Proving the Value of Public Relations

This is a guest post from my research & measurement colleague at GCI, Wilson Tan

Public Relations is not the only industry in search of the holy grail of ROI. This past Saturday’s Weekend Journal (The Story That Stats Don’t Tell, http://online.wsj.com/article/SB114504083095226278.html?mod=todays_us_pursuits - subscription required) profiled the NBA’s search for their breakthrough statistic.Statistics happy MLB has fallen in love with VORP (Value Over Replacement Player). It measures how much a hitter or pitcher contributes compared with a fictitious replacement player with average skills. Here are two metrics in play with the NBA:

Plus-minus Rating: How many more or fewer points than the opponent a team scores when that player is in the game

Player Efficiency Rating: Measures a player's per-minute productivity using both positive contributions (like assists) and negative ones (like missed shots)

The NBA also has some of the same challenges as Public Relations in understanding intangible value. Sonics CEO Wally Walker says the team's fortunes this year (poor compared to last year) show that statistics are hardly a panacea. "Our chemistry isn't nearly as good this year as it was last year," he says. "It's hard to hang a number on that."

If the NBA, in an enclosed arena of 94” by 50”, has a struggle defining a breakthrough statistic, no wonder we in PR struggle with the much bigger arena of the real world.

- Wilson Tan

For years, the public relations profession has bemoaned the fact that it did not have a seat at the executive table.  But in the post-Enron era, there is ample evidence - anecdotal and quantitative - that the communications function has finally climbed the hill.  Here’s just one data point – in a study of executives conducted by the American Advertising Federation (www.aaf.org), respondents were asked which departments were ‘Most Important’ to their companies.  Public Relations finished third, behind only Product Development and Strategic Planning, and ahead of powerful corporate functions such as R&D, Financial Strategies, Advertising and Legal.  Go ahead and gloat a little that an AAF study found PR more important than Advertising.

Now that we have a seat at the table, we need to change our games to flourish in this environment.  We believe there are three fundamental requirements:

1.      Need to put PR in the context of the business – demonstrate how PR is helping to achieve corporate objectives

2.      Need to speak the language of the executive suite – and to some large degree that means quantification and metrics

3.      Need to be more accountable for results.

Let’s pick up on the second point.  The majority of public relations professionals are words people, not numbers guys.   For most of us, the Right Brain rules.  In the new environment, it will be increasingly important to get in touch with our Left Brains and enhance our comfort level with numbers, logic and analysis.  This is true in how we talk about PR problems and opportunities and well as in the reporting of results.  Consider this one simplified example.  The CEO calls you in to ask your department to address an employee attitude issue that she believes is causing high levels of turnover.  The traditional response may be to do a survey of employees to confirm the attitude issue, and then develop an employee communications program to improve attitudes.  You then attempt to sell the program to the CEO based on past successes you have had in similar situations.  In the new environment, you might still do the survey, but also supplement it with data about employee retention rates, costs to acquire new employees and costs to train them properly.  When you go back to the CEO, you are able to confirm the problem by saying, “Yes, we do have a problem, in fact, we estimate it is costing the company $3.1 million dollars per year.  We believe this PR program will impact about a third of this total, saving the company a little over one million dollars.  This represents a ROI of over 300%.”  Just think how much more powerful our position becomes (and how much greater our chances of getting budget approval) when we are able to quantify the problem in language that is comfortable to the CEO.  Get in touch with your Left Brain.