As someone who has sat on several sides of the PR table (marketing director, public relations professional, journalist and media professor) I have long been part of the discussion about how to determine the return on investment in public relations activity. It’s a challenging question because, while there are metrics that demonstrate value, they are not very direct or very linear.
It usually falls to those who track sales or business development activity to track marketing communications activity. Sales activity is pretty linear. A rep gets a lead, does or doesn’t make the calls, does or doesn’t close the sale. In business development, it can get a bit more complicated. Let’s say for example you’re an architecture firm. You have a business developer who makes relationships and books meetings. They take a principal to the meeting and what follows is a request for proposal. The business developer, the principal and a project manager work with a marketing coordinator to put the proposal together, and the firm gets shortlisted. Now the Project Manager and the team make a presentation and, if all goes well, win the project. When all those parties had a hand in the process, it can be difficult to accurately determine who really sold the work. Still, there are a relatively small number of variables and often the savvy business development chief can parse this out by asking the client about the various stages of the sales process and get to some semblance of an answer.
That is, of course, if we factor out the fact that the client took the meeting, in part because they had already heard good things about the firm the BD person represented (often the result of good PR), or the business developer was able to keep in touch regularly with the client by sending him/her interesting articles about the firm and its projects (which leverages good marketing) or if branding and PR efforts are good enough, the firm got hired in part because the client thought, “well they’re a well-known, well-respected firm and if they screw up, nobody can fault me for choosing someone so recognizable.” (the result of good reputation management).
When I started on the path of measuring the value of PR the only measure I knew of was to track it against relative advertising value. In other words, if a project my firm did receives a two-page feature in a magazine, I estimate the value of that feature to be equivalent to the cost we would have paid to buy two pages of advertising in that same publication. This measurement is not especially accurate for several reasons, three of which I will cite here. The first reason is that architects typically don’t advertise because they don’t have the budgets for the types of campaigns that will get us the kind of exposure advertising is geared toward achieving. Thus I’m putting a dollar value on a spend I likely wouldn’t make anyway. Secondly, I have absolute control over content with advertising that I don’t with PR. Thirdly and conversely, with PR I get the benefit of third party endorsement (an editor or a writer calling me an expert has more perceived value than me calling myself an expert), which I don’t get with advertising.
When I worked with a number of corporate clients I had the good fortune to have two PR firms as clients, so I asked them to tell me about the best way to measure PR effectiveness for mid-size AEC firms. The answer I got from senior professionals at both firms is that, yes, there are more accurate ways to measure public relations value, however it would cost more to get a more accurate read on our PR value than we currently spend on all of our marcom activities combined. Thus I’ve made peace with the fact that relative ad value is about as good as it gets in measuring the cost-effectiveness of PR activity.
It can be even more difficult to determine the dollar value of PR activity as it contributes to sales. We don’t know what we don’t know. We don’t know until we ask and, with some effective marketing communications activity, even the prospect we’re asking doesn’t know where they heard of us, they just did. Difficult isn’t insurmountable, however and it is important to have the kind of relationship between marketing communications and business development professionals that creates a feedback loop to help track this. Business development professionals should be trained to ask prospects who recognize us how they heard of our firms and what they have heard about us, and to channel that information back to those in marketing communications. Marketing communications professionals should have a mechanism for tracking that feedback and analyzing it to parse out the impact of marcom on business development activity. In addition, all parties to this dialogue should recognize that such feedback will be minimal and probably anecdotal. I’ve been at this for 15 years now and I can identify three times when a PR placement led directly to a lead opportunity and four other occasions in which I can link marcom activity to shortening the sales cycle, giving my firms access to clients more quickly than would have occurred otherwise. I tend to think of these instances on an order of magnitude similar to direct mail. It has long been understood that the average direct mail campaign has about a 4% response rate. I extrapolate then that those times when I can link marcom activity to opportunities = roughly 4% of its total impact. This feels like a reasonable assumption to me, but I always test it with my senior leadership to see if they concur.
Finally, because the impact of all marketing and business development activity is cumulative, I recognize and caution my leadership not to view any marcom activity as a silver bullet. It’s analogous to asking an architect which phase of a project (programming, SD, DD, CDs, CA) was responsible for the success of one of their projects. Very rarely is it possible to unpack the success of the design process into a single phase or activity.