Measuring the Effectiveness of Your PR Programme

Posted by Shelley Grell on January 20th, 2010.

Before you spend your valuable dollars on a PR programme, you need to determine exactly what you want to get out of it. Studies and statistics can demonstrate the value of PR as a discipline, but to measure meaningful results for your company, you must first define exactly what it is you’re hoping to achieve.

Well-executed PR has a definite and positive impact on a company’s bottom line. But it is important to track what your specific PR campaign is doing for your company. So how do you go about measuring the Return on Investment (ROI) of your PR dollars?

Clearly, it is easier to measure ROI for some investments than others. For example, a new machine costs $10,000 and produces $1,000 in profit per month: the machine will pay for itself in 10 months.

PR, on the other hand, is not as straightforward due to the intangible nature of such things like ‘attitude’, ‘reputation’, and ‘awareness’. The value of PR, though, is real, and has a direct impact on the success of the company. To implement and maintain an effective PR campaign, you need to understand exactly where this value is created.

We have found that businesses experience many benefits as a consequence of their PR activity:

  • Companies with favourable media coverage receive increased public interest, new business enquiries and referrals.
  • The business introduction and sales process can be shortened considerably, because when people read about businesses in the media they are perceived as market leaders and are more likely to be trusted.
  • PR reaches a wider audience and creates longer-term results than advertising.
  • Employees like seeing their efforts in print and reading about what their clients say of their work.
  • PR is good for recruitment, as people regard companies more favourably when they read about them in positive editorial of the business and technology pages.
  • Customers respond positively to joint case studies and the response they get when they are published in the media.
  • Students, applicants and customers around the world can also find PR generated coverage and news releases on the Internet. Those who are written about most are considered more dynamic.

Case Example – Holliday Group / iTouch
The Holliday Group employed Communicate IT at the beginning of 2000 for a sustained PR campaign with news releases and case studies to the media every month, plus regular tracking of relevant features that would be appearing in industry publications. The exercise has provided enormous value for us,” says Phil Holliday, Managing Director. “While we knew we were good, most others didn’t, but suddenly people started calling us. I remember getting a phone call from Dave (Ffowcs Williams) saying that he had experienced a ‘landmark change’. A freight company had called to say that they were looking for a wireless system and that they knew we were market leaders because they had read about us.” The increase in profile raised the perceived market and brand value of the Holliday Group and attracted many enquiries from the industry, some from people keen to buy the company. After months of negotiations, Holliday Group was acquired by iTouch PLC for a multi-million dollar figure in December 2000. While PR can’t take all the credit for their success, Holliday feel their average $2.5K per month spend on PR helped create significant return.

The nature of PR is that nonbiased third parties are speaking about your company of their own volition. The fact that there is an element of the message that is outside of the control of the campaign is precisely what gives media commentary such high credibility. Direct calls to action, however, tend to be best left to traditional advertising, where your company will have complete control over the content of the message.

The Value of PR as a Discipline

In 1999, the American Council of Public Relations Firms surveyed the hundreds of companies on the Fortune “Most Admired Company” rankings to determine if there was a pattern in their PR spending. The results of the survey were undeniable: the Council found that the more a company spent on PR as a percentage of company revenue, the better their reputation.

The survey also showed that the top 200 companies in the Fortune Reputation survey spent more than twice as much as the bottom 200. The findings confirmed that reputation can make a significant difference to the bottom line. While the top 10 ‘Most Admired Companies’ posted a return of 70.5%, the bottom 10 went down by 26.8%.

The report clearly proved that good reputation is directly correlated with strong financial performance.

Evaluating Media Coverage

While quantity and size of any coverage generated can give an indication to the success of the programme, this alone will not take into account the quality of the media or its relevance to your target audience.

Case Example – Bluewater Systems

Bluewater Systems began their PR campaign just under a year ago, and have received substantial trans-Tasman media coverage of their embedded computing solutions. Tim Trewinnard, the General Manager, describes the value Bluewater has received from an increased and improved public image:

“While Bluewater could not tie down new revenue directly related to an article published, there is an interesting correlation between the use of PR, a real increase in business revenue for the company and an observed increase in market recognition and respect. What we have observed in the market is that the Bluewater ‘brand’ has become increasingly recognised and on top of that, increasingly respected by potential customers. Companies are coming to us already understanding the work we do and of the mind set that we do it well. Typically they have all seen our name mentioned at some point in the past year, re-enforcing the fact that Bluewater has moved on from being a small ‘Fred in the shed’ developer to be a real company, doing real things for real customers.”

PR practitioners can provide a more subjective assessment by analysing the coverage, providing reader profiles of each key publication in which the coverage appeared and detailing how many executives with specific job functions have had opportunities to see the client name. The number of media interview opportunities identified, the status of journalists attending an event and quality of resulting coverage can also be used as the measurement criteria.

For most PR programmes it is valuable to maintain a press clipping service, as this will demonstrate the coverage your PR efforts have generated and, in turn, enable an accurate evaluation of the effectiveness of PR.

A further technique is to establish a message check protocol, which identifies key messages that need to be communicated in any given release. The release coverage is checked for key words.

These and other evaluation techniques provide useful indications as to whether or not the coverage can be considered successful. Over time, trends can start to be established. Such research can also enable you and your PR consultancy to know when to change and adapt both strategy and approach.

Determining the ROI of Your PR Campaign

To evaluate the ROI of your PR strategy cost-effectively, you must support and help monitor the programme with a professional and detailed sales conversion process. In this section we will demonstrate how you can support the PR evaluation process by measuring related activities.

To measure the effects of your PR programme, you need to determine the intended result before we begin. Different companies have different objectives for PR, and each objective has multiple variables that can be measured to determine the impact. Below are some examples of how specific objectives can be quantified. This list is by no means comprehensive, but will serve as a starting point to gauge the success of the campaign.

Increased Awareness

  • Hits on website
  • Sales enquiries
  • Phone calls
More Effective Recruitment

  • Enquiries from potential employees
  • Average length of time a position is open
  • Employee turnover
Increased Sales

  • Conversion rate of enquiries
  • How customer first heard of company
  • Which product or service is selling the most
Shorter Sales Cycle

  • Initial responses from potential customers
  • Length of time from first sales enquiry to deal close
Increased Investor Support

  • Share price
  • Volume of traded shares
  • Interest from potential investors
Lower Cost of Sales

  • Promotional costs as a % of sales
  • Cost to distribute message per thousand recipients

Depending on the size and structure of your organisation, some of these items will be easier to measure than others. Most small-to-medium companies, for example, have a ‘gut feel’ for the length of the sales cycle, but few track it with precision, making change difficult to measure unless it’s dramatic.

You can refer to the criterion you are measuring as the success variable. A quantifiable success variable allows you to evaluate results by knowing the starting value and the value after the PR campaign:

Item Example
Success variable Website hits
The starting value of that variable Before we began our PR campaign we got 3,000 hits per month
The value of that variable after the PR campaign After the media coverage of our new product the number went up to 5,000 hits per month.

Measuring website hits is a nice way to gauge interest because most people have ready access to precise figures. However, for that variable to be truly meaningful, you’ll have to go a step further and quantify the meaning of increased website hits. Do you know what percentage of people who visit your website enquire about your product? And what percentage of people who enquire eventually buy?

To get the best response from your PR efforts, therefore, you need to make sure that anyone interested in contacting you after reading a positive story will continue to have a positive experience. The usability of your website, the warmth of your company representatives, the professionalism of your marketing collateral, and the quality of your products and services are what will bridge the gap between interest and sales.

Notice that you must know the starting value of your success variable or you will have no way of knowing whether the end result is good or bad. To effectively measure the campaign, you have to ask good questions before you begin: What measurement information is in place? What is the variable that a) you are hoping to change and b) you are realistically able to track? And, most importantly, how will you follow up on increased exposure so that you can convert that publicity to dollars on your bottom line?

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