Documenting the Business Outcomes of Public Relations

PRSA Measurement Working GroupDraft September 1, 2009

Chair: David Rockland, Ketchum Pauline Draper-Watts, IPR Commission Chair Katie Paine, KD Paine & Partners Mark Weiner, Prime Research Don Wright, Boston University

1

Purpose

• To support the business case for public relations by documenting recommended metrics and measurement approaches for four types of business outcomes:

• Financial• Reputation / Brand Equity• Employees and other Internal Publics• Public PolicyNote that there are four types of business outcomes, one

often connected with another. While not covering every conceivable business outcome, the authors feel that the vast majority of results are included.

2

A Caveat• This document describes PRSA’s recommended lexicon

and measurement approaches to determining the effects of public relations on business outcomes. It provides the answer to the question “what do you make when you make PR?”

• It reflects the initial work of the authors noted on the cover, contributions by PRSA staff, and extensive commentary and ideas from a wide range of PRSA members. The authors are all members of the Institute for Public Relations (IPR) Commission on Public Relations Measurement and Evaluation and have sought to bring IPR’s perspective to this work

• It is not a recommendation or endorsement of any particular research or measurement provider or company.

3

Before You Measure, Set GoalsBy Answering Four Questions

Goals should be Relevant, Realistic, Specific, Measureable, and Timely

• Whom are you seeking to affect?

• What about them are you seeking to affect?

• How much is a successful affect?

• By when will this affect have occurred?

4

Your Role / Responsibility

• Put the goals of your PR Program into business terms• Document a clear set of objectives that are measurable• Ensure adequate budget before the project to measure.

Use measurement to prescriptively change and improve the PR program

• If your experience in measurement and research is not extensive be prepared to include a measurement specialist in your plan

• Shift the conversation about PR away from the volume of clips, social media activity, AVE, etc, to how outcome measures showing how PR drives business performance

5

How PR Impacts Financial Performance

• Generates Revenue, Sales, Profit• Marketing Public Relations drives sales• Investor Public Relations drives investment• Public Relations drives donations & membership for

relevant organizations• Drives Efficiency

• Better audience targeting• Reaching more people with a credible message for less

money• Avoids Catastrophic Cost

• Quality counsel helps to mitigate impacts of crises6

Measuring PR’s Contribution to the Bottom Line• Revenue Generation

• Consumer Response: Field survey of consumers, determine purchase levels and exposure to PR results, isolate causal effects through statistical analysis

• Market Mix Modeling / Econometric Modeling: Gather PR output/outcome data in conjunction with other marketing activity by market, by marketing function, by region, by time period and factor by revenue-generation by market, by region and over time. Apply regression analysis.

• Efficiency• Determine comparative cost of different communication approaches; calculate percent of

target reached; determine change in purchase cycle resultant from PR activity• Catastrophic Cost Avoidance

• Assess competitors and peers who may have faced similar crises, track emergence of their crisis and impact on sales, stock price and relevant business measures to evaluate the potential impact that was avoided.

7

How PR Positively Affects Reputation / Brand Equity• Increases likelihood to purchase / consider your brand(s)• Minimizes the effects of a crisis • Reinforces communication of organizational values• Rebuilds trust after a crisis• Establishes credibility of new products / companies; ease of

market entry• Commanding higher prices, lower costs, premium on stock price• Enhances recommendations / word of mouth leading to faster

adoption• Increases customer loyalty / renewals / satisfaction• Improves the attracting / retaining of talent• Lowers legal costs

8

Measuring Reputational Outcomes• Benchmark reputation / relationship metrics via survey

prior to a campaign, repeat every 3-6 months• Correlate attitudinal studies with customer purchase

attitude and behavior• Map conversations (and tone) in traditional + social

media to web analytic data –e.g. registrations, requests for information, sales leads etc.

• Map conversations / reputation to financial analysts opinions and stock price volatility

• Correlate share of thought leadership visibility to adoption of policy positions

9

How PR Impacts Employees*• Increases employee satisfaction and engagement, leading to

greater efficiency, increased retention, lower turnover rates, lower recruitment costs, and higher productivity

• Lowers legal costs• Change employee behaviors such as greater levels of focus on

key areas such as safety, quality, call response times• Provides greater transparency and commitment to and from

employees• Creates a platform should it be necessary to communicate bad

news at some stage in the future* Note items here can also refer to other internal publics such as

trade association members.

10

Measuring Employee* Outcomes

• Use control groups and compare to employee populations exposed to PR activities

• Focus on performance outcomes not attitude or awareness• Match / correlate messaging data to:

• Employee satisfaction and engagement findings• Employee turnover statistics and other recruitment data• Call response times • Customer experience surveys

• Consider other research tools and data – focus groups, exit interview data, days of sickness, etc.

* Note items here can also refer to other internal publics such as trade association members.

11

How PR Affects Public Policy

• Creates public awareness, understanding, and support for legislation, regulation, and political candidates

• Affects voter behavior• Helps pass legislation, regulation, and initiatives• Affects specific companies and industries through

appropriations, tax impacts, and regulatory changes that can affect any and all aspects of a business

• Instigates and perpetuates grassroots or grasstops campaigns

12

Measuring Public Policy Business Outcomes• Use available public tracking services at national (e.g. major

network polls) or local (e.g. university polling centers) to track changes in awareness, understanding, support and voter intent. Also where possible link to level of PR activity

• Conduct tracking survey of key politicians or regulators. Can often use Influentials’ awareness as a proxy for elected officials, as well as to measure the “edge” of a trend

• Post-election surveys can isolate specific effects of PR by determining actual voting behavior, as well as levels of exposure to different communication mediums.

• Actual public or legislator voting behavior

13

How to Set Effective Benchmarks

• Acceptable: Your own performance over time • Make sure time frames match web analytics, marketing

data• Factor in milestones, new staff, new products, new

leadership• Better: Peer organizations – think three

• 1. An underdog who is nipping at your heels• 2. Your closest rival• 3. A stretch goal

• Best : The competition – whomever / whatever keeps your C- suite up at night

14

Budgeting Considerations• Measurement should average 3-7% of a total PR budget,

based on research by USC Annenberg• Ask client to use existing survey and tracking resources often

available through consumer insights or market analytics department

• Some rough ballpark costs (note each can have great variance depending on the project parameters):• Survey costs based on 20 question survey of 1,000 Americans:

$15,000 - $35, 000 depending on target audience• Focus groups cost: $5,000 to $8,000 each• Three question omnibus survey: $3,000• Zoomerang / Survey Monkey or in-house survey: $2,500-$5,000• Media Analysis -100 articles: $1,000-$5,000

15

Resources to Get Started

• http://www.instituteforpr.org/• PRSA Measurement Toolkit• “Primer of Public Relations Research,” by Don W. Stacks,

Published by Gilford. • “Evaluating Public Relations: A Best Practice Guide to Public

Relations Planning, Research and Evaluation,” Second Edition by Tom Watson and Paul Noble, Published by Kogan Page

• "Unleashing the Power of PR: A Contrarian's Guide to Marketing and Communication,” by Mark Weiner, Published by Jossey Bass

• “Measuring Public Relationships: The Data-Driven Communicator’s Guide to Success,” by Katie Delahaye Paine, Published by KDPaine & Partners

16

Documenting the Business Outcomes of Public Relations

PRSA Measurement Working GroupDraft September 1, 2009

Chair: David Rockland, Ketchum Pauline Draper-Watts, IPR Commission Chair Katie Paine, KD Paine & Partners Mark Weiner, Prime Research Don Wright, Boston University

17