In conversations with clients and potential clients, the issue of measuring the value and impact of investments in public relations is a frequent topic. It is a simple question without easy or straight-forward answers. RLF Communications’ (RLF) point of view is that measurement can and should be implemented if the client is committed to long-term investments in strengthening its brand, building awareness for its products and services, and deepening its relationships with stakeholder audiences.
At the simplest level, public relations can be measured with “ad equivalency,” “share-of-voice,” or other metrics that track earned media coverage. For example, ad equivalency metrics assign a value based on what that same “space” would have cost if it had been purchased. A story on a local television news program that airs for 60 seconds would be assigned the value of what that same airtime would have cost to run a commercial. Most formulas also assign a multiplier of 3-5 times to reflect the third-party credibility that comes from earned media. It can also be measured by creating dedicated landing pages or phone numbers tied to specific news releases.
While there are multiple variations and flaws with these approaches (how to measure tone, how to account for negative coverage that could have been so much worse without skillful PR support, etc.), it is the easiest way to create charts and graphs that can be shared with senior leadership teams. Although most companies have moved away from ad equivalency metrics, there is still a role for them as a baseline to track earned media efforts over time, particularly for specific projects such as product launches and promotional campaigns. RLF invests significant resources in monitoring systems and databases such as Cision, Sprout Social, Mention and other platforms to help provide this type of reporting and analysis.
Tracking the deeper impact of public relations initiatives to support company\organizational brands requires a more sophisticated approach. New services such as Signal AI are developing tools that harness the power of Artificial Intelligence in data gathering and analysis. Beyond that, there are a multitude of studies that address how to arrive at brand equity formulas but do not segment out the specific role public relations plays in creating that value. Even the Valid Methods Framework (VFM) adopted as part of the Barcelona Principles in 2010 does not provide helpful measurement tools that can be applied by organizations.
RLF defines public relations as “communicating, connecting and influencing stakeholders who can help or hurt an organization by what they think, believe, say and do.” As companies\organizations seek to establish or maintain leadership positions in their respective industries, establishing original and relevant business metrics will help determine the value of their public relations efforts with stakeholders. Those metrics start with RLF helping to clearly define what “success” looks like and what goals makes a meaningful difference to the company\organization.
Once we know which way is “True North,” RLF advocates adopting the “outcomes” model identified in the Guidelines for Measuring Relationships in Public Relations study commissioned 20 years ago by the Institute for Public Relations. It is still considered the gold standard in PR measurement techniques. The model identifies five outcomes of successful relationships with key stakeholders:
- Control Mutuality (The degree to which parties agree on rightful power to influence each other.)
- Trust (Built through integrity, dependability, competence and confidence.)
- Satisfaction (Where positive expectations are reinforced, and benefits outweigh costs.)
- Commitment (When the relationship is worth spending energy to maintain and promote.)
- Communal Relationship (Both parties provide benefits to the other because they are concerned for the welfare of the other, even when they get nothing in return. This is in contrast to “exchange” relationships where all actions are predicted on expectations to receive benefits of equal or greater value to what has been given.)
Organizations that communicate effectively with stakeholders develop better relationships because management and stakeholders understand one another and are less likely to behave in ways that have negative consequences on the interests of the other. Therefore, the value of public relations can be determined by assessing the quality of relationships with strategic publics and measuring effective outcomes.
Every company\organization has a different set of key stakeholders, but they generally encompass both internal and external audiences, such as senior management, employees, boards of directors, regulatory bodies, legislative bodies, activist groups, analysts, retail shareholders, institutional shareholders, trade media, business media, local media, vendor partners, retail partners, suppliers, financial partners and labor unions. Let’s also not forget customers and the myriad of combinations they form. The list goes on and on, driven by an organization’s size, complexity and industry.
There will often be times when a company\organization is at odds with the needs and desires of certain stakeholders. In fact, there are times when going to war against those groups is required to accomplish organizational objectives. In those instances, the value of having done the hard work required in public relations pays off. As Sun Tzu recorded more than 2,000 years ago in The Art of War, “Know your enemy and know yourself, and fight a hundred battles without danger. Know yourself but not your enemy and win one battle but lose another.”
If companies\organizations truly want to understand where they stand with friends and foes, RLF recommends developing a Perception Matrix that assigns a current score for each “outcome” with every stakeholder audience. Strategies and tactics can then be developed to stabilize, improve and track outcome scores, with the desired objective to more effectively operate and achieve business objectives.
For example, companies\organizations can establish baseline scoring systems ranging from -5 to +5, with 0 serving as neutral. For each stakeholder group, an initial score can be assigned in each outcome category (Control Mutuality, Trust, Satisfaction, Commitment, Communal Relationship) and then work to create strategies with specific outcome objectives such as increasing positive share-of-voice, reducing regulatory cycles, aligning third-party supporters and other metrics that ultimately lead to improved company\organizational performance.
There is a no question this is tricky to figure out. Professor Jim Macnamara has written, “human interactions, relationships, feelings, attitudes, loyalties, perceptions and engagement do not yield easily to numeric quantification.” But companies\organizations can and should be able to develop a model that assigns numerical value to the investments they make in establishing (and maintaining) leadership positions in their respective industries.
Companies\organizations interested in these issues should also review insights gathered in the Authentic Enterprise report commissioned a decade ago by the Arthur Page Society. Page is composed of the top corporate public relations executives in the United States. The study was updated in 2013 and reaffirms that a proactive narrative is a key part of explaining an enterprise’s social value and defending the company’s reputation in the global marketplace.
Another resource that can be helpful is the annual Global Communications Report conducted by the Annenberg School at the University of Southern California. This survey is endorsed by the leading communication associations, and RLF participates in the data gathering process through our Worldcom Public Relations Group partnership. With more than 100 leading independent agencies around the world to draw on for trends, insights, proprietary research and best practices, we are able to access a multitude of resources for our clients.
RLF deeply believes in the power of public relations to move companies forward and build brand equity. Absolute quantification is a challenge in our industry, but we can develop metrics to inform our progress. We are devoted to ideas, strategy and service that help our clients succeed and we welcome the opportunity to work with clients who aspire to great things.