One interesting point that came up during negotiations with a prospect that has never paid for PR work is the return on the investment. PR work is not inexpensive, so how does one contrast it with the value of just paying for advertising (commonly known as "making media buys"). A friend and I did a little preliminary research on the matter and found justification for what our gut instinct was telling us. In brief, there is a very real ROI on good PR, but measuring it it is no easy matter, especially if it is not of the "sales campaign"sort with well-defined tracking methods--such as coupon codes. Professionals tell me that the best way, of course, is for the PR client to also fund an outcomes analysis using the traditional market research methods of survey, in-depth interviews, and focus groups. Unfortunately, too many clients are simply not willing to pay the money, preferring instead to pour the cash into the PR itself.
Alas, because marketing budgets tend to be among the softest during recessionary times--like that which we appear to be entering--the pressure to know the ROI on PR efforts without presumably having to pay as much for that research is likely to grow. Don Bartholomew's blog on the matter is actually not a bad place to start to get a sense of where the future may lie.
On the other hand, as my friend and I thought about how to respond to this prospective client, we decided to see if there were any established metrics on the issue. In this case, we settled on an ad equivalency model: how much would it cost to place an ad in a media outlet that would consume roughly the same space as a placed article (a traditional PR outcome)? Here's what my friend wrote--with all names removed, of course:
In answer to _____'s question about the value of a feature in the [newspaper name]'s, please consider this example. The [newspaper name] has a Sunday circulation of over 300,000 homes and reaches 1.1 million adults on a weekly basis. A half-page color ad in the home and garden section or city & shore magazine costs somewhere between $2,000 and $6,000 per placement. Though it is a rough metric, generally speaking the Media Equivalent for a feature story or editorial is 1.5 to 6 times the advertising value, meaning being featured could be worth as much as $36,000. Companies often reinforce PR efforts with advertising and product placement to build on the name recognition they receive from PR. Another particular advantage to getting stories placed is that people clip and email stories to friends and colleagues.Not a bad analysis, I thought. Of course, 1.5 to 6 times the advertising costs is an enormous range, and, as mentioned already, PR campaigns are not necessarily cheap. On the other hand, what my friend failed to mention is that this was the equivalence of one placement. Since our proposal envisioned several placements, we figured the value for money would be well worth it, depending on the degree of success in placing stories--and that in itself would depend on the quality (and track record) of the write-up and story pitches.
I should add, however, that the debate about ROI on PR is lively. I picked up a few interesting exchanges from or by professionals here, here, and here.
Of course, need I add that all of this has been problematized most recently by a student of the Institute for Public Relations in a study posted here?