The Time for Public Relations is Now

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Mark-Weiner PRIME Research - featuredBy Mark Weiner, CEO, PRIME Research – North America

One of the great myths in public relations is that PR, driven as it is by relationships and creativity, is impossible to measure in terms of sales and return on investment. To the contrary, public relations in today’s business environment is as much science as it is art—and its contribution can be quantified. New applications combining public relations research and advanced statistical analyses clearly demonstrate PR’s ability to drive sales and to deliver a strong return on investment (ROI) in terms of increasing efficiency, lowering overall communication and marketing costs, and mitigating catastrophic cost.

Public relations provides what advertisers and direct marketers desperately want: customer involvement, message credibility, and sustainable brand value…all with greater efficiency.

Many companies and brands have reached a common and sometimes unexpected conclusion: PR delivers quantifiable business results often at a fraction of the cost when compared to other forms of marketing. While PR has been used to deliver value for decades, now professionals can scientifically prove how they generate measurable benefits from their public relations activities in ways that resonate in the board room.

The Time for Public Relations is NowRather than relying on PR-speak references to “hits,” “buzz” and “media awareness,” advanced communicators quantify the degree to which PR drives sales or generates a positive return on investment.  In the board room, ROI translates to how much money was made, retained or lost in relation to what was spent.

This phenomenon is not new: The first documented case of PR-ROI analysis using advanced statistical analysis came after ATT conducted an extensive, statistical analysis of marketing performance in 1999 and discovered that public relations, in the form of media relations, generated just as many new customers as advertising even though the investment in advertising was many times greater than PR. In addition to generating customers, analysis also showed that public relations regularly provided a boost to other forms of marketing, something unique to PR among all marketing channels tested. When news about ATT was positive, prominent and visible, advertising was more successful as was every other form of marketing—further demonstrating how PR was greatly undervalued as a resource.

The statistical analysis discussed here isolates the impact of public relations performance relative to other forms of marketing.  Based on sales data over time and in a select set of markets, patterns emerge that allow data scientists to assign a measurable outcome to each marketing and communications element in the mix being analyzed. Studies similar to the one conducted by ATT 17 years ago consistently show that their findings continue to be true today.  In cases ranging from automobiles to financial services, consumer packaged goods, traditional and on-line retail, beverages and telecommunications services, public relations generates the greatest efficiency.  While other forms of marketing – mass market advertising and sales promotions – drive a higher volume of sales, they do so at a much higher cost and with much less efficiency.

 About the Author: Mark Weiner is the Chief Executive Officer of PRIME Research, an international research-based communications consultancy helping many of the world’s most admired companies and brands to improve their PR-ROI. 

 

 

4 Comments

  1. Ford Kanzler on at 11:03 AM

    Great stuff! We’ve inherently, if not statistically, provably known the value and cost-effectiveness of PR for many years. Its fine seeing another reminder to this effect. Unfortunately the article is missing info about methods and the costs of measuring PR ROI. Perhaps that’s your next article?

    • N. Darlene Womack on at 5:28 PM

      Great topic, Mark! I’ve found that quantitative and qualitative research must be done before and after PR events for execs to see the positive difference that PR truly makes on its own, excluding modes of one-way communication. Measurement vendors participate gladly, but it would be ideal to identify the least costly methods of measurement, as Ford Kanzler mentioned. Consistently demonstrating impactful PR ROI at minimal cost remains a challenge.

      • Mark Weiner on at 10:51 AM

        Thanks for your response. PR-ROI takes three forms: generating revenue, efficiency (more for less), and avoiding catastrophic cost. Revenue generation is the sexiest; avoiding catastrophic cost has the greatest impact; and efficiency is the least expensive. In fact, you and everyone else probably tries to make good decisions to do more with less and for less. The easiest approach using a media relations example is lowering the cost-per-thousand people reached or lowering the of generating a positive message. All you need is your budget, the coverage and the ability to divide. In this case, lowering your costs is an ROI metric because the money you save goes to the company’s bottom line.

    • Mark Weiner on at 10:47 AM

      Ford,

      Thanks for your response and your question. One of the most exciting aspects of uncovering PR’s measurable impact on business results is that what we’ve always believed in our hearts to be true — that PR “works” — is, in fact, true. PR delivers meaningful results more efficiently than other marketing channels. We will discuss how this is done in future posts. For now, let me refer you to a paper I co-authored for the Institute for Public Relations. Here’s the link http://www.instituteforpr.org/wp-content/uploads/2006_ROI_LRW.pdf. The paper is a little old but the authors are committed to updating it by the end of the year.

      Mark

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