Don’t Be Scared: Having the ROI Conversation With Clients

• ROI must be measured. PR professionals are as accountable for delivering results as their marketing counterparts. It’s imperative to find a way to measure the ROI for a campaign or project. Indeed, the best way to erase public relations from the mix is to say, “We can’t do that” when someone asks about measuring ROI for a PR engagement. The argument that public relations focuses on relationships and other intangibles and should not link to sales just doesn’t cut it.
• ROI can be measured. Where PR measurement once proved elusive, a variety of tools and methods exist to quantify ROI at the profession’s disposal. While a precise mechanism remains a ways off, the profession is closer than ever. The last five years have brought dramatic changes in the ability to measure ROI.
• It doesn’t cost a lot. The routine argument has been that measurement costs too much. In most cases, this simply isn’t true. In some cases, components of a ROI measurement program can be tacked on to things a client is already doing. Also, some methods are less expensive than one might think.
• Basically, if you are spending $100,000 or more on public relations, ways exist to spend 4 to 7 percent of that amount to measure the program. And, it isn’t just about showing it was worth it, but also learning how to improve the program.
• Often, the data already exists. Most organizations usually have some type of measurement program evaluation in place (e.g., many brands routinely conduct awareness, attitude and usage studies). As a result, findings from these studies can be used with data from PR programs to gauge changes in familiarity, beliefs and behaviors in the target audience. For example, slight tweaks to an advertising tracker will do the trick.

What clients may ask

Clients may have specific questions about how or what to measure, who should do it or costs associated with conducting ROI measurement. Some of the questions we hear most frequently from clients include:

What do I get for my investment?

Clarify what this means. The question may simply relate to anticipated deliverables or expectations about results — a certain number of placements or, more specifically, an appearance on  “Ellen.” Find out if the client wants to know a dollar figure or some other measure that will show PR’s positive impact on the brand or company’s bottom line. Often, we interpret this question to mean a hard ROI figure and discover the client really wonders whether their messages were in their media coverage.

How much will it cost to measure the program?

While measurement budgets vary based on the nature and sophistication of the work, spending about 4 to 7 percent of the program budget is typical. Also, it doesn’t have to come from the PR budget, particularly if the organization has an existing research program.

What if we just want to know how effective a tactic proved? Can you measure the ROI for that?

It depends, but usually you can measure the effectiveness of one tactic. For example, if a program includes a specific event, it’s possible to track media coverage and sales for that event. Sponsorships, traveling road shows and local market events can be measured.

Is ROI always measured using dollars?

The equation for ROI is based on dollars — (incremental gain in dollar sales ÷ investment) x 100 percent — but other ways exist to find ROI for a program. For example, you can examine employee retention, loyalty or productivity.

Should my agency measure its own work?

That’s a decision to be made by the client. Typically, at the agency level, a group outside the day-to-day account management team is charged with PR measurement. If objectivity is a concern, members of the measurement group tend to be brought in as needed and aren’t necessarily members of the core team. Clients might choose to work with other firms to evaluate program success. No matter who does it, a measurement component is a must-have for a PR plan.

If I’m using other forms of marketing, is it possible to isolate the effects of public relations?

Statistical analysis does allow for isolating the effects of public relations. Generally, understanding the effects of a program is most successful when looking at a snapshot in time, such as changes in sales immediately after a high-quality media placement. In other cases, survey questions can fill in the blanks of the effects of public relations. You can isolate the effects with tracking studies or market-mix modeling.

What’s the first step in creating a measurement program?

Connecting the dots between communication and market research functions is vital. Determine what research is taking place and what data is being collected. From there, a conversation with the agency, client and the client’s marketing-research function will go a long way in defining objectives and the roles the agency and market research will play in executing an ROI measurement program.

Clients may have other questions, but, in many cases, an internal discussion about the resources already in place suffices. Once the client knows what’s available and what he or she would like to measure, you’re ready to begin developing a program.

Don’t be scared. Those who shy away from an ROI conversation because they don’t think they can measure this or — more often than not — because they fear the results, are the first to lose the client, budget, staff, promotion, etc. If we are serious about treating public relations as a business discipline, we must measure; it doesn’t count unless you can count it.