Measuring PR Performance Against Budget – An IPREX Conversation

sip_share_logo_finalYears ago a public company CEO told me: “I hate PR. I  know we need it, but I never know if it’s worth the money. I don’t know if it’s doing well. I don’t know how much I should pay. Yet I know we have to have it.” I was shocked because I had a deep conviction about the short- and long-term value of good PR. Yet over the years I have met many other business leaders who felt the same way. Sales are easy to measure. PR, not so much.

 

That has shifted with social media and easily-destroyed reputations, and an increasing number of executive teams see PR as a necessary part of building and maintaining a strong reputation while making deposits into the “bank of goodwill,” as one IPREX partner notes below. Yet they still have trouble measuring PR’s value.

 

At the IPREX annual meeting in Berlin, I asked a few of our colleagues from various regions and countries how they measure PR performance against budgets. It turns out, unsurprisingly, that performance metrics vary dramatically according to company, marketing manager and campaign. In a business where the only certainty is what you give — the effort and creativity devoted to building awareness or shifting audience perception — there’s a wide range of ways to look at what you get in return.

 

Michael Fineman, President, Fineman PR, San Francisco
First, it’s critical to benchmark campaign goals at the very beginning and obsessively measure and report on the agency’s progress specific to these goals.

 

Second, there is the intangible element. We all know when our client is doing well. When that’s the case, a campaign or program can fall short of its goals and there can still be a sense of success. This can be enough to keep a relationship healthy and moving forward, and obviously adjusting for better results. Conversely, if a client’s business is struggling or failing, it might make no difference if the agency meets or exceeds program goals — the relationship is at risk.

 

Kathy Tunheim, Principal & CEO, Tunheim, Minneapolis
It’s all about taking responsibility for being understood. That is what we help our clients to do, and we know we need to hold ourselves to the same metrics.  So value is achieved – and measuredas a combination of our level of effort and the difference we made in our clients’ business.  If we spend lots of effort but don’t impact their results, that is low performance.  The goal, of course, is high impact with optimal effort:  Score!! 

 

Casper Jenster, EMEA Director, IPREX, The Netherlands
We often will look at the level of effort and help our client understand what this should have cost with other firms or, based on results, if they bought advertising for that kind of space. They often don’t realize the value of what they get. Also, it’s important to note that level of effort is clear and easy to quantify, but results are not always predictable in our business. Sometimes they can be disappointed, even though there was great effort put into a program.

 

Nick Vehr, President, Vehr Communications, Cincinnati
We measure against expectations and report regularly for most clients. Our goal is to initiate a conversation with each client engagement/project focused on the client objective. When it is increased sales or market share growth, we look at how we influenced leads understanding that we cannot close sales — the client’s sales team must do this. Some of the metrics we use include:
  • Ouputs: the work we do/things we produce (content, plans, posts, white papers, etc.).
  • Outtakes: attitude change in target audiences as a result of outputs generated. This often requires original research for which not all clients are willing to pay.
  • Outcomes: desired target audience action (inquiries, leads, sales, etc., which typically become the client’s responsibility).
John Scheibel, CEO and Mary Scheibel, Founder and Principal, Trefoil Group, Milwaukee, WI
John: “You need to work with the client to find metrics that tie as closely to the client’s income statement as possible. And if you wait until the end of an initiative or campaign to do this, it’s too late.”

 

Mary: It’s important to counsel companies who are transitioning from sales-centric to marketing-centric cultures. When they are just beginning to invest in marketing and public relations, they often invest just enough money to be dissatisfied.”

Helga Tomtschick, Managing Partner, Lang & Tomaschtik Communications, Austria
One of the key metrics is the CEO’s personal satisfaction. The client CEO needs to feel like PR is an insurance policy. Whether there is a crisis or difficulty, whether there is good news or bad, the PR agency is there to help. If the client CEO understands that his marketing team and agency feel responsible  for his or her well-being, then the relationship will be strong.

 

John Williams, CEO, Mason Williams Communications, London
We have an agency mantra – Did It Make Any Difference? (DIMAD). We use this as a measure against all activity. We work really closely with all our clients to understand what results THEY want and, in our case, it is usually sales or influence of one kind or another. All communicators need to understand that a nice big piece of media coverage is great, but if it doesn’t make any difference to the parameters against which the activity is judged by their client the only benefit is to the ego.

 

Andrei Mylroie, Partner, DH, Spokane, WA
One of the things we’ve seen over the past five years is marketing and communications being viewed as a core business strategy for many of our clients. This is a big shift from the past, where it was viewed by many organizations as a more tactical service or department. Along with this shift we’re measuring differently as well. So it’s not just reach, frequency, ad equivalency, etc., but we’re tracking reputation, consumer sentiment and business outcomes in far more holistic ways.

 

Alyn Edwards, Partner, Peak Communications, Vancouver, Canada
Unfortunately scope-creep is part of our industry, and in media relations we are always trying to do more for the same budget. We often have to measure by number of impressions, and while it’s not the only measure, it’s a pretty strong one. For some clients, such as in real estate, the sales effect can be quickly measured.

More importantly, clients need to understand that PR is making deposits in the bank of goodwill. When you make those deposits in the bank of goodwill, which is commonly called your reputation, this will:

  • help sales
  • help recruitment
  • help with instant recall
  • and help dramatically in times of crisis.

We have had clients with significant food recalls, but their decades of deposits in the bank of goodwill have helped them through it. What is the ROI for having a good reputation? It’s unending.

 

Hollywood Discovers PR and Finds the Past

The New York Times has a rather odd piece from Sunday discussing how the film industry is cutting back marketing budgets and focusing on public  relations instead. I’m sure there is more to this story, but I’m not interested in debating the merits of paid versus placed media.

I zeroed in on this paragraph:

Disney recently went so far as to develop a computer program to help it determine how much monetary value was coming from such publicity efforts. It can quickly plug in data — “Access Hollywood” had a 30-second interview with a star of “The Middle,” a new ABC comedy — and the program spits out what that same 30 seconds would cost to buy.

Seriously Disney? The minds that come up with some amazing and creative stoytelling looked deep into the marketing analytics and came up with ad equivalency?

Oh KD Paine, please save them.