Evaluating the Business Value of PR

Companies must focus on audience perceptions and behaviours, not coverage

What value is press coverage if it is: (1) not on message(2) not read by a company's target audience and (3 – most importantly) does not change perceptions and behaviours of that target audience?

Now more than ever PR practitioners – both in-house and external – are having to prove the value for money of their services. This has come about due to factors such as: 9/11; the dot.com bust and general slow-down in the economy; the business trend towards proving a return on investment, and increased competition from new entrants moving into PR territory, such as management consultants. This is causing PR and other marketing disciplines to fight for budget. PR has always been the poor relation in the area of evaluation compared to other marketing disciplines and this is a key reason why it does not command a greater share of marketing spend. Evaluation is essential for a number of reasons, to include:

1. To prove value and contribution to strategic business decision-making

   To prove efforts are being focused in the right area – i.e. you are doing the right thing, in the right places

   To build the credibility of the profession as a formal management discipline within the boardroom

   To better define future strategies, including messaging and targeting

   To defend budget from other marketing disciplines

2. PR is a buyer's market and clients or internal board are demanding their PROs prove they deliver value for money

The reasons for evaluation are self-explanatory and looking at the research and opinion in the market, it is much desired and frequently applied by PROs, with many claiming to spend 10% of the PR budget on evaluation. Despite the talk, there is a shortfall in use of tools or techniques which realistically evaluate the impact of PR on the bottom line. As part of my MBA dissertation: “Evaluating the Business Value of PR”, I conducted qualitative interviews among 15 PR consultancies. 100% of these admitted to still using advertising value equivalents (AVEs) to calculate the value of their work and for all the evaluation focus was on evaluating outputs: AVEs; OTSs; event attendees; website hits; etc. To be fair, the evaluation of these was increasing in sophistication, with tone, message, context now also being measured. Several offered out-take evaluation through perception studies, but admitted that these were infrequently used, and only one consultancy offered output, outtake and outcome evaluation, measuring every aspect of reputation, including financial performance, vision and leadership and corporate social responsibility, but stated that no clients used this as it was too expensive. As such, for me users of PR evaluation currently fall into three camps:

• The no can do camp - how is evaluation done for something as complex as PR, which includes such breadth within its disciplines and is so riddled with intangibles and uncertainties?
• The faint effort camp – who believe they are evaluating PR, but in reality are only scratching the surface with their application of deliverables, AVEs, OTSs, etc. and are not really gauging impact against the bigger picture of business objectives
• The frustrated camp –   there is a desire to evaluate properly, but it is difficult without an accepted unit of PR currency and the solutions that do exist frequently cost the earth. This need not be the case – I propose we all adopt perception studies!

To be taken seriously as a management discipline, PR needs to mature its evaluation techniques with less focus on what was written - (after all, media evaluation at its simplest level is only capable of providing a measure of output) and more on the impact of what was written (for media relations) and what audiences think (for broader public relations activities). This looks at investigating whether the message has been received, understood and whether it has made an impact to the extent that it may change audience opinion or even buying behaviour.   Perception studies themselves can include:

• Familiarity and favourability studies conducted across one or a range of target audiences, to include: press; prospects; employees; partners; customers, etc, gauging awareness for   and favourability towards a company and its brands and policies
• Behavioural shifts gauge changes in behaviour as a result of PR activity, including paradigm shifts and attitude changes brought about by companies' communications policies, as well as their offerings
• Brand association – how the brand or sub-brands are viewed in isolation and vis-à-vis competitors
• Perception landscapes allow for more in-depth investigation into audience understanding of the company, its offerings, the market, etc

They are most beneficial when conducted on a regular basis among set target audiences to enable trend analysis. Some PR companies do offer such studies in house, but the results are subject to bias and too frequently are put on the back burner in favour of more pressing PR activities and so happen irregularly, if at all, especially if to be conducted within the retainer. Some large market research companies undertake such studies on request, but can be prohibitively expensive – we received quotes ranging from £6,000 through to £18,000 for the completion of 50 ten minute interviews among prospects. In reality there is no one simplistic method for measuring PR effectively – an array of different tools and techniques is needed to properly assess PR impact, but surely if budget is finite, it makes sense to spend it finding out what your target audience really thinks about you and addressing issues accordingly, than measuring the length, placement and tone of an article.

I don't doubt that through the use of such studies, there remain concerns whether perception and behaviour changes are purely as a result of PR activities, or moreso impacted by the full range of marketing activities, but these are steps in the right direction. Besides, can advertising always separate out the impact of PR? I think not!

Engagement Marketing

From 1990 to 2000, worldwide PR revenues increased by 250%, and despite a slight downturn after 9/11, that rise has continued into the 21st century. The success of companies such as Google and eBay, who have invested little in interruption advertising, has demonstrated that cleverly promoted PR messages have a prominent place within today’s business market. The question that this piece will address is why PR and marketing have achieved success in the space that advertising has traditionally dominated.

PR and marketing firms offer what has become known as ‘engagement marketing’. Advertising firms offer a quite simple interruptive sales pitch, telling consumers what they should be buying. Engagement marketing is a subtler offering, aiming to engage with consumers through a number of media, eventually engaging the consumer on a personal basis. Engagement marketing is built upon the power of the meritocracy of ideas, and the strategic combinations of various media to propel that idea into the world. By offering newsletters, events, white papers etc, the marketer is aiming to engage the consumer in a non sales-related dialogue that will bring an offering to the consumer that they will be genuinely interested in and will benefit from. By creating brand understanding and interactive communications, the marketer can constantly evolve their offering to match their target audience. Part of this relates to the potential that engagement marketers have to respond quickly to events, to bring their offerings in line with the constantly changing demands of the consumer or business marketplace.

In the twenty-first century, advertising has reached saturation point. Both businesses and consumers have become weary of interruptive advertising, with constant exposure to advertising leading to both consumers and businesses becoming apathetic and indifferent to the advertising that they constantly face. The constant bombardment of advertising does not breed a discerning consumer, but one that chooses to reject the vast majority of products that are literally put right in front of one’s face (witness people’s frustration with on-screen pop-up advertising, particularly that which hides a web-site that one wants to view). Recent research by Proctor and Gamble showed that in 1965 80% of adults in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime time commercials to produce the same result. Within the last four years that number would most likely have risen further.

So if people do not want the direct sales approach, that leaves the tantalising question as to how to attract the attention of either a business or a consumer. One lesson that advertising has taught public relations is the key role that is played by the identification of the target audience. Public relations and marketing has now taken this to a new level. Customers will favour a brand that has provided them with something from which they can benefit, be this knowledge or a service. Freebies, for example, are handed out to increase brand recognition, as part of an overall drive for an individual product to be recognised within its desired marketplace. The variety of non-sales offerings that public relations offers should bring the customer something that they desire. This can then lead to a focus on the individual as a prospective client / customer, for they are the people who turn up to the event / sign up to the weekly newsletter etc. The audience can be targeted very specifically based on their previous uptake of the services offered by the marketer.

Whilst interruptive marketing and advertising attempted to change beliefs through image building, engagement marketing changes behaviour through involvement. The mutually beneficial offering provided by engagement marketers can cause a spreading of the word regarding the service offering, thus creating a word-of-mouth craze. Engagement marketing involves the customer beyond short-term cycles of interruptive marketing campaigns. An example is the Arctic Monkeys, whose free offering of their songs on-line led to word spreading of the band. They recently smashed the British record for the fast-selling debut album, selling over 300,000 copies in the first week that their first album was released.

Interruptive marketing and advertising is about speaking at people. Engagement marketing is about conversing with people. By establishing relationships, developed through a path focused on mutual understanding, engagement marketing can create ideas that can emotionally engage with an audience. In the modern age, when increasingly temporary fads are predominant in society, engagement marketing provides macro ideas that are broadly over-arching and micro ideas that can change from day-to-day.