Planning, Research & Accountability

Andre Manning, Royal Philips

VPRA, Amsterdam, October 31, 2013

• 150 communications professionals around the globe

• 25 communications professionals at HQ Amsterdam

• Supported by one agency across the globe

• This is excluding marketing communications

People don’t

care what

you say

about your

company. 10

Rupert Murdoch, CEO, News Corp.

“Now it’s the people

who are taking

control.”

11

Everything Move Faster in Digital Economy

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Critical success factors

Barcelona 2010 Principles http://www.instituteforpr.org/2010/06/the-barcelona-declaration-of-research-principles/

1. Importance of Goal Setting and

Measurement :

2. Measuring the Effect on Outcomes is

Preferred to Measuring Outputs

3. The Effect on Business Results Can and

Should Be Measured Where Possible

4. Media Measurement Requires Quantity

and Quality

5. AVEs are not the Value of Public

Relations

6. Social Media Can and Should be

Measured

7. Transparency and Replicability are

Paramount to Sound Measurement

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Barcelona Principles and Philips

• We set goals before we measure, before programs launch

– AVEs are not used, Neither are multipliers

• Impressions and clip counts are meaningless numbers on

their own

• Our objective is to show business results from PR

• Social media is treated as simply another channel, not a

strategy unto itself

• Everything we do is transparent and can be done over

again the same way

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MEASUREMENT AT PHILIPS

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Measurement at Philips

• Communications measurement has never been more important

to demonstrate the success of communications work.

• When I first arrived at my new role I saw putting in place a

comprehensive PR measurement system at Philips as critical.

• At Philips we hold ourselves to a consistent standard through

NPS scores and Key Performance Indicators (KPIs).

• Consistent Measurement is part of the 21st century toolkit of the

communications professional.

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AUGUST 2013: OVERVIEW August ’13 July ‘13 Monthly Net Change (+/-)

Total # of articles 276 498 -222

Total # of impressions 274,901,000 513,121,000 -238,220,000

Overall Quality (AMS) (from

-100 to 100) 54.9 69.3 -14.4

Net Promoter Score (NPS)* 7.7 8.5 -0.8

Message Penetration

(% with 2+ messages) 42% 57% -15%

% Positive tone 68% 75% -7%

*NPS is the conversion of overall quality (AMS) to a Promoter Score.

N/A means no data was available for the month.

Brand License refers to coverage related to Philips’ brand licensees. 19

Example Algorithm & NPS

• Algorithm scores ranged from

-70 to 100, the majority of

which passive or promoter

articles.

• Conversion to NPS would

yield an average score of

“7.7,” on a 0 to 10 scale.

• Benelux yielded the highest

volume of coverage in Q4 by far,

with a strong AMS.

• APAC and North America had the

best quality of coverage, higher

than the quarterly average.

AMS by Top Markets

365

172 133 123 112

49,3

64,2

53,6 46,2

52,6

0

20

40

60

80

0

150

300

450

600

Alg

ori

thm

Sc

ore

Vo

lum

e

Volume Algorithm Score

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Methodology – A1

• OneVoice uses a proprietary quality scoring system known as the “algorithm.” Points are assigned based on the attributes of the story:

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Methodology – A1

* See slide 65 for Strategic Messages for Evaluation

*

22

Methodology – A1

*

23

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Strategic Messages for Evaluation – A2

Inclusion of Messages: (+25 points maximum)

The following are the strategic messages – 10 points for each message included:

• Health & Well-Being – Philips wants to become the leading company in Health and well-being. Philips is a global

company of leading businesses creating value through meaningful innovations that improve people’s health and well-

being

• Customer-Loyalty – Philips is a people-centric company that organizes around customers and markets to give people

what they want and need

• Brand Value – Philips invests in a strong brand and consistently delivers on their brand promise of “sense and

simplicity”, in their actions, products and services

• Innovative – Philips delivers meaningful innovations by investing in world class strengths in end-user insights,

technology, design and superior supplier networks

• Employee-focused – Philips develops their people’s leadership, talent and engagement and strives to perform

according to high performance benchmarks

• Global leadership – Philips continues to invest in high growth and profitable businesses and emerging geographies to

increase revenue derived from market leadership positions

• Responsible & Sustainable – Philips is committed to sustainability and focus on making the difference in efficient

energy use

• Financial Strength – Philips is a company that it is financially strong, with a solid balance sheet and an increasing

ability to generate solid levels of profitability

• Long-Term Strategy/Value – Philips has a solid, sensible long-term strategy which over time will lead to growth, higher

profits and better shareholder returns and therefore represents a smart long-term investment

Messaging based directly from Philips Vision 2010 Strategy, KGRN Brandbuilder and Fortune’s Most Admired Companies. Coverage

does not have to contain exact message to be scored for that message – loose interpretations apply.

Multimedia news release Twitter channels YouTube videos Flickr collections Vine video

+ infographic

@PhilipsNL

@PhilipsPR

@PhilipsLight 25

Rijksmuseum Strategy & Activation

Strategy:

Highlight the Philips and Rijksmuseum partnership and showcase

Philips leadership and expertise in LED lighting solutions

- Local to Global

(Lead) NL- consumer focused, locally relevant news

Group- high level, international news

- Campaign approach

- Pre-During-Post editorial calendar

- Live tweeting on location

- High quality visual assets disseminated across channels

Activation:

2013 Group Management Commitment

…and progressing on our strategic priorities • Build Healthcare, Lighting, and Consumer Lifestyle to global leadership performance

• Turn around underperformers

• Improve our competitive position in China and other growth markets

• Drive growth and enhance our portfolio through innovation leadership

• Transform Philips into a “digital” company

• Invest in building new growth opportunities

Accelerate our growth and improve our performance… • Meet 2013 objectives: 4-6% growth, 10-12% EBITA,12-14% ROIC

• Increase brand preference by 3% and market shares by 0.3 points

• Meet our EcoVision sustainability targets and improve the lives of 1.8 billion people in 2013

2

3

1 …by executing the Accelerate! transformation… • Adopt a growth and performance culture that enables our people to take ownership and excel

• Embrace customer centricity across the value chain to win in local markets

• Execute BMC growth plans that are resourced-to-win, in direct partnership between Businesses

and Markets

• Drive speed, simplification and excellence through End2End customer value chains

• Embed the Philips Business System in our systems, processes, and organization; reduce

complexity costs by €900M by end of 2013

Final approval Supervisory Board on 5 December

GM&C Commitments 2013 … building, protecting and promoting the Brand

…by executing the Accelerate! transformation… 1. Drive a growth and performance culture within GM&C that engages our

talent and enables everyone to take ownership and excel

2. Increase the accountability and effectiveness of our integrated brand & communications network and demonstrate our added value to businesses and markets

……and progressing on our strategic priorities 1. Develop and deploy an effective integrated communication strategy to

build Philips’ Innovation leadership position

2. Drive Philips to embrace digital communications, including capability building, development and deployment of an integrated digital communication strategy

Accelerate our growth and improve our performance… 1. Launch the Brand in an inspiring and effective way to our employees,

consumers, customers, key opinion leaders and communities in relevant channels with the ultimate objective of driving Brand Preference

2. Embed the new brand in the organization with impact, driving change management and ensuring the brand is at the heart of everything we do

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3

1

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