Gini Dietrich

PR ROI Means You Have to Do Real Math

By: Gini Dietrich | October 21, 2014 | 
44

PR ROI Means You Have to Do Real MathBy Gini Dietrich

As it turns out, Cuba Gooding, Jr., did NOT say, “Show me the stories!”

He said, “Show me the money!” and that’s exactly what your clients and bosses are saying at this time of the year, when we’re all thinking about budgets and campaigns for next year.

Show me the money.

I’m so fed up with communications professionals who don’t know what return-on-investment (ROI) means or how to measure it.

ROI = Money

As Jason Falls so eloquently put it in, “If the Metric isn’t Money, You Can’t Measure ROI“:

ROI is a financial equation. It is the amount of money you made (let’s use M), minus the amount of money you spent (C), divided by the amount of money you spent (C).

ROI = (M-C)/C

The resulting number will be a number with some decimals. If you move the decimal point two places to the right, it reads as a percentage. Anything over 100% is positive ROI. Anything less is negative.

These are indisputable facts. They are a part of a magical world called math. Neither you nor I can argue these.

That’s why I (like Jason) got fired up when I read, “Show Me Social Success” on CMO.com.

An Example of PR ROI

I am a business owner. I know exactly what the PR ROI is for everything we do. I also know what kinds of things generate income and which do not.

For instance, this very blog drives 80 percent of the new revenue (it’s a ridiculous ROI of more than 1,000 percent, which tells me we could invest in it even more) for Arment Dietrich.

It also has affected the business with things that cannot so easily be measured, such as increased thought leadership, credibility, and brand awareness.

We know those things are working because we’ve been awarded things such as the #3 PR blog in the world (or #2, depending on which list you see), one of the top communications agencies in the world, and the #11 communications executive on Twitter.

But they also have afforded me the opportunity to gain two book deals and speak around the globe…and get paid for it.

Now I have another number from which I can determine the PR ROI.

What is Your Average PR ROI?

Remember last week when we talked about how to determine your PR ROI?

That was written more for the people who hire PR pros, firms, or manage teams. It was to help them understand that number of stories placed and number of Facebook fans are not the right metrics. And it was to help them understand the types of things we (PR pros) have to do to determine the right metrics and the potential PR ROI.

Many of us will be able to tell a prospect what our average PR ROI is for clients (ours is 2.5 times budget spent, which means we sometimes exceed that and sometimes don’t…it’s an average).

Of course, that number also depends on how the client views you. Are you a partner or a vendor? If it’s the latter, you’re not going to have the kind of success you would if it’s the former.

Laura Petrolino and I had this very conversation yesterday. She’s working hard to help a client create a dashboard and they want to include things such as media placements and social media number increases.

It must be a real joy to work with me because I kept asking why.

Laura is not one to get flustered, but after the third or fourth “why,” she acquiesced and said she’d track them internally, but not include on the dashboard.

The Right Metrics

Here is what she and the client’s chief marketing officer will track, though:

  • The number of people who click on the blog calls-to-action.
  • The action do they take from there ( just kicking the tires, disappearing, scheduling a demo, or buying).
  • How many people download the webinars, white papers, and case studies (and same metrics as bullet above).
  • The number of leads, leads to prospects, and prospects to customers.
  • The number of people who take the demo every week and where they originated.
  • The number of people who fill out the contact form and the action they take from there.

These are the kinds of metrics that mean something to a business owner or leader…and certainly to the chief financial officer.

If you can prove your communications efforts generated X number of leads, which turned into X number of customers, you suddenly have your PR ROI.

PR ROI + Anecdotes = Increased Budget

Yes, you absolutely should track website visitors and pageviews and social media number increases and the other vanity metrics that our industry wants to hold on to so dearly.

Those things will tell you, on a surface level, if what you’re doing is working (or not).

And yes, you should track anecdotes (as the author of the CMO.com article says, “No one will remember that you got 5,000 views on SlideShare. Everyone will remember that you got the White House on board.”) and number of stories placed and sentiment.

But those should be for the communications team only and should not reach to the executive offices until you are presenting your PR ROI and have the anecdotes to tell a compelling story.

Everyone will remember you got the White House on board during your communications campaign and they’ll remember you had a 250 percent PR ROI when it comes time to budget for next year.

Show them the stories and the money.

photo credit: Shutterstock

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

Spin Sucks in Your Inbox

Leave a Reply

44 Comments on "PR ROI Means You Have to Do Real Math"

avatar

Sort by:   newest | oldest
LauraPetrolino
1 year 9 months ago
….and THIS is another example of why PR/Comm can’t be silo-ed and must work intimately as part of the company operations.  I’ll also re-emphasize the advice you’ve given previously here (and gave in our discussion yesterday) for us to draw out a map or flow chart that clearly shows the lead nurturing pathway through all different acquisition channels. While the client and I had been working on numerous lead generation and nurturing pathways, we hadn’t visually mapped it out yet. Not only was this leaving gaps, but also made it really hard for us to clearly see where we needed… Read more »
ginidietrich
1 year 9 months ago

LauraPetrolino 🙂

Digital_DRK
1 year 9 months ago

Excellent  explanation!  helps cement my understanding of  ROI.  Although I am still trying to “wrap my head around”  http://twitter.com/lkpetrolino  and the word “acquiesce” in the same sentence.

Eleanor Pierce
1 year 9 months ago

Math! There’s no shame in having to Google how to do math problems (Is there? Because I had to do this recently, and when I told the statistician I live with, he nearly laughed me out of the room).

LauraPetrolino
1 year 9 months ago

Digital_DRK LOL! Right? Mark this moment in history!

LauraPetrolino
1 year 9 months ago

Eleanor Pierce I need to know what math problem you googled!

HeatherTweedy
1 year 9 months ago

Gini, everybody knows a Facebook fan is worth, like $2.  That’s math.  Like, really, real math.  

🙂

ClayMorgan
1 year 9 months ago

One day we (the industry) will figure out the purpose of business is to make money, not to appear on the front page of a newspaper. Once that is intimately ingrained in PR’s system, the industry will work harder on real $$$ ROI$$$.

Mr. Wonderful’s got nothing on me. Except maybe a few billion bucks.

LauraPetrolino
1 year 9 months ago

HeatherTweedy Someone bought my like for $5 yesterday. I’m a luxury good!

Howie Goldfarb
1 year 9 months ago
Dear everyone who read this. Forget you saw it. There is nothing to see here. Move along. Git! I don’t think I would fight over the vanity metrics on the dash board. I think over time when the important metrics are right there next to them the vanity ones cease to be vanity metrics. The real problem is the bloat in the incumbent system. Very powerful interests do not want the big question answered: Half of your Ad/Marketing/PR spend is wasted. Do you know which half?’ The answer to date is ‘no idea biggest mystery on earth. bigger mystery than… Read more »
Howie Goldfarb
1 year 9 months ago

ClayMorgan I think a big problem is public company CEO’s wanting to behave like Private Company CEO’s and they can’t. But they do.

Digital_DRK
1 year 9 months ago

LauraPetrolino Eleanor Pierce Speaking of math, I love the saying “There are (3)  types of people in this world, those who know math and those who don’t”

Howie Goldfarb
1 year 9 months ago

ginidietrich LauraPetrolino PR should be like an Island unto itself. One with just a small inflatable raft to get back and forth from the rest of the company…as needed.

Howie Goldfarb
1 year 9 months ago

ginidietrich I made it through that top 25 list with only minor gagging. I assume you let Mitch Joel know the rankings immediately 8)

Eleanor Pierce
1 year 9 months ago

HeatherTweedy  “That’s math.  Like, really, real math.”   HA!

Eleanor Pierce
1 year 9 months ago

LauraPetrolino Eleanor Pierce I’ll never tell.

ginidietrich
1 year 9 months ago

HeatherTweedy LOL!! I heart you.

ginidietrich
1 year 9 months ago

Eleanor Pierce Um…

ginidietrich
1 year 9 months ago

LauraPetrolino Digital_DRK It sometimes helps when you sign the paychecks.

Digital_DRK
1 year 9 months ago

Howie Goldfarb ginidietrich LauraPetrolino

ginidietrich
1 year 9 months ago

Howie Goldfarb I know you’re just saying that to push my buttons, Howie!

Eleanor Pierce
1 year 9 months ago

ginidietrich Eleanor Pierce It was calculus, Gini. Calculus! #Swears

belllindsay
1 year 9 months ago

I’m still working on your Vanity Fair cover with RDJ. FYI.

belllindsay
1 year 9 months ago

LauraPetrolino HeatherTweedy Were you in your bikini at the time, Laura…?

stevenmcoyle
1 year 9 months ago

I love this – great post Gini, sharing with my team right now. 

Quick Question, in regards to the Cost in the ROI equation – should we be including the retainer cost as well?

ginidietrich
1 year 9 months ago

stevenmcoyle Yes, most definitely. The retainer and any expenses.

ginidietrich
1 year 9 months ago

belllindsay You’re so good to me!

ginidietrich
1 year 9 months ago

Howie Goldfarb Oh, OK. Yes, we should keep this a secret.

ginidietrich
1 year 9 months ago

ClayMorgan The real issue is most PR pros are not business owners and don’t have control of a P&L. So they don’t truly understand it.

LinkedMedia
LinkedMedia
1 year 9 months ago
This is spot, wonderful and insightful Gini. The reason why I love reading and sharing your content. I am working with smaller brands and I have to say many of them forget about PR in the “rush to social media.”  And, in their defense, there is so much heat and light about all things social (self included probably). But, I think in this new smartphone drenched world getting mentioned via a news site, publication (yes, some still read print), blog, etc. is a powerful way to grab the attention of today’s frazzled “prosumer.”  But, I fear too many SMB/SMEs are… Read more »
MartinaPQuinn
1 year 9 months ago

Hi Gini, just wondering if you have any tips for measuring the impact and value of PR when you’re working for non-commercial clients?  I do lots of work with public institutions and charities, so the impact of their PR can’t be quantified in terms of ‘money made’.  We obviously track visitor numbers (where relevant) and a whole range of other metrics, but any insights you have for this type of client would be very welcome!

ginidietrich
1 year 9 months ago

MartinaPQuinn Sure! It depends on their goals. Every organization has goals. It could be being awarded a grant or increasing funding or bringing in new donors. You can absolutely tie an ROI to those kinds of things.

We have a non-profit client that wants to bring in one $50,000 underwriter for their event next year. Our goal is to help them do that through the work we’re doing. So we’d take $50,000-our retainer/our retainer=ROI.

Does that help?

KateNolan
KateNolan
1 year 9 months ago

ginidietrich stevenmcoyle Cupcakes included.

MartinaPQuinn
1 year 9 months ago

ginidietrich Hi Gini, thanks for this. I think the challenge sometimes is getting our clients to be clearer about what exactly their goals are 🙂 With quite a few organisations we work with, their goals are about increasing stakeholder engagement or participation levels in different initiatives, but they’re not driven by a need to attract sponsorship or funding, so I think we just need to tweak this model to one that fits in those scenarios (i.e. where you can’t easily define a monetary value for the goals in question).  Plenty of room for thought…

tnfletch
tnfletch
1 year 9 months ago

Hi Gini. I have been reading your blog for a couple years now and your most recent posts on PR metrics and ROI are some of my favorite. As a marketing and public relations professional I strongly believe the importance of defining measurable goals and determining ROI for your efforts. I think this so important for non profits to understand because so often they have very limited resources. If they start with the end goal in mind and take the time to assess the ROI on their activity it helps them understand where to best spend their time and money.

trackback

[…] Tracking the correct metrics for the ROI of your public relations efforts means (gasp!) using math. (Spin Sucks) […]

Wendy Marx
Wendy Marx
1 year 8 months ago
Thanks for your excellent post, Gini. Where I struggle is the fact that in many cases there is not a one to one correspondence between PR efforts and leads. For example, how do you account for the person who reads an article about your company on a third party site and six months later visits your website and calls your company?You have no idea that the article was the precipitator. Or the person who keeps seeing your name associated with articles so when the person suddenly needs your services your company comes to mind. Or the person who finds you… Read more »
ginidietrich
1 year 8 months ago

Wendy Marx You’re right – there is a lot to be said about the brand awareness side of things. That’s why we always have both goals: To increase brand awareness or market share or just the gut feeling that everyone is talking about the client AND the things that can be measured.

Wendy Marx
Wendy Marx
1 year 8 months ago

ginidietrich, thanks for clarifying that. I guess that is both the bane and benefit of PR. That some of it just isn’t measurable.

trackback

[…] The daily articles on the blog include everything from interviews, suggested marketing tools, and topics like “PR ROI Means You Have to Do Real Math.” […]

trackback

[…] it’s not my favorite. I prefer words to numbers. But I can’t escape math. Certainly not while working for Gini […]

trackback

[…] information can help you see the ROI of your earned media outreach efforts and learn important information to adjust your strategy moving […]

trackback
[…] It would be easy as a Spin Sucks Crazy to think that the blog is all that happens at Arment Dietrich. I say that because the activity stream is constant. That’s not because the blog is all they do, though; it’s because they make sure to delegate responsibility for reining in interacting with the community throughout the day to someone on staff. I have to remind myself that the blog is only a part of what they do and respect that, although they would point out that the blog is the entryway for many business leads (80% of new revenue,… Read more »
trackback

[…] dirty. Can you write clean copy? Can you actually dig in and use the reporting software? Can you do the math? You’ll be more successful if you have both old-school and new-school communications […]

wpDiscuz
[postmatic_subscribe_widget]