The return on investment of PR has been proven. But rather than showing subjective value using media value or impressions, a small group of leading companies are scientifically isolating PR's economic benefits against its associated costs.
Using new technologies and advanced statistical analyses known as marketing mix optimization and econometric modeling, these organizations have proven what we've always taken on faith to be true: PR delivers a positive ROI and, even better, PR's ROI consistently outperforms other forms of marketing and communication.
But could it be that this "holy grail" is only the first step in an even more elusive process?
In reality, the evidence that's causing such excitement - that marketing and corporate communication generate calculable short-term business results - may also be proving that the effects are too volatile to sustain long-term success. In a time of globalization, commoditization, and changing media habits, PR just might be the secret weapon in the marketing and communication mix.
If the ROI is good, what could possibly be wrong?
Marketing mix models only reveal sales effects in the short-term. In that context, sales can be a capricious measure. It's easy to boost volume in the short term using three-for-one offers, but brand profitability suffers. What's more, price promotions stop working once the offer ends. Mass-market ads aren't much better: effectiveness declines dramatically after just two weeks.
PR, on the other hand, impacts sales for a relatively long time. But even if PR continues to drive sales for six months after the campaign, that's relatively short-term in the life of a brand. The problem is that while brands certainly are reliable, people are not: In fact, we're trained to compare; to "price-shop;" we are disloyal unless given reasons to act differently.
Now that corporate and marketing communication performance can be measured in terms of ROI, it's time to take it further. The good news is that no agent is better suited than PR.
The fact that PR can drive business results is good, but other forms of marketing and communication effectively drive results, too. But PR, which is predicated on building meaningful, lasting relationships at the same time it delivers the best ROI, is uniquely positioned to drive the meaningful interaction that builds the world's most successful brands.
PR works particularly well because it delivers such high levels of involvement and credibility with an ROI that others envy. Now, as organizations look to invest their resources on the basis of "what works" rather than "how we've always done it," PR is primed for explosive growth.
While alluring, incremental revenues are one ingredient in profitability, and lasting brand and financial equity. At Ketchum, we know that PR is indispensable for building reputation and we know how companies and brands with good reputations enjoy many benefits over those which are lacking: they enjoy premium pricing and are rarely discounted; they benefit from greater loyalty because they actually mean something to people; and they get the benefit of doubt during hard times because they've earned the public's trust. These characteristics, when properly managed, are enduring: they are distinctive, they are involving, and they build prosperity.
Mark Weiner is SVP and global director of the Ketchum Global Research Network.