Like everyone else, I have been stuck thinking about ways to tie social media for public relations directly to sales dollars. But, it finally occurred to me after some time that the numbers have always been fuzzy when it comes to proving any kind of ROI (return on investment) in public relations.
The difficulty in measuring ROI didn’t begin with the introduction of social media into communications.
I distinctly remember having the discussion in my Intro. to Public Relations course about how issues of measurement and ROI have always been difficult to quantify in dollars.
Why do you think people still use advertising equivalence to measure ROI in PR?
For those unfamiliar with advertising equivalence, it is basically an analysis where you measure the physical space of print media coverage, or duration in broadcast, and put it in terms of how much an equivalent-sized ad would cost in that particular medium.
For instance, if my company has a positive news story that takes up a 5″ X 8″ space in print, I would find out how much a same-size advertisement would cost in that particular publication and, voila, a specific dollar amount would be generated to determine the value of that placement; a value that’s both excrutiatingly calculated and arbitrary at best.
What exactly does that dollar amount mean? Not a lot; especially when you figure that the value of advertising is still determined by the number of impressions.
The problem with determining the number of impressions is that people can be exposed to a lot of things without being impressed.
I could bore you with stories of internship experiences where I was stuck measuring news articles with a ruler and calling local newspapers to ask about the going price for a column inch of ad space in their paper, but I won’t.
While I understand it’s the imperative of any business to make money, any business that plans to stay in business for a long time had better think of endearing itself to company stakeholders in addition to being concerned about profits.
Businesses engage in PR for many reasons that aren’t directly intended to boost sales and that is likely to carry over into social media as businesses adopt new communications strategies.
Examples of this are:
Crisis Communications – Many times crisis PR is engaged in order to minimize losses, or ease shareholder grief. In fact, the need for PR typically ramps up when a company is already losing money and going through massive layoffs. In this case, hopes for increased sales have already been written off and the strategy becomes one geared toward sheer survival.
Internal communications – Good companies recognize that there can be huge gaps in interdepartmental communication, often resulting in redundancies and dissatisfied employees. Again, there may be a slight reduction in losses, but measuring the value of efficient internal communications has an extremely indirect effect on increases in sales and profitability.
Philanthropy aka Community Relations – Many companies feel the need to adopt philanthropic and community outreach policies as part of their overall business strategy. This usually involves giving money away and while I understand there are tax incentives and good marketing agendas driving most companies’ philanthropic activities, the correlation to profit is extremely difficult to measure yet most would agree that corporate giving is a good thing.
Jason Falls wrote a fantastic post a few months back that I was rather slow in discovering, titled Perhaps Social Media Measurement Shouldn’t Matter. In it, he offers up the idea that perhaps social media shouldn’t be measured in terms of ROI because, “The core reason social media programs are successful is because they’re about people, not money”.
In this same post, Jason shares a quote from John Iwata of IBM as told to Shel Holtz and Neville Hobson during the May 5 edition of “For Immediate Release” public relations podcast where John suggests that ROI in social media should focus more on the “I” and less on the “R”.
“Some might obsess with the ‘R’ but I would ask them to first begin with the ‘I.’ What is the cost of the methods and technologies? What is the big ‘I’ with new media? I would start there. That, in fact, it is pervasive and is becoming a global and historic phenomenon because the ‘I’ is virtually not there. It is essentially free and available to all. It is very cheap to adopt these things. If there is an investment, it is on management attention and time to make sure these things are done and adopted thoughtfully and strategically.”
John Iwata, Senior Vice President of Marketing and Communications at IBM
With or without social media, the value of relationships has always been paradoxically undeniable, yet immeasurable.
Rather than trying to stick an arbitrary dollar amount on the value of relationships, maybe we need to simply change how we frame the entire purpose and value of social media.
Instead of focusing on profit forecasts, simply show how much can be done with how little. Then ask, what’s the risk?
Am I being naive, or is it time to throw out the rulers and calculators and admit that the numbers never really represented what they claimed to represent and that real, lasting value has always really been about people?