How Do You Evaluate Public Relations ROI?

5th September 2014

I’m sure that many of you are Public Relations students like me and assignments must be piling up in the coming week! Well, if you are looking through the unit outline of what is expected of a PR Plan, I’m sure you will see the aspect of measurement and evaluation.

This section in any assignment always brings a cringe – I’m confident that I’m speaking for everyone that the usual standard answer for every assignment that addresses this aspect is that ‘we aim to have high social and traditional media coverage amongst media outlets…’ Theoretically, that sounds like a perfect measurement and evaluation tool for success of a PR plan – a dream come to realization! But realistically, how do PR firms measure the success of a PR activity or plan that is being put in place.

Let me just draw a simple example for you. It is in our human nature to know what benefits/drawbacks we gain with every decision made. We can akin the analogy of investing your hard earned money into a bank for investment purposes – How much interest will this bring me and what financial benefits will I attain from this investment?

I’m not an accountant or a banker but what I can share with you is that the analogy above works similarly in a context of a PR consultancy firm. PR consultancies work on the basis of business development and maintaining the relationships with clients by offering them the best value in PR activities. But like all investments, clients wish to know what is their Return of Investment (ROI) in terms of Public Relations activities engaged. They wish to know if it was beneficial for their brand, dollar for dollar and if it helped to elevate their brand identity or reputation within the marketplace.

My first week at Devahasdin started off with the Account Manager asking me the simple question of how I would evaluate the success of a PR campaign. I answered with a simple, ‘I would assume that if the campaign has a high take up rate, it would be deemed successful.’ The next question came – ‘But how do you evaluate this in terms of dollars and cents?’

I was stumped. She further probed with the question of ‘Let’s say if the client invests with a budget of $50,000; how would you report to them on the benefits of the $50,000 invested?’ I couldn’t answer.

That’s where she shared the amazing measurement tool  of measuring public relations effectiveness – the Advertising Value Equivalent (AVE) model. To be honest, I have never heard of this methodology before.

Quoting from my colleagues at Devashasdin, there is an increasing shift noticed in the marketing world – the effectiveness of advertising to consumers is dwindling and the rise of public relations is phenomenal. This can only boil down to the reason that consumers perceive public relations as more reliable than advertising for the essence of PR is getting someone to say and endorse your message for you. 

Imagine this, if you place an advertisement in the papers, consumers might think that you are propagating your product/service but as compared to if your product/service was reviewed or endorsed by an editor/writer – there is a large element of credibility there experienced by consumers and it is free! 

So how does the AVE work? The AVE works on a basis that due to the fact that public relations is perceived as more credible than advertising – it is valued at 5 times (yes, you read it right. FIVE TIMES), more effective than placing an advertisement.

Armed with this mini tutorial, my first task was to create an AVE table listing all the different media outlets in Western Australia and the PR Dollars ($) associated with each article. How I worked this out was firstly, I had to determine the advertising value of a particular newspaper – if I were to place an advertisement in the newspaper, how much would it cost me according to the size and specifications. From there, I had to work on the PR value that it is 5 x higher due to the fact that it is free and more credible. Do look at an excerpt of the table that I was tasked to create below for an example;

I must admit. This is something new for me. I see my colleagues writing their monthly PR highlights for clients where the PR value is way high and it clearly shows that the investment into Public Relations activities is way more effective than that of advertising. Advertising has a diminishing effect on consumers but Public Relations and communications leaves a lasting effect.

So armed with this newfound knowledge, it has certainly helped me because we, as aspiring public relations practitioners, need to communicate to potential clients on the rise and power of public relations as opposed to advertising. The AVE model is certainly a good way to highlight this increase and convince clients that they are definitely getting more than their money’s worth with every dollar invested – meaning that the ROI for a campaign will be high. Now, isn’t that what all clients wish to achieve?

So I hope that by shedding light on the AVE model, it has helped you like it has helped me. You can use this in assignments too! Never blatantly write ‘high media coverage etc.’ anymore! It’s time to show everyone what the benefits and costs are in dollars and cents!

Nicholas Cross

Out of the office - photo shoot

As I’m finding out, my job as an intern is more diverse and very different to what I originally expected. Bauxite Alumina Joint Venture (BAJV), has been very good to me in offering a wide range of activities and jobs you will have to undertake in a public relations field in a small organisation. 

Recently I got to join my supervisor, a photographer and a small team of field workers, set off for Bindoon and Toodyay to take photos of exploration and rehabilitation work.  Unlike my other work throughout this work placement, learning and experiencing what to do with a photo-shoot is nothing that we’ve learnt through the public relations course. I discovered it took a lot of planning and preparation to oraganise occasions like this and you had to be very organized and decisive about what was going to occur. Chantelle, my supervisor knew exactly what she wanted and had drawings and past examples of how it should be situated. Although a busy day, I did find this a great experience, as it was something new and different.  

It was a whole new side to PR and managing the public relations and marketing sector in a small organisation, it was nothing like we have gone through in the course content, as dealing with media but not in depth to dealing with photographers was really covered I found, at least not like what I experienced.  It was really interesting to see how things like that worked out, it was a lot of work by both parties for the photos to end up in advertising materials and on their websites.  

I think this was a great opportunity for me, as we haven’t and don’t do anything like it in the course at uni. It will give me a step up and past experience if and when I have to organise something like this again

Half Done or Half Through?

 The halfway point is always bittersweet. I have been interning four days a week in attempt to catch up since I started my internship so late. My workload at work has increased since I keep asking for more things to do! I want to be able to do as much as I can during this internship because I want to experience as much as possible and to have more to show at the end of it all.

I have done more than just transcribing and planning interview questions and writing articles since the first quarter. I can only say things are definitely getting more exciting now and I am looking forward to the second half of the internship.

I had a taste of some advertisement-writing and sending out of internal emails to promote anti-poverty week. One thing I really like about Baptistcare is their desire to give back to society whenever they can. They support many initiatives and Anti-Poverty Week is just one of them. We held a food donation drive for Foodbank WA and I was glad to see many people respond to the email sent out. It warms the heart to see people caring for the less fortunate in society because we often get so caught up in our lives, we forget there are others out there who need help.

I have also started attending team meetings Monday mornings and nothing makes you feel more welcomed than knowing you are part of a team that works so cohesively.

I got to go out for interviews during the second week and I also got to see some of the aged care facilities. Some of the interviews really moved me and I was just amazed at how strong some people are and what amazing lives they lead. It makes me question what I am doing with my own life and they have inspired and motivated me.

I definitely enjoy the human interaction aspect of my job. I never thought I could work in a desk job but this may have changed my mind because I reckon I have found a good balance between both.

Magazine Executives = Sales Executives

I recently sat in on two meetings we had with magazine publications, ‘Scoop’ and ‘Wedding and Bride’. Lamont’s are looking to place advertisement pieces in print publications to inform readers that Smiths Beach Lamont’s do offer weddings and inform them of how much a wedding package would cost and the various things included within that. ‘Wedding and Bride’ is a longstanding publication in Victoria and has only very recently been transferred over to Perth. It is a directory for brides to be and has everything from cakes to venues to dresses to cars. Therefore it would be an ideal publication for Lamont’s to advertise their wedding packages in. As this was the first ever meeting with an employee from a magazine publication I was very surprised how they acted and how very similar magazine executives are to sales representatives. They came out to the Swan Valley and discussed the pricing of a quarter page, ½ page, single page and double page in the magazine. I didn’t realise just how expensive it is for businesses to pay for advertising and how much magazines rely on businesses to want to appear in their magazines.

Magazine executives are similar to sales executives are they are overall trying to persuade you to purchase “space” in their magazine. They genuinely both seemed very disappointed when we told them we needed to think about if and what amount of space we would like to buy in their publication. Both of the sales representatives from ‘Scoop’ and ‘Wedding and Bride’ knew their publications in great depth and overall believed their publication was the best suit for us. Companies need to think long and hard about whether their target market will read the particular magazine and whether or not it will be worthwhile for them to purchase space in the magazine. The magazines offer monthly payments, which does make it easier for the business, however some don’t offer a readership profile, where we can determine who has purchased the magazines and of what demographic they are. It would be interesting to know who purchased the magazine and who contacted Lamont’s after reading it (either via phone, email or even viewed the website).   

Online advertising really is the way to go when a business is on a tight budget. By advertising over multiple platforms, including print, online, radio and television it broadens viewers chance of spotting the advertisement. However it all comes down to what your advertising budget is and who your target audience are (in terms of what they read, listen to and watch). What is going to gain the most readership and by which group of people? There needs to be some way to analyse this and I realised recently that when you create a business Facebook page you are informed at the top of the page of how many of your Facebook “friends” saw the post, how many of them liked it and how many commented. This is incredibly handy, as it allows the business to understand who views the post and whether they prefer photographs to text (and various other things).  

Overall it was incredibly interesting sitting in on the meetings with the magazine executives as it allowed me to understand how magazines make the majority of their money and how important it is for businesses to advertise over a range of platforms in order to gain sales.