Measuring ROI in Public Relations: Beyond AVE and Simple Metrics

When it comes to evaluating the return on investment (ROI) of a public relations (PR) campaign, it's not always as straightforward as it might seem. In many cases, it's the client who is making the investment, rather than the PR firm. Therefore, it's the client who might want to measure the ROI, not the PR firm.

Setting Objectives for PR

Before you can measure the return, you need to determine what exactly you're trying to achieve. For instance, if Dr. Frankenstein is creating a new monster and the burgomeister wants to increase public awareness, the goals would be more specific. You might need an angry mob to gather and burn the castle. However, achieving that is much harder than it sounds.

Hiring a local PR guy might help by placing some articles in the local paper, setting up talking points for a farmer with local credibility, or generating some Twitter activity and online engagement. But there's no guarantee that the villagers will take action, even if it's what you'd like. Measuring success based on these activities is not a reliable indicator of return because not every message will resonate with everyone, and people's responses are hard to predict.

The Challenges of Measuring PR ROI

The International Association for the Measurement and Evaluation of Communication (AMEC) is one of the bodies trying to define best practices for measuring the value of communications, including PR. However, even with these guidelines, measuring PR ROI can be challenging. Here are a few common issues:

Cost and Time Constraints: Measuring the value of PR can be expensive and time-consuming, requiring significant resources. The Impact of Other Factors: Other factors can influence the metrics you're measuring, such as awareness. It can be difficult to isolate the impact of PR specifically. Monetizing Changes: It can be challenging to put a monetary value on the results of PR campaigns because the effects are often intangible.

Using AVE and Other Metrics

Some agencies use Advertising Value Equivalent (AVE) to measure the value of PR. AVE is a measure of how much it would have cost to get the same "coverage" using advertising. Typically, AVE is 3x the cost of the advertising because PR generates a greater impact. While AVE is simple and relatively cheap to measure, it doesn't necessarily capture the true value to the business. Negative stories and positive coverage are given the same value under AVE, which is often not accurate.

Other simple measurements include "cost per clipping," which is easy to calculate but doesn't tell the whole story. These metrics can be useful for certain purposes, but they are often crude and only provide a partial view of the PR campaign's effectiveness.

Overcoming Limitations with Multi-Metric Approaches

Most PR agencies use a combination of metrics to overcome these limitations. They measure outputs, outcomes, and outcomes in a way that links to tangible impact on the organization. The best agencies understand that perfect measurement is extremely difficult but strive to find a reasonable approach that aligns with their capabilities and client needs.

These approaches can include tracking:

Press Coverage: Monitoring the number of press releases issued and the media coverage received. Media Mentions: Quantifying the mentions in various media outlets, including online and offline press. Media Impressions: Estimating the reach of the media coverage, including reach and frequency. Crowd Sentiment Analysis: Analyzing social media activity and public sentiment to gauge awareness and engagement. Customer Feedback: Collecting and analyzing customer feedback to determine changes in perceptions and behaviors.

By combining these metrics with outcome-based measures, such as sales growth, market share, or customer satisfaction, PR agencies can provide a more comprehensive view of the PR campaign's ROI.

In conclusion, while measuring the ROI of PR campaigns can be challenging, it's not impossible. By understanding the limitations of simple metrics like AVE and using a multi-metric approach, PR firms can provide valuable insights to clients. The goal is to find a balance between accuracy and practicality to help clients make informed decisions about their PR investments.