (CCO) to overcome: 61% of CCOs cite the "inability to measure impact effectively" as their top challenge, according to the 2023 Global Comms Report from PRWeek and Cision.
Comms' professionals ability to overcome that challenge can make or break the relationship between them and company leadership.
The conventional belief has been that marketing runs customer-facing campaigns that directly impact short-term sales, whereas corporate comms activities aim to influence stakeholders in various ways, offering long-term gains.
Supportive behavior from policymakers, journalists, and other stakeholders is hard to quantify in traditional ways; moreover, improved perceptions and behavior toward a company typically relate to the company itself rather than to its products. Translation: a better reputation doesn't necessarily translate into sales. That is most likely the main explanation for the gap in leadership's assessment of the value of comms.
Another contributing factor CCOs face is a lack of data analytics skills in comms departments. Defining comms impact and drawing a line from comms activities to the impact on a business require monitoring, analyzing, and understanding data. When that line isn't well defined—as noted above—the analysis may require more unique data and the skill sets necessary to interpret it. According to reports by the Page Society and the European Communication Monitor, those skills are missing.
The Emergence of New Tools and Ideas
Today, comms departments have tools at their disposal that can help inform leadership of their value.
Tracking and collaboration platforms that harness stakeholder insights can help Comms identify and quantify the value of comms in any economic climate. Indeed, as the Page Society puts it: "CCOs are beginning to develop commstech, making their enterprises more agile, digital, and data- and analytics-driven."
If teams are to realize their full potential, they must adopt new tools and platforms—and overhaul not only processes but also organizational structures. And as the corporate comms function becomes more data-driven, its ability to optimize activities and prove its business impact will become clearer to organizational leaders.
At the same time, showing real value is about better defining the business impact that Communications makes.
Undoubtedly, a direct impact on sales is the ultimate measurement of commercial value, but that is difficult to achieve. Fortunately, though, in today's stakeholder-driven world, companies are embracing nontraditional forms of value. Short-term and financially driven value is still a core KPI, but more and more businesses are factoring in long-term and stakeholder impact.
That means business impact can come in the form of a company's ESG ranking or in its ability to better attract and retain talent.
Those types of improvements not only earn more clout with leadership but also benefit the company's bottom line by reducing transaction costs and increasing stakeholder loyalty and advocacy.
The Rise of Data-Savviness
How, then, might a forward-thinking company demonstrate that much-desired stakeholder impact? And how might its CCO most effectively convey the value of the comms department in delivering that impact?
In short: by using commstech tools such as data-driven solutions that allow them to track what stakeholders think in real time—allowing them to identify the impact of their own activities and external events on stakeholders perceptions, in both the short- and long term.
Such research platforms that continuously track opinions of relevant stakeholders did not exist several years ago. But recent technology has allowed the automation and acceleration of that research process at reduced cost.
Better yet, these innovative solutions can now be easily integrated with other data streams—such as social listening, content management, and media monitoring services—in consolidated dashboards. That means companies can optimize their activities to ensure maximum impact, respond rapidly to macro events, and proactively mitigate any risks.
And the clincher? Tracking stakeholders in real time gives companies—and their CCOs, in particular—a much clearer view of the value of their work. Which makes it much more likely that the company will allocate budgets effectively and invest in what has the greatest impact.
Many companies are already making headway in this long-fought battle:
- Audi uses a host of real-time KPIs to steer communications to remain agile and build a data-driven culture into the organization's global communications function.
- Siemens Healthineers has developed a state-of-the-art consolidated business intelligence dashboard that connects many data sources to show a real-time picture of the company's communication activities and their impact.
- Coca-Cola takes a uniquely strategic approach to connect the dots, implementing continuous measurements that go through all the stages of communications—from objectives to impact.
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Amid new changes to their functions, and perceived threats such as generative AI, many communicators may be anxious about their future. They should rejoice instead—and focus on transforming into a data-savvy machine by upskilling and recruiting talent, adopting new tools, and identifying a clear strategy to make their work more demonstrably impactful.
Articulating and demonstrating value has long been a pipe dream for comms professionals. But the realization of that dream is seemingly more attainable than ever before—and may result in corporate comms' finally being viewed as the invaluable asset it is.
More Resources on Proving PR and Communications Value
It's Time the Communications Department Is Seen as a Revenue Generator
The Challenge of Proving the Value of Public Relations Today
Talk to Me: 10 Tips for Translating PR Results Into the Language of Business
