OPEN

I really like a the PR evaluation approach from K D Paine, a blogger who runs a specialist measurement firm in the US, for the simple fact that it lines up PR alongside advertising and gives us a stick to beat our own drum with in a more meaningful way than advertising equivalency (where you work out what coverage would cost to buy and adjust to taste or prevailing equations). Ms Paine calls the
methodology PRV or PR Value Ratio.

Does it really work? What would a cynical marketing director who has built a career on high ad spend budgets have to say?

Here’s the nub of Katie’s methodology in an example she draws:

 

A typical KDPaine & Partners client places or earns 1000 articles a
year. Of those articles some 30% or 300 contain the company’s key
messages. Of those 300, typically 80% or 240 appear in key publications that reach the target audience. For the sake of this example, lets assume that you if add up the audited circulation figures of the publications in which those 240 articles appeared, you’ve reached 5 million eyeballs with your key messages.

Now take the annual PR budget ($100,000) and divide it by 5 million. You get a cost per key message communicated of $.02. Typically advertising looks at CPM which is cost per thousand people reached, so you would multiply the $.02 by 1000 to get a CPM of $20 per thousand people reached with a key message.

Let’s now assume that the advertising budget is $1 million a year and

according to the media plan, the combined reach and frequency resulted in 5 million people seeing the organization’s key messages via paid advertising. That’s a CPM of $200 – in other words PR has delivered the same value for a tenth of the cost – or a PRV of 10:1.

Looks good to me. But I’m sure  that there are some holes here, surely. It can’t be this easy can it? Will a report like this have CEOs across the world demanding that the PR budget be quadrupled immediately?

In other words, values and ratios barely scratch the surface of measuring effectiveness, and thus are often meaningless to executives.

: : John Wagner takes issue with the whole idea of ratios as not really measuring
outcomes – i.e. changed perceptions and behaviours in target audiences.
A good point, but  "equivalency " is often demanded by clients who need
justify PR spend against advertising or direct mail, for instance.

Also once you get to looking at outcomes, it can be hard to separate
out the impact of advertising and other marketing communications from
PR. PVR sounds like a good way of measuring immediate bangs for bucks,
as it were – at the very least it could be a valuable extra tool for
demonstrating value to clients.

[Footnote: I do subscribe to K D Paine’s blog, but again read this first on the redoubtable Mr Holtz’s blog.]