Customer Service
1-800-461-7353

ROI metrics for PR, return on income for PR, ROI for public relationsReturn on investment (ROI) has become the metric above all metrics to demonstrate success for PR, because it connects PR outcomes to corporate goals and revenues.

Here’s the thing though. Although everything is measurable – even PR — and there’s a right metric for everything, measuring ROI is not always an accurate or effective way to judge PR. More often than not, ROI is not the right metric to assess the total value of a PR program. Focusing solely on ROI ignores the effects of PR on public perception of the organization and its brands. It ignores the value of improving corporate reputation fostered by PR activities.

Can You Accurately Calculate the ROI for PR or Marketing?

PR and marketing agencies and in-house corporate PR frequently toss around phrases like “maximizing ROI” or “ROI-driven campaigns.” They may appear business savvy.  But many may not know how to accurately calculate ROI or sometimes even to define it.

The traditional definition of ROI (return on investment) is Gain minus Costs/Costs x 100. To calculate ROI correctly, you must include all costs, including labor costs, material costs, and all other associated costs. You also need to determine the actual revenue produced. That’s not an easy task. Without revenue and cost figures, PR and marketing cannot calculate ROI, let alone optimize it. Some clients don’t provide their PR or marketing agencies with complete revenue and costs figures. says Conrad Saam, founder of Mockingbird, an online marketing agency.

“Which is why, many of them talk about ROI in their marketing copy and pitch decks, but none of them actually report on it in their monthly reviews,” Saam writes.

Don’t brag about improving ROI if you don’t understand the mathematical nuances of ROI or lack the information to compute it, PR measurement experts caution.

“It’s an accounting term. Unless you understand accounting principles you shouldn’t use it,” writes Katie Paine, CEO of Paine Publishing.

ROI Doesn’t Scale

“To be clear, I’m not saying ROI is a bad metric. But it’s misunderstood and often misappropriated,” says content strategist Hannah Smith at Distilled.  “ROI as a metric is only useful (and indeed should only be used) when looking to understand how cost-effectively various tactics have performed historically.”

ROI can reveal the most cost-effective strategy, but may not indicate where to invest more resources. That’s because it doesn’t scale up. Email may generate superior ROI, but endless email blasts might not produce more success. It’s more likely that you’ll annoy subscribers and perhaps prompt them to unsubscribe.

Calculating the ROI for social media activities is especially problematic. Although its direct ROI is elusive, social media provides a number of benefits, such as improved customer service, reputation management and crisis communications.

Lack of Qualitative Insights

Those who focus strictly on ROI numbers can overlook qualitative insights. Achieving the full benefit from PR measurement requires both quantitative and qualitative measurement. Not every aspect of communications can be measured by numbers. How, for instance, does one effectively calculate the financial return on effective crisis management communications? One guess is as good as another, maybe.

Or, how does one put a value on findings from monitoring social media. Reviewing the content of social media comments, can reveal key insights. A single comment or image can lead to important recommendations and business pivots.

Social media analytics provide a treasure trove of data on consumers’ behavior. For instance, a pharmaceutical company found a photo of a man wrapping his leg in foil after applying the company’s pain relief ointment. He did it because the medication left stains that couldn’t be removed from certain fabrics. The photo prompted the company to change its product and improve customer satisfaction.

Many organizations turn to social media monitoring only during crises and the data frequently remain within marketing departments rather than being shared with top managers and across the organization.

“In order to ‘appreciate the qualitative’ and extract meaning from it, managers have to think like anthropologists and jettison many of the scientific principles that underlie traditional hard science research,” a trio of experts write in Harvard Business Review.

Is Computing ROI of PR Possible — or Desirable?

“ROI is a wonderful thing. But it’s not always possible to track every single effort down to a dollars-and-cents return,” states Altimeter Group analyst Rebecca Lieb in an iMediaConnection article. “Often, it’s not possible — or even the most desirable outcome.”

Overemphasizing ROI when measuring PR may hinder branding and storytelling, frets John Hall, CEO and co-founder of Influence & Co. Focusing too much on ROI can prompt top executives to overemphasize short-term effects at the expense of the bigger picture and long-term results, he writes for Forbes.

Sometimes you must read between the numbers, Hall points out. Data can sometimes prevent you from taking your brand to the next level, from establishing your company as a leader in its field and vastly improving the public perception of your brand.

Other performance metrics may be more useful and easier to determine, Lieb says. There are dozens of possibilities. Whatever metric (or preferably metrics) you select to measure results of a PR or marketing campaign, it’s essential to define them precisely and justify their value.

Other Valuable PR Metrics

PR teams can measure earned media activities through other PR metrics such as share of voice, message pull through and brand sentiment. Measurement experts recommend against putting much stock in impressions and urge PR to abandon advertising value equivalence (AVE).

Some media monitoring and measurement services can create customized metrics to match client goals. Clients can specify different PR goals and stipulate custom metrics for each PR campaign to measure impact and value. Such well-designed custom metrics deliver greater insight into success (or failure) than ROI.

Paine suggests PR can compare earned media cost per outcome to the costs of achieving similar outcomes through paid media.

An outcome is something that has proven value to the business, such as generating a qualified lead or increasing preference or renewals. For instance, you can calculate earned media’s cost per message communicated (CPMC) and compare it to the CPMC achieved through paid media. You could also easily calculate and compare the cost of earned media placements per delivered white paper vs. unit delivery cost via paid media.

The key is to match goals to the appropriate metrics. That’s why it’s essential to agree on the metrics at the outset.

If the goal is to communicate messages or introduce a new product/service, CPMC is a suitable metric. Calculate it by analyzing earned media in key outlets for presence or absence of key messages. Divide the total cost of the campaign by the total number of messages.

Bottom Line: Senior management often demands to know how PR and marketing impact ROI. However, it’s not always possible to calculate a valid ROI for PR or marketing activities, and ROI is not necessarily the best metric to assess the value of any given PR campaign. Alternative, thoughtfully-developed metrics that are matched to a campaign’s goals can better reveal impact and value of specific PR activities on corporate success.

This post was first published on June 21, 2016, and updated on Dec. 3, 2018.

 

William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, measurement and analytics solutions across all types of traditional and social media.