Know-How Exchange : Advertising/PR

Hi.

the neo-classical and classical Economic theories are known because they say something like this "you value things according to their Usefulness". If you accept this, then you will have to put your efforts into convincing people that you provide them with a Service (PR) that will bring them a value (results, utility) they won't be able to obtain otherwise. You will sell if your price matches the cost they are willing to pay for their increase in utility.

The alternative is that you focus on a more micro-economic approach. And this is where (in my opinion) things tend to complicate.

You see, when you try to measure the ROI of things that are usually Below the Line (like PR, but not exclusive to PR) you fail to get metrics, instruments, tools to do your job.

First: do you know where you're coming from?
That is do you know your current standing point? Or are you able to test on scenarios where you don't have PR to help you?

Second: Is your Information system prepared to deal with the kind of Information you will be needing? That also implies, is your decision making group able to extract all the meaningful information?

If you answered positively to the previous questions, I would say you're home and you can try to evaluate your PR ROI. Number of new customers who bought because of that, and all the other usuall stuff will give you a pretty good idea.

If not, forget it: Your PR ROI will certainly be negative once you account for all the changes you had to do in order to measure it.

Pure PR strategies, you usually don't find them. What you do find is some sorte of MKT/PR/Comm Strategy, from which you usually have the means to determine the ROI.

As an alternative to ROI in PR, stick with the neo-classical guys and convince people that there's a fair price for what you can do for them.

Sorry about the extent of the answer but the question was really interesting.

Regards,
Antonio

PR that just fills space is worth nothing. PR that changes attitudes, builds credibility, and causes sales to rise (because its attracting customers)...is worth gold.

A very interesting question. I've had this discussion with my associate at Gryphon Reputation Management ne.com)(www.gryphonrm.com). Roger is really keen about getting an answer to this very same question. I believe my friend Dean Gagne of Checkmate Strategic (www.deangagne.com) has come up with an effective measurement process to evaluate the value of PR and determine how it influences a business and generates sales. I'd love to go into the details, but its a proprietary method I'm sworn not to reveal. .

Anyhow, yes, I know there is an answer...I'll leave it up to you to confirm it when we release our findings.

Darcy Moen
Customer Loyalty Network

First, I think there is a lot of value in all the answers posted above. I'll add my two cents though.

I would answer this question with a question...first, what sorts of PR activities are you doing? I suspect if your company is really keen on measuring ROI in the traditonal sense, that you are not really doing PR, but actually advertising, which is very different but still related.

For instance, if you are paying anyone anything to mention something about your brand, you are advertising. If this isn't happening (be honest), then you might be doing PR. However, this is tough to measure in the business school standard ROI methodology ([gain-costs]/costs), so you may as well forget about it. The problem is, what do you assign as the gain associated with PR versus some other activity?

Your best bet is to take a baseline of the number of media mentions (free ones, not ones you paid for) and then track how this is changed over time. This is presumably what you are trying to affect with your PR (hence my first question, what are you trying to do?). You can measure media mentions and assign a value to these mentions. That is, how much would a paid ad of this size and impact cost? The only problem is that a mention in an objective article is worth much more than an ad, so you have to correct for this. Take a look at new mentions you have, how much you spending on PR and do the math. That might be as close as you get. Incidentally, there are many good companies that can do media tracking for you for a reasonable price in order to get this part right (they can even do the math for you).

JMR