So, What is the ROI of PR?
Maximizing your Media Relations Campaign by Strong Measurement. ROI In The Analytics.
The times when PR ROI (return on investment) was difficult to measure are long gone. In fact, big brands have been successfully measuring the ROI of public relations for some time now. While many still consider ROI in financial terms (the amount of money totaled from public relations campaigns after subtracting the costs), that calculation does not prove effective most of the time. But, many other elements can be considered to calculate return on PR investment.
In the past, the main measurement criteria was the quantity of coverage, channel of delivery and media type. Other factors included type of mention (feature or exclusive), whether competitors were also mentioned, source credibility, and popularity. Some factors apply online as well. For example, for a tech startup, features on sites like TechCrunch, Mashable or ReadWriteWeb represented (and for some still do) the holy grail of a PR campaign. Today, tracking PR ROI also involves measuring social media ROI, and measuring outcomes is the most important aspect of this equation.
How to calculate the ROI of public relations? It may not be easy, but there is a way.
What business owners need to consider first when calculating PR and Social Media ROI is that they represent earned media relations, and earned media requires ongoing management, time, and flexibility. It is not enough to do a campaign today, with no follow-up tomorrow, unless the results desired are “flash sales.”
Measuring ROI on a PR campaign.
In the beginning, the PR firm and client should determine the desired outcome for the campaign. Then it will be easier to see if the objective was met or not. Like most goals, set an achievable goal, a timeframe, and know what resources are available to accomplish the goal. So in the case of a PR campaign, time + expenditure + media + whatever else the plan entails = goal. If that equation is true at the end of the campaign, it was successful. But measuring outcome against expenditures won’t work since goodwill and public opinion may not spur an immediate action, but may make a huge difference in future purchases or decisions.
Factor in what action the competition sees during the same time. If they are not running a PR campaign at the same time and getting much less action to their bottom line or customer responsiveness, that is success. For comparison purposes, know what happened with your client’s accounts in the period prior to the PR campaign. If their campaign runs for three months, know the information for the three months preceding it, as well as the same three months one year prior to the campaign.
Also, clients need to understand the PR ROI cannot be reduced to a simple accounting equation. An additional, intangible value, needs to be considered, and this value may take a while till it becomes “cash.” Because PR and corporate communication strategies are often employed to achieve non-financial objectives, there are several other metrics to consider. Here are a few of them:
PR Mentions and Media Impressions
- Counting media placements: PR’s main role is outreach to the media, and communicating a company’s message. Counting media placements is one measurement of ROI, and indicative of effort if you get massive coverage in various publications. Consider how many mentions are mainstream or first-tier (like TechCrunch, BusinessWeek, etc.) and how many are less popular, yet highly influential. Everything in these counts as a media mention but some carry less weight for ROI.
- Assessing quality: after counting, consider the quality of these placements: will they influence behavioral changes in readers? Will these changes have a positive impact on their attitude towards your business? Are they credible? Do they feature your company exclusively? Is the tone positive? Do they convey your message accurately?
- Viral impact: online, media relations coverage extends to social media networks, with readers sharing the news, and reacting to the information. There are several ways to measure these reactions, beyond number of mentions. Look at the number of influencers mentioning your brand; their tone of voice; and the sentiment of the message.
Social Media Metrics
- Engagement vs. coverage: it is generally agreed the most important aspect of social media is the quality of the conversation, and not the “coverage.” So, when you measure the PR ROI on social media, focus on community and conversation, rather than the number of mentions. Are people really talking about your brand, are influencers carrying the conversation? Is the conversation affecting your brand’s social media presence?
- Community growth: as an effect of social conversations related to a specific PR campaign, your brand should experience some kind of growth relating to social media presence: more Twitter followers, more Facebook likes, etc. Because likes and followers can be bought, to quantify community, assess whether the people following or liking something are truly interested in your brand. Are they active users, conversing about issues related to your business? After they follow, do they participate in conversations on your social media channels?
PR Outcomes
- Behavioral impact: this is perhaps the most important PR outcome to consider because it directly reflects the success of a campaign. How many customers called to inquire about your products or services? Are more people recommending your brand than before? Are you generating more sales? Is your site receiving more traffic from media placement, and how many of those visitors taking action (like purchase, call your customer support number, etc.)?
- Growth: as a result of everything mentioned above, in an ideal world you should experience growth that doesn’t reference flash traffic to your site. If you are not selling anything (for example social startups) you should see more user registrations, and unique user growth. Maybe more app downloads if that’s what your business does. Product sales, if you are in eCommerce and you had a concrete campaign based on a product launch. No matter how you look at it, growth means customer or user retention and revenue growth where this metric applies. If a PR campaign doesn’t have this outcome, it has failed.
Long term outcomes:
When employed properly, PR campaigns have an immediate impact, mid-term, and long-term effects. These values can be quantified as follows.
- Brand loyalty and advocacy: PR should increase brand awareness, and generate goodwill towards a business. If this succeeds, it boosts brand loyalty and generates behavioral changes creating brand advocates. Are people still talking about your brand long after a campaign has ended? Do they recommend you on social media, blog, forums, etc., after a purchase? Are they returning to your business for more services? For example, on social startups and apps: are they active users?
- Cost savings: PR activities may even result in cost savings such as reduced customer complaints, declining criticism or opposition, prevention of media crisis that could damage a brand’s reputation, resulting in fewer sales, etc.
- Better market positioning: PR may help your brand become a recognized influencer in your niche, giving you a clear advantage over competitors.
Finally…
While there is still no mathematical formula to quantify PR ROI, the guidelines above give a fair idea what return on PR investment is all about. But, for PR to work effectively, you’ll need to align all your departments (sales, marketing, customer support, etc.) to work side by side.
If PR paints a brand in shiny colors, there will be high expectations from the public, and businesses must be ready to meet them. Companies must be consistent with their PR message.
Many times, PR campaigns fail because customer support is faulty, or because other departments were not briefed. Do not begin a PR campaign without aligning key interests and making sure that everyone is on the same page.