This is the question many in the PR industry want to avoid. That’s because most of the PR industry has been terrible at measuring or estimating its results. Traditionally, PR practitioners measured their success not by ROI but by the number of column inches they secured, or by estimating the “Advertising Value Equivalency”. That’s a measure of how much the coverage would have cost if it had been bought as advertising.
These measures are low-cost ways of measuring coverage, but they don’t tell us how effective PR is at generating sales. Direct marketers, by contrast, know almost to the pound how much return each investment makes.
Increasingly, large companies want to know the return on investment from PR. Since the 1990s “marketing mix modelling” has been used to measure many forms of marketing. Now, public relations is increasingly incorporated into the models. Proctor and Gamble tested the marketing expenditure for six brands and found that public relations gave a return on investment of 275%. For three of the six brands it had a higher return on investment than other forms of marketing, and was reportedly good at delivering a ROI even with relatively small amounts spent.
And there’s an even more striking example from Mark Weiner’s book on planning and evaluating PR. The Miller Brewing Company, part of SABMiller, found that every additional $1 spent on TV advertising for its delivered $1.06, while PR delivered $8. (The company has subsequently changed its advertising agency.) Ranjit Choudhary, the marketing mix modeling specialist for Miller, said in 2003: “We found that PR was much more efficient than other promotions for the brand.”
So public relations delivers sales – at least, when it is done right.