Public Relations And The Myth Of ROI
A client just emailed me the kiss of death, writing (no guts to call): “We've given PR a year and we're simply not seeing the ROI.” Undoubtedly it’s my fault for not adequately managing their expectations, but when clients expect a straight line from media coverage to their bottom line, there’s a problematic disconnect.
PR has always resisted ROI metrics, even in this day of big data. That’s because public relations is about enhancing company/product/executive awareness and promoting a positive reputation. How does one measure buzz in a bottle?
In my several decades managing campaigns for marketing services companies, I’ve learned that thought leadership media coverage does not equate directly to ROI -- making the cash machine ring. To borrow a phrase from Joni Mitchell’s “Big Yellow Taxi”:
“Don’t it always seem to go
That you don’t know what you’ve got
Till it’s gone.”
The "measure" most widely used to determine PR success has long been the number, frequency, and breadth of media coverage (clippings -- electronic, print). But PR cannot be accurately gauged by clip volume alone, although a grand start. Strategically positioning a company as a leader is often a key PR goal.
Let’s say that after a year’s effort, your client has won several industry awards (based on product quality), earned glowing reviews (editors’ decision -- you brought it to their attention), secured a column in a leading publication (your work), been invited to speak at conferences (PR, again), and received xxx column inches (PR) in articles featuring you and two or three leading competitors.
No mathematical formula
Considering these elements to be of value to the brand, still no mathematical formula exists to connect PR directly with short- and longer-term business impact. Truth is, the ROI of PR is very different from that of advertising, but no less valuable.
Let’s look at what effective PR does offer. PR is a powerful marketing tool that provides distinct benefits, which clients must then “bake” into their marketing/sales programs. Even so, it’s important to determine what can -- and can’t -- be quantified, or how to assess intangible and tangible ROI in demonstrating the value of PR.
Whether your company is quoted, profiled, or has bylined columns published, the media endorsement is of great -- but indeterminate -- value. I will not put a dollar sign against a bylined two-page spread in the summer issue of Innovation magazine (check their ad rates if you require a dollars-to-value conversion) that details one of a client's most profitable innovation services. Or the resigning client, which was quoted in June as the "industry expert" in USA Today and the Los Angeles Times, among a great deal of "lesser" media coverage, which means their media exposure pre-empted that of their competitors (how to value that?).
Publicity as marketing fodder
Now that these clients have published stories in hand, do they put this material to work in their marketing and sales efforts (beyond posting them to the company Web site)? Too few clients understand the long-term value of integrating publicity with marketing -- i.e., outbound emails, "old-fashioned" mail campaigns, social media, new business presentations, trade shows, and speech distribution.
Now that we have some idea as to what publicity offers, and how to capitalize on it, let’s review the impact that PR delivers.
Basically, there are two types: PR that prompts direct actions and PR that affects change in audience perceptions. The first can be measured in the short term; the second can only be gauged over the long haul.
How many calls, e-mails, and Web visits resulted from a specific PR initiative? How your sales team handles these incoming communications is a separate topic, not to be equated with PR.
What is the impact on company reputation, brand equity, and leadership position? This takes time and is about building momentum. The best way of measuring success may be to query analysts and survey customers and prospects, if budget allows.
The best metric is to determine the relationship of PR over time to market penetration, share, sales, and profitability. The contribution of PR cannot be isolated and quantified as it relates to the direct impact on these business objectives. Rather, the most efficacious view of PR is to see it as one tool in achieving these objectives.
Smart clients keep their marketing toolboxes well stocked with an array of equipment. Public relations should always be one of the key elements.