PR & Communications News South Africa

Financial ROI only tells half the PR story

Financial return on investment is a necessary metric to assess the value of PR coverage but it may not the best way to express PR value, according to Grant Henry, Account Director at Lange Communications.

Lange PR is one of South Africa's most influential communication
consultancies and was independently rated as the best medium size agency in 2002. Lange PR clients include: Santam, Coca-Cola, BP, Brandhouse, BoE Private Clients, Sotheby's International Realty, Levi's and Foschini.

Says Henry, "For most PR campaigns, measuring purely in terms of the advertising value equivalent isn't appropriate - it can be misleading and even damages the PR effort because it reinforces the idea that PR is just free advertising.

"There is a considerable lack of consensus about the detail of how PR return on investment can best be measured and reported. Practitioners use the term 'return on investment' to mean a wide range of measures, not all of them financial, indicating that developing a universal measure of PR based on ROI terms is unlikely to be the best solution. It's also makes it difficult for clients to asses what is being achieved because some PR consultancies will compare the value of editorial coverage to advertising on a one to one relationship while others use a multiplier.

"The industry has worked tirelessly to win recognition that PR's role in reputation and issues management puts it at the heart of strategic management. We need evaluation tools that reflect the range of PR what can achieve and we need to educate employers and clients to understand, that this generally isn't best measured in the editorial coverage achieved."

Henry advocates that practitioners should move towards more sophisticated 'evidence-based' PR that is measured according to the difference it makes to business and organisational objectives. This will more appropriately reflect the complex and wide ranging objectives that are set for public relations.

"Evidence based PR measures whether the message has been understood and acted upon by its audience, the quality of the relationship an organisation enjoys with its stakeholders and assesses organizational reputation benchmarked by audience groups.

"South African PR practitioners need to capitalize on the growing PR spend and ensure we can not only measure the value of the coverage but also if the message has been received and understood. PR practitioners who simply deliver ROI numbers are short-changing their clients."

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