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
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
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
'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
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 - A MONTH OF ROMANCE
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
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
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.