Public relations activities that lead to stories in the media generate a greater return on investment than strategies in a marketing campaign including advertising in newspapers, on television, radio, outdoor media, direct mail coupons, sales promotions and contests.
In his book, Unleashing the Power of PR, Mark Weiner provides scientific proof that PR generates measurable benefits by applying the idea of return on investment, or ROI.
Turn Marketing ROI Into Public Relations Return on Investment
Using ROI makes good business sense as the term is common among financial professionals as a tool to measure the economic benefits of business activities against costs. For PR, the cost of conducting media relations campaigns are measured against the business outcomes.
PR professionals are encouraged to use ROI as a strong tool to prove the value of media relations activities to an organization’s bottom line. Key to calculating ROI for public relations campaigns is setting measurable outcomes to PR activities.
One way to measure ROI is to link strategic communications and public relations activities with sales. The first formal case of this form of analysis came in 1999, when AT&T used statistical analysis of its marketing performance and uncovered a surprising result: public relations, more specifically media relations, generated just as many new long-distance customers as advertising even though the company invested substantially more resources in advertising than in PR.
Also, public relations lifted other forms of marketing, allowing the company to leverage its advertising when news about AT&T was positive. The result was more productive outbound telemarketing and more effective inbound telemarketing.
AT&T then changed the way that its marketing and PR professionals planned activities.
Public Relations Strategies Improve Marketing Performance
Communications measurement guru Katie Paine notes the continuing trend of an integration between media analysis, survey research and behavioral measures to show the connection between communications and desired outcomes. She points to Southwest Airlines, for example, which used website analysis to demonstrate that media releases drive sales.
Media Relations Boosts Marketing Strategies
Another example is Post Cereal, which lowered the cost of cereals by eliminating coupon promotions. The announcement of the decision was made through the company’s PR department and the news received widespread media coverage.
Without advertising or in-store promotion, the brand’s market share jumped by several points within weeks of the PR announcement. The budget for the media relations campaign was the cost of a press conference, a few press releases and the PR agency, which could be estimated to be a small fraction of the multimillion lift in sales that it triggered.
With the unique ability of public relations to tell an organization’s story at low cost, the ROI on PR is earning more attention among marketing and PR professionals. The power of media relations clearly shows in bottom-line results.