Measuring the ROI of PR
The public relations community is going through some changes and many of those changes are similar to those that traditional media has gone through: adjusting to new business models.
The move to online publishing has not worked well for traditional media because advertising cannot be sold for the same amount of money as print advertising. In addition, the metrics available to online advertisers have enabled them to more finely tune what works, where, and even at what time of the day.
The old adage that half of your ad spending was wasted has now changed in the online world. Yet it was that "wasted" half that was subsidizing journalism, and other news services.
Similarly, the PR industry is moving towards a metric based system. The PR industry has long believed that it is undervalued, that the work it does brings in more dollars than a dollar spent on other marketing activities. Metrics would be a way of surfacing the value that PR provides, and thus bring in more business by tapping into adjacent marketing budgets.
There are lots of ways to create an ROI for PR but the industry should be cautious. For a start, what are the right numbers? What is an acceptable number of views for that "viral" video that was created by your PR firm? How many views did that blog post get? How many Facebook "fans" on the company page. How much were those "re-Tweets" worth? And so on.
Applying metrics to determine a PR ROI brings another issue. Just as in the case of traditional media losing money by moving online because advertisers could tell where their money was wasted, the same will happen in PR. It's a Pandora's box.
Improved metrics helps the client be more efficient in spending its PR budget. It doesn't mean that there will be more money for PR. Plus, engaging people through social media is expensive. Will PR firms be able to handle the extra work involved if budgets aren't increased?
Also, the numbers don't mean the same thing in different PR engagements. As Dennis Howlett from AccMan points out:
"Whomever is thinking that traditional measures will do is living in fantasy land - at least in B2B PR. Might work for consumer but no way does it translate to business readers. That's about influence which has almost nothing to do with eyeballs."
Improved metrics could result in cuts in PR revenues in the same way that traditional media has seen cuts in its revenues because of advertising metrics.