RESEARCH & EVALUATION: Stand & deliver - Return on investment is the Holy Grail of measuring the effect of public relations. Mary Cowlett reports on how recent techniques have helped the industry show value

Research and evaluation is about proving the effect of PR on the

bottom line, and there are now methods being pioneered that do just

that. The most recent version of the IPR's research and evaluation

toolkit, PRE-fix, states clearly that the goal of proving the

effectiveness of PR must be illustrating ROI in clear financial terms.

This, of course, translates into terms of a move in share price or

sales, to name just two objectives that PR is capable of reaching.

The most basic - and erroneous - attempt to prove ROI is, of course,

advertising value equivalents (AVEs), which equate column inches of

editorial to advertising value.

For example, one PR executive tells of a recent three-month stint spent

with a ruler and calculator, working out AVEs on visuals from press

cuttings: 'Even I could see that it was madness to equate the size of

spokespeople's photos with how much it wouldhave cost the client to buy

similarly placed ads - and I was only on workexperience.'

The methodology of AVEs have been discredited further, for failing to

take adequate account of editorial-only media, such as the BBC, and

creating the false impression that PR is simply cheap advertising.

But even some of the more robust methodologies can prove tricky when

thrust into the wrong hands. For example, enormous strides have been

taken by the specialists to improve the quality and relevance of media

analysis. Service providers have introduced favourability and

share-of-voice systems, frequency ratings and even the tracking of

individual journalists. Yet too many organisations look no further than

their cuttings books and still regard media coverage as an end in


'Value should extend well beyond media "hits" to include a combination

of aspects, such as where and when an item appeared; the degree to which

the message has been understood and acted upon; the significance of the

medium; the share of voice and comparisons with competitors, and the

comment or opinion generated,' says Jon Aarons, IPR president and

Financial Dynamics partner.

'These factors combined can enable media evaluation to assess the core

drivers informing organisational reputation, and in comparison to

competitors,' he adds.

Indeed, as proving ROI increasingly becomes the Holy Grail of the PR

industry, PROs need to measure their worth against hard business


For example, PR agency Northern Lights worked with Townsend Fine

Jewellers, a Yorkshire-based retailer, to boost sales and more

specifically position the jeweller as first choice for engagement rings.

This involved a range of initiatives, including working with staff,

rebranding and generating extensive coverage in tightly targeted


At the end of the exercise the PR team was able to put a financial value

on its efforts and prove that it had met the original objectives.

Figures showed that overall sales had risen by 28 per cent, while sales

of engagement rings had increased by 90 per cent (see panel, p12).

However, not all PR objectives are based on sales and not all activities

have a defined start and finish. Demonstrating ROI against the

day-to-day intangible assets that comprise reputation is a far more

demanding task.

Global media analysis company CARMA International has recently gone some

way to address this issue by introducing an online tool that evaluates

coverage against share price.

Used by firms including the Royal Bank of Scotland, Nokia, Ford and

Dell, Carma imMEDIAte monitors more than 750 of the world's leading

companies in 100 global media outlets, analysing coverage by volume and


Costing $200 a month for regional access and $400 for

global access, information is uploaded each night in the US, enabling

subscribers to track how reputation evolves over time and how media

image affects their own and their competitors' share price.

'We found that what large corporations need is faster real-time news

analysis that is available at their fingertips on a global basis,' says

CARMA International European MD Tom Vesey.

But as media coverage continues to be the major and most visible element

in most PR activities and its evaluation usually regarded as a key

success indicator, organisations need to gain more value from their

media analysis.

For example, according to PR R&E specialist Metrica, Abbey National's

online banking arm Cahoot evaluates media coverage against the number of

new accounts opened each day, while Orange tracks coverage against the

cost of its sponsorship of the Arrows Formula 1 racing team.

'The really forward-looking companies, such as Dresdner Kleinwort

Wasserstein, use media analysis as a strategic business tool,' says Mark

Westaby, Metrica joint MD and chairman of AMEC (Association of Media

Evaluation Companies).

'By integrating their coverage data with other information available

internally, they complete the jigsaw and use that insight to inform

their forward planning,' Westaby adds.

But many feel that proving ROI for PR is only meaningful if you can look

at the return in context. During the past two years, Manning Selvage &

Lee has built an R&E tool, i to i tracker, which is based on a database

of studies conducted for clients including Procter & Gamble, the Health

Education Authority and money transfer specialist Western Union.

Developed in association with Research International, i to i claims to

be able to isolate the PR effect. 'For consumer brand marketing and for

those campaigns where the objective is to generate sales, we have found

that consumers who have been exposed to the brand PR activity are more

pre-disposed to the brand than those who have not, and we can quantify

that,' says i to i tracker research consultant Ruth McNeil.

One of the tool's main advantages is comparing levels of ROI with

industry norms. 'Using normative data provided by the i to i tracker

database, we can assess how the (PR) ROI stacks up with other campaigns

in the same area,' says McNeil.

Like many of the other R&E tools on the market - including the WPP

Group's PRecision - i to i uses the fundamentals of reach and frequency,

borrowed from the advertising industry. This development of the more

useful areas of interaction between PR and advertising is something

endorsed by the joint IPR and PRCA online planning, research and

evaluation initiative PRE-fix. 'For example, PR activity should seek to

draw lessons from advertising's research emphasis on how to influence

perceptions, attitudes and behaviour,' says PRE-fix chair and Weber

Shandwick Worldwide director of European strategy, Chris Genasi.

To this end, PRE-fix has posted a wealth of advice and case studies on

its website, designed to educate both consultants and clients. In

addition, this year PRE-fix will be undertaking a research project into

the long-term influence PR gains over and above advertising and

marketing. This must be more rigorously rationalised so that clients and

decision-makers can be informed about the longer-term ROI contributed by

PR, according to Nigel O'Connor, PRE-fix member and IPR head of


However, the real proof of R&E is how far it meets the demands of

clients and the evidence suggests that many are far from satisfied. Last

November, GCI Europe conducted a study of PR chiefs from 20 leading

global brand-owners to uncover how PR evaluation measures up to their


This revealed that while nearly all respondents believe that monitoring

R&E is crucial to the future of the PR industry, half do not evaluate

ROI on a formal basis. 'It is felt that the evaluation methods currently

available in the marketplace are extremely expensive and time-consuming,

making it impossible to calculate ROI for all but a handful of specific

PR activities,' says GCI Europe chairman Adrian Wheeler.

Crucial criticisms from the report included the costs and time involved

in establishing 'imprecise' findings, the 'patchy' nature of evaluation

tools offered by agencies, and a suspicion that many proprietary

products are simply revenue generators for PR firms. 'However, most

companies believe it is essential to understand exactly what PR is

delivering to a business's bottom line, stating that PR staff need to

fully understand the financial goals of the company and the obstacles

that might impede success,' adds Wheeler.

There are, of course, exceptions and some global brands positively

embrace a culture of ongoing measurement. AOL UK chief communications

officer Matt Peacock describes his firm's MRE (monitoring, research and

evaluation) system as a 'forward-looking radar screen'.

Spending more on MRE than it does on bought-in services from its PR

agencies, AOL continuously monitors customers, analysts, and competitors

to help its business strategy.

The data is also shared among the whole company and not just the

communications team, adds Peacock.

Eighteen months ago, this approach enabled AOL to take ownership of the

goodwill surrounding Oftel's reform of flat-rate internet access, and

more recently gauge fluctuations in consumers' enthusiasm for broadband


But Peacock remains unconvinced that anyone will ever be able to deliver

a satisfactory solution to linking PR directly to hard objectives such

as sales: 'It's tough to measure ROI from PR in terms of pounds,

shillings and pence, but then it's also tough to measure that on the

advertising side.'

However, where the PR industry is making huge strides in demonstrating

tangible business advantages is in influencing firms' ability to


'For the global brands, there is huge financial value attached to the

price of their licences to operate in new markets,' says John Mahony,

Edelman PR Worldwide UK chief executive. He explains that this enables

corporate PROs and public affairs practitioners who influence

legislation to their client's advantage, to place a hard financial value

on what they achieve.

'Whether it's through corporate reputation and social responsibility

programmes or traditional lobbying, this throws up key performance

indicators around how much business companies can then do for free and

what that is worth in commercial terms,' says Mahony.

In other words, the real secret of measuring ROI is to establish what

needs to be achieved at the outset and judging value by how far these

objectives have been met. Ogilvy PR Worldwide MD Rob Schimmin says that

he goes so far as to ask what shape PR success will take, at the initial

pitch. 'PR for its own sake is not valuable PR,' he adds.

However, there is a danger that PROs could become too bogged down in

trying to put an exact financial value on their time and effort.

Independent consultant and author of The IPR Toolkit - Planning,

Research and Evaluation for PR Success, Mike Fairchild, says: 'It is

possible to create a link between PR and the bottom line, but you

shouldn't strive to work out ROI to the last penny, as the cost may

outweigh the benefits.'

But as budgets tighten and the downturn kicks in, ROI and value for

money have become crucial factors. Continuing to improve the techniques

used to measure PR will drive better informed decisions and could

justify further investment in the communications process.


Townsend Fine Jewellers is a Yorkshire family business, which has been

trading for more than 40 years. In 2000, owners Nigel and Mike Townsend

recognised the increasing competition from the high street, TV shopping

and the internet and approached Harrogate-based Northern Lights for


The agency worked on a SWOT analysis with Townsend and conducted market

research among existing and potential customers to examine market and

purchasing trends.

This was then used to establish the PR objectives. The aims were to

rebrand the business; make the jeweller first choice for engagement

rings in the local area; improve customer service; offer a series of

unique products and services, and above all, increase sales.

The customer research was then used to inform strategy. The findings

revealed that the retailer needed to add some humour and a more

contemporary feel to its existing professional image. Therefore, the

first stage of the relaunch focused on a new brochure entitled 'Will you

Marry Me?', which on its cover, featured a cartoon of a knight in

shining armour.

This idea was developed further for Valentine's Day and Leap Year's Day,

in a competition set up with the Yorkshire Post. To publicise the

jeweller's new engagement service, readers were encouraged to nominate

their Most Romantic Knight in Shining Armour.

In addition, Northern Lights positioned February as 'The Month of

Romance', offering shoppers entry into a draw for a weekend at Le Manoir

aux Quat' Saisons in Oxfordshire.

Activity continued in 2001, with editorial competitions to find

Yorkshire's Most Romantic Engagement Story and a prize draw to win lunch

for two and a helicopter flight across the Yorkshire Dales, piloted by

the 'flying jeweller', Nigel Townsend.

The launch was an outstanding success in the key area of sales. The two

shops, whose original target was to sell one additional engagement ring

per week each, doubled their target. Sales for Christmas (when most

jewellers achieve 50 per cent of annual sales), were up by 28 per cent

for 2000 and a further eight per cent for 2001.

In addition, the Month of Romance 2000 translated into the most

successful Valentine's trading ever - 27 per cent up on previous years -

and was sustained at this level for six months.

According to Townsend owner Nigel Townsend, success came from building

PR around business objectives.

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