In this time of economic uncertainty, the need to deliver value and drive a positive return-on-investment has never been greater. While the current environment presents challenges to all forms of business and business activity, it underscores one of the public relations profession’s most vexing and long-lasting challenges: how to connect public relations performance with client expectations and business outcomes. And in answering these questions, PR people aspire to lead the businesses for which we work using proven methods and a reliable body of knowledge.
Understanding “PR Value” and “PR ROI”
This feature explores “PR value” and “PR return-on-investment” to suggest approaches for uncovering the often-secret value-systems that govern many public relations programs, and to propose straightforward methods to quantify PR’s return on investment. In doing so, we seek to deliver on our promise for professional development; for tangible benefit to our employers and clients; and to elevate the public relations profession.
While frequently used interchangeably, Value and ROI are different. Confusing the two only makes it more difficult for public relations to make its business case argument. For the purposes of this feature, let’s consider the following characterizations:
Value: When an object is desired and can be obtained only by one’s efforts, anything through which these elements unite holds a power in exchange (or “value”). As such, PR value represents PR performance in relation to the effort or the investment. Strictly speaking, value represents no other intrinsic power or fact: it is simply represented by the results you generate and report within the context of expectations and, as such, it is entirely subjective.
Return on Investment: For a given use of money in an organization, the return-on-investment or ROI is how much profit or cost saving is realized. While “profits” are not the objective for every public relations program, organizations apply an ROI calculation along with other approaches to develop a business case for a given proposal or endeavor including the pursuit of memberships, donations or investments, votes or loyalty. In cases where the immediate objective may include gaining market share, building infrastructure, positioning oneself for a public offering, or other objectives, a return on investment might be measured in terms of meeting one or more of these objectives rather than in immediate profit or cost savings. However, ROI is entirely objective and quantifiable in terms of revenues generated, savings achieved or costs avoided…in other words, ROI is monetary.
By accepting these descriptive definitions and speaking generally, two truths emerge:
- Value is not solely derived from a positive ROI
- ROI does not necessarily equate with value.
While your client – internal or external – may be happy to find that your program delivered both value and ROI, they may not expect it or even want it.
The second part of this article – which explores the best way to uncover the often secret value equation your executives hold towards your public relations activity – is available here.