ROI of Public Relations:

“Publicity is absolutely critical. A good PR story is infinitely more effective than a front page ad.”

Richard Branson

The times when PR ROI was difficult to measure are long gone. In fact, big brands have been successfully measuring the ROI of public relations for some time now. The definition of ROI is a ratio of how much profit or cost saving is realized from an activity against its actual cost often expressed as a percentage.

While many still consider ROI in financial terms (the amount of money totaled from public relations campaigns after subtracting the costs), there are many other things that can be considered to calculate return on PR investment. In reality few PR programs can be measured in such a way.

In the past, the main measurement criteria were the quantity of coverage, channel of delivery and media type. Other factors included type of mention (feature or exclusive), whether the competitors were mentioned along, source credibility as well as readership of the publication in the target audience. Today, tracking PR ROI also involves measuring social media ROI.

The new ROI model is that ROI is a form of impact, but not all impact takes the form of ROI. In PR, the ROI is not always a financial metric. However, it is tangible and must take one of three forms:

  • Revenue generated
  • Cost savings
  • Cost avoidance

Furthermore, to accurately calculate ROI, Goal-setting and measurement are fundamental. Goals should be as quantitative as possible with the target audience clearly defined. Measurement should include traditional as well as social media, effect on awareness of stakeholders, as well as impact on business results.
To measure business results for consumer or brand marketing, models that determine PR’s effects on sales or other business metrics, while accounting for other variables, are preferred choices.
The ROI for PR should also include the following:

* Measure outcomes, not outputs: Outcomes include shifts in awareness, behaviour related to purchases, corporate reputation, employee engagement, public policy and investment decisions. How you measure the effect on outcomes should be tailored to the business objectives of the PR campaign. Quantitative measures such as benchmark-and-tracking surveys are preferable; qualitative methods can supplement them. Such research can identify the change in purchasing, purchase preference or attitude shifts resulting from the PR initiatives.

* Media measurement is about quality: Measuring the number of mentions in print or on the air is generally meaningless. Instead, media measurement should involve audience impressions, quality of the media coverage (tone, credibility and relevance of the medium to the audience, message delivery).

* Social media can be measured: There is no single ‘metric’ for social media measurement. The parameters would depend on the campaign objective. Right now, it’s mostly about statistics such as how many likes have been achieved on Facebook or the number of Twitter followers.
But PR is not only about the numbers; it’s about managing reputations. The emphasis should not be on erasing negative comments or mentions, but to respond quickly and address the issues raised thoroughly and honestly, not react only in moments of crisis.

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