The Quest for ROI

The value and proof of ROI differs from company to company

PRWeek, March 14, 2005 By Erica Iacono

Determining a return on investment for PR has never been easy. But when budgets are still hard fought, it is vital for PR to prove its importance to the marketing mix. Although proving ROI is a common goal, ideas about how it's done differ from measurement firms to PR agencies to corporate PR departments.

The starting point, however, is similar for most efforts. Carol Meyers, VP of marketing at Unica, an enterprise marketing management solutions provider, says that one of the first steps in determining ROI for PR initiatives is to set goals at the beginning of the process that can later be measured.

'My motto is, if it's important enough to spend money and time on, it's important enough to figure out if you're getting the end result you were hoping for,' she says. One of the ways Unica determines ROI for a particular campaign is by using Biz360's Market 360 tool to connect an initiative, such as the launch of a press tour, with the flow of traffic to the company's website.

Prompted by client requests, for the past two years Ketchum has used four techniques collectively known as the Ketchum ROI Lab. 'Lots of folks say that ROI is not a concept that's relevant to PR,' says David Rockland, SVP and global director of research. 'We felt as an agency that this is not the way we wanted to go. This is a true business function, and it deserves a seat at the table... with any other form of marketing communications.'

The first component of the program measures a return on impressions, which links how impressions made by PR can drive behavior. Return on earned media, the second step, is based on the idea of ad-value equivalency.

The third technique, which determines return on media impact, tracks sales against media coverage over a period of time. The final component, return on target influence, uses a survey to ask a portion of the target audience how or if their decisions about buying a particular product were linked to PR efforts.

Measuring business outcomes

Similarly, Hill & Knowlton uses a multistep process to determine ROI for its clients, says Ruth Pestana, US director of strategic services.

'The goal is always to measure a business outcome,' she says. Naturally, that outcome differs from client to client. For consumer companies, it could mean a sales figure or market share. When dealing with public affairs clients, it could be whether or not a particular legislation was passed.

Either way, there is a series of steps to follow as part of determining ROI. 'We try to look at as many factors leading up to it as possible to prove that we pushed the needle,' she says.

Measuring the influence on the media is just the first step, Pestana says. The agency's approach also includes using custom surveys and tracking studies to measure the influence on target audience attitudes. Determining if there has been an increase in website hits, visits to a store, or calls to an information line is another step in measuring ROI, she adds. Customer retention is also examined. All of these steps lead up to ultimately determining the impact of business outcome. 'Often it's hard to prove the part of PR in a sales uplift,' she says. ' If we can show that we've had a hand in all of those steps, then it's easier for us to make that final link to an increase in sales.'

Angie Jeffrey, VP of PRtrak/SDI, says information obtained through measurement can be used to help determine ROI. PRtrak has linked share of discussion - the quality and quantity of stories in relation to that of competitors - to certain business outcomes. Jeffrey says the company worked with Porter Novelli to determine a correlation between share of discussion for one of its pharmaceutical clients and prescription volume. The study yielded a correlation of 0.972. Jeffrey says that of 160 studies, 97% have shown a strong correlation between share of voice and desired business outcomes.

Innovative programs

Many companies are constantly on the lookout for creative ways to link measurable results back to a campaign. This year, Verizon SuperPages.com launched a campaign designed to draw visitors to the site for St. Valentine's Day. The PR team issued a press release with the results of a survey about St. Valentine's Day gifts. Verizon SuperPages worked with SEO-PR, a search-engine optimization company, to place links within the release that brought readers to specific 'landing pages' on the site. 'We have to prove that our efforts are driving traffic,' says Mary De La Garza, director of external communications. 'We wanted to be able to tell the internet division how many hits the site got because of our news release.' The goal was to attract the attention of journalists and consumers.

The release was distributed via PR Newswire and PRWeb, ensuring that such news engines as Google and Yahoo would pick it up. However, only the release distributed via PRWeb included the hyperlinks to the landing pages on the SuperPages site. Verizon was able to attribute 3,229 visits to its specially designed landing page. Of those, there were 2,715 clicks, or an 84% conversion rate, into the site to either use its search pages or to make purchases. De La Garza says the PR team is currently planning to launch similar campaigns in the coming months.

John Wilkerson, senior communications manager at TRW Automotive, says that he relies on measurement as a way to maximize the PR budget, which means getting the best coverage for the dollar. Having concrete evidence of how a particular campaign affected share of voice is helpful when he needs to justify PR spending to upper management. 'Without having the metrics... I think it's really difficult to get that kind of measurement,' he says. 'It's tougher to make the argument to management that you are moving the needle in the right direction.'

By working on a project with Cymfony, TRW has been able to determine which major PR events had the most impact on its media coverage, which is how TRW typically defines ROI. Wilkerson says he will look at a one- or two-year period, plot out major PR events, and then coordinate them with not only the amount of media coverage, but also the significance and tone.

Using this information, he says, TRW has determined that the type of PR events that provide the 'biggest bang for the buck' are those where journalists are directly involved with TRW's products. For example, TRW recently hosted a press trip to Sweden, where journalists from around the world were invited to a test track to experience TRW's safety products firsthand.

Finding The Right Goal

Perhaps more important than the question of how to prove ROI is the question of what exactly constitutes value. It's something that depends on the preference of the client and the philosophy of the agency or measurement firm. When trying to determine the ROI of a program, it is first necessary to identify a value system.

'This question is one of the fundamental issues PR has to contend with,' says Mark Weiner, CEO of Delahaye. 'Nobody can agree on what value is.' Delahaye's definition of ROI has three components: giving a firm research that will contribute to sales growth, helping firms reduce costs, and averting cost.

Each year, Delahaye surveys executives who fund PR programs at large organizations to determine what is most valuable to them in determining the success of a PR program. 'Ultimately the value system must be one in which the measures are reasonable, meaningful, and measurable,' he says. Although the ideal is to link PR performance to sales, Weiner says it does not meet the criteria of being reasonable, meaningful, and measurable, and, as such, it almost never appears at the top of the list of measures that the internal clients prefer.

Indeed, Katie Paine of KDPaine & Partners says that only one in 10 of her clients identify sales as a goal of the PR program. 'PR has so little control over the sales process that it's hardly fair to tie a (PR program) back to sales,' she says. Her measure of ROI is dependent on whether you get the message across. She advises taking a PR budget and dividing it by the opportunities to see messages and come up with the cost per message communicated.

'If you can communicate a key message to your audience very cost-effectively, that's a great measure of your success,' she says.

Weiner says there is often a disparity in what the clients determine as value for a PR program and what the PR agency views as a measure of success. For example, he says, the answer that always appears as being least important among internal clients is volume of press clippings. Yet when PR agencies are surveyed, their preference for measuring PR performance is always volume of press clippings.

Weiner instead advises PR agencies to survey their clients with two sets of questions. The first set, he says, should focus on rating different PR activities in terms of their importance to a PR program, rating the PR department or agency based on its performance of these activities, and rating performance in comparison to competitors.

The second set of questions should include the importance of PR measures in relation to their abilities to achieve goals, the extent to which the PR department or agency performs on these measures, and how competitors perform on these measures.