The ABC's of ROI: Measuring the Value of PR in Business Terms

Longing to score points with the CEO, you inform him that the last six articles published on your product, version 2.5, included an average of three key marketing messages per five column inches and double the number of reader impressions—an increase from the last round of product coverage. In addition, your company gained at least three more lines of copy per article over the top two competitors mentioned. Instead of the anticipated pat on the back, you elicit a blank stare as if you'd just greeted your CEO in a foreign language.

Unfortunately, the classic PR measurements of success do not always convey concrete business results. And with cost cutting and return on investment being top priorities for companies in today's economy, PR pros may need to re-examine the ROI variables traditionally used to communicate PR value and reset the expectations of their internal constituencies.

Whereas direct marketing programs call for quick response and quick closure to support the sales effort, PR programs reach customers (and other audiences) through the media acting as an intermediary, building long-term, credible relationships. It's impossible to place a value on relationships with the media or to measure media respect and trust. So, companies tend to focus on the level of media awareness and the impact that PR programs have on customer buying decisions. For example, a PR pro generates a speaking engagement for her chief technical officer at a conference. A reporter attends the keynote and writes a profile of the company, which later leads to a favorable product review. The media attention in turn spurs discussions in online forums. The mixture of events has influenced the market's belief in the product's value, but it is virtually impossible to identify at what point in the chain of PR events the customer takes action.

Whether a vendor is launching a new product or moving into a new market, the primary PR function of ongoing relationship building remains the same. Little in PR is an end in itself—it leads to the next activity. Once the PR snowball is rolling, it creates new awareness, which generates a new story angle, which leads to a viewpoint in a vertical magazine, which supports a business trend story. At some point this influences a product sale. Ultimately, PR is used to increase mind share and credibility.

However there is the illusion that a specific story or a research report about a vendor's product will always directly result in a sale. The goal of PR is to influence target audiences through the appropriate vehicles, i.e., trend stories, product reviews, case studies, op ed pieces, etc. PR can facilitate positive perceptions or understanding by making sure the most salient messages are clear and differentiated. PR effectiveness is measured by which target publications picked up the vendor's story and analyzing whether the messages published about the company and products were negative, positive or neutral. Companies and their agencies are using different forms of analytics to measure the effectiveness of their PR efforts, and new companies such as Biz360 offer automated tools for analyzing media coverage. Based on the analysis, PR pros can make better decisions on how to educate reporters, as well as help mobilize additional sources and ideas that bring more editorial value to the table.

There is no “one size fits all” measurement for PR. The best way to measure and prove the value of PR to your company executives is to first design goals that parallel the goals of the business. If the sales organization aims to produce the quarterly revenue goals and shorten the sales cycle set a PR goal to generate a certain number of customer case studies in key vertical markets; deliver a certain number of reviews of the flagship product. If the executive team wants to take the company public in 12 months and needs to start attracting potential investors and stockholders generate profiles and published interviews for the CEO; build his image based on management style, track record, lifestyle, etc. Court financial analysts and generate reports on the company's hot market segment. If marketing's goal is to be seen as the leading innovator in its sector build relationships with analysts and brief them in advance of upcoming products; the analysts publish reports that can result in business trends stories.

Remember, producing a PR goal is not an end in itself; it leads to another PR opportunity. Each goal that is accomplished helps build momentum, which broadens awareness and supports the financial success and growth of the company.

Robert Angus is President & Managing Partner of A&R Partners.