Wednesday, January 8, 2014

What is the true value of PR?

In our last post we mentioned how it is difficult to place a number value on public relations. Determining this dollar value is something that has challenged PR executives and clients for years. Understandably, businesses want to put a dollar amount on PR to be able to determine the return on investment. Mark Nolan of PR Newswire put it well when he said, “the task requires you to objectively analyze something that is largely subjective."  The tactics used to evaluate PR results have significantly changed over the passed few decades and understanding these changes are important to effectively determining PR results. 

Traditionally, the Adverising Value Equivalency (AVE) was used to calculate the monetary value of editorial placements. AVE is calculated by quantifying editorial placements with the corresponding ad rates. Some applications of this system add multipliers to the equations, as research show editorial is more effective and credible than advertising.  For example: a company receives an editorial placement in a magazine that is 7.5 inches by 4.5 inches. The ad rate for that dimension of $285 so, per AVE, you would multiply 7.5 by 4.5 and then by $285 equaling $9,619. Next an average multiplier of 3 is added to this equation resulting an advertising value equivalency of $28,856.

While the most practical for those not marketing savvy, the Advertising Value Equivalency is being phased out of the PR industry. Why? Because AVE does not show the outcome of a campaign, it limits the results to received media placements. AVE cannot distinguish between placements in relevant and less relevant publications. This system also fails to recognize the value of bloggers and social influencers. Overall, AVE is a very narrow way to assess the outcomes of a strategic public relations campaign.

Though a little less black-and-white in terms of dollar value, the most effective way to determine the value of public relations comes from the International Associations for the Measurement and Evaluation of Communications. The AMEC suggests measuring communications on three impact levels: outputs, outcomes, and business results. 

  • Measuring outputs shows how well your message impacted your audience and how much of your audience you reached. 
  • Measuring outcomes determines how your communications affect consumers’ awareness and attitudes toward your brand. 
  • Business results measure how your communications impact your revenue, market share and the over all value of you brand.

These results are determined by measuring the number of impressions achieved by a campaign and analyzing the quality of media placements achieved. This method also suggests using PR questionaires and tracking surveys to determine how the audience perceives your brands messaging. 

While many clients still ask for AVE numbers, we encourage any business considering a PR campaign to understand the importance of the AMEC method because it not only measures the quantity of placements, but also the quality of the placements, giving a well-rounded assessment of a PR campaign.

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