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This is a continuation of an article that started here

Executives who fund the public relations function now reasonably expect professional communicators to communicate PR value and deliver a positive return on PR investment.  In the last article we defined both PR value and PR-ROI. In this installment, we describe the process by which public relations practitioners can help themselves and the organizations they serve by communicating a “return on expectations” and quantifying PR’s return on investment.  

Uncovering the Value System within Your Organization 

The difficulty with proving the value of public relations is that values are subjective. What is more confounding is that values change not simply from organization-to-organization but from person-to-person within the same organization. The key to springing the lock of subjectivity is a simple audit among executives to acquire, assess and align their attitudes towards the objectives of the organization; their expectations and priorities for public relations in helping to achieve the organization’s objectives and their preferences for measuring and tracking success. Just like the organization’s accountants conduct an annual audit, we in PR should conduct an annual “executive audit” to ensure PR success and to minimize risk.

Demonstrating – and Generating – a Positive Return on Your PR Investment. Connect PR performance with return-on-investment comes in three forms: PR’s proven ability to drive revenue or attract investment; PR’s proven ability to drive greater efficiency by doing more with less; and PR’s proven ability to avoid catastrophic cost through crisis-avoidance through quality counsel. 

Making the PR-to-Sales Connection. The most accessible way to connect PR with sales occurs when PR operates in isolation. In the absence of anything else, it may be safe to say that PR drove any incremental gains. 

However, most organizations use PR concurrently amidst other sales-driving activities making PR-isolation almost impossible.  Now, the convergence of new technology, advanced PR measurement, and superior statistical analytics enables marketers to connect a variety of activities with their impact on sales, investment and behavior.  Known as attribution analysis, when applied to public relations and sales, the impact of any particular digital earned media placement – whether initiated proactively or organic -- can be quantified. Armed with this knowledge, professional communicators can make a stronger case to marketing investment decision-makers who devote their dollars to the areas that deliver the best returns.  And in every documented case, PR works best: generally speaking, PR delivers returns ranging from $4.00 on the dollar to as much as $43.00 on the dollar compared with the average yield for mass-market advertising of roughly $1.20 and trade marketing’s average yield of $2.00…price promotions typically lose $.25 on the dollar.  Attribution analysis is surprisingly affordable but even if you never apply the technology, it is important for every PR professional to know that PR-ROI is measureable and it makes a meaningful contribution to sales.

PR’s Impact on Savings, Cost-recovery and Efficiency

Probably the most common approach by which PR drives ROI is by helping the organization do more with less and for less, in ways that are both direct and indirect.  In terms of direct savings, PR people regularly save money by targeting their outreach, by focusing on what works (and not doing what doesn’t work), and negotiating better terms with their agencies and outside service providers.  In terms of indirect savings, PR can help to engage the workforce for higher productivity and loyalty, which attracts greater yields. Unfortunately, and for some reason, most PR people do not view the process of continual improvement and “spending resources wisely” to be part of the ROI equation but it becomes clearer when one can demonstrate how “the cost-per-key-message-delivered improved by 20% in the past year” or “how special event attendance improved by 15% while costs were lowered by 7%.”

Avoiding Catastrophic Cost

One of the most elusive measures of public relations is the impact of quality counsel and crisis-avoidance. When assessing the “headline risk” of negative publicity one needs merely to look at the outcomes of those organizations that traveled the perilous path in the past. For example, if your organization faces a labor action, it would be wise to study peer organizations to see how they handled similar challenges and what happened as a result. You may see that during the term of the dispute, productivity declined significantly followed by sales and stock price declines. These outcomes can be monetized and can be used to compare one potential crisis response to another.

The Path to Power and Riches

While research, measurement and evaluation are critical elements in the ROI and Value processes, a lot of time and energy is wasted arguing what to measure and how to measure. We assume that ad value equivalency is a poor measure and that behavioral outcomes are the better measure. While I agree with the premise, I no longer assume to know what executives within my client organizations prefer.  Instead, I use the Executive Audit to assess their expectations and preferences and I begin by delivering results to their specification.  And if I believe there are better approaches, I incorporate them over time to help the client evolve comfortably, continuously, and consistently. 

If We Understand What Drives PR Value and ROI, Why Doesn’t Everyone Do It?

Our clients, both internal and external, want PR measurement to show value and ROI but they don’t know enough about PR to provide guidance. PR people would love to show value and ROI but we don’t know enough about research, measurement and evaluation to make the case.  As a result, in too many cases, progress comes to a halt.

Mark Weiner is the Chief Insights Officer. He's a board director for the Institute for Public Relations, a member of the Arthur Page Society and the author of the forthcoming “Public Relations Technology, Data and Insights."