<img height="1" width="1" src="https://www.facebook.com/tr?id=272494640759635&amp;ev=PageView &amp;noscript=1">

Calculating the Return On Investment for a Public Relations Campaign: A Concise Guide

By Bright Ewuru

How to know if your PR campaigns are financially successful

 

A person looking at a company's financials.Are your campaigns really profitable? How can you prove that your marketing campaigns were of value?

 

Calculating the return on investment (ROI) determines if you’ve been making a profit from your public relations campaigns and helps you identify which PR exercises yield the most buck.

 

This article discusses ROI on PR campaigns, how to calculate it, and challenges against a perfect ROI calculation.

 

Audio: Listen to this article.

 

The meaning of Return On Investment

ROI stands for return on investment, which is the amount of money you get from an investment compared to the amount you put into it. Thus, it measures not only the profit but also profitability.

 

A positive ROI means that your campaign earned more than it cost; a negative ROI means that your campaign fetched less than it cost.

 

If you’re keen on calculating the ROI of your PR campaign, a simple formula is laid out in the following steps:

  1. First, find the difference between the amount gained and the amount spent
  2. Then divide the answer by the amount spent
  3. Next, multiply your answer by 100. This step is necessary because ROI is typically expressed as a percentage. If you don’t want to express the ROI as a percentage, don’t multiply it by 100.

The proper ROI for your PR campaign

Your PR campaign should have a positive ROI to be considered successful in financial terms. This implies that the campaign fetched more than it cost. Therefore, according to the formula above, the ROI should be more than 0%.

 

However, PR pros tend to be quite ambitious; many don’t deem anything less than 20-100% ROI acceptable.

 

Whatever the case, aim to have an ROI of more than 0%. If you can’t run, walk; by all means, keep moving.  

 

The challenges of calculating a comprehensive PR ROI

Calculating the ROI for a public relations campaign can prove quite tricky. 

 

This is because, for a perfect calculation, you need to factor in the following:

  1. The money spent on the campaign
  2. An estimate of the time spent on the campaign by your staff and its fiscal equivalent
  3. Opportunity cost, which is the value that could have been generated if you were involved in another activity instead of the PR campaign

Some PR agencies don’t consider the second and the third elements. Therefore, they underestimate the actual amount spent on the campaign and get higher ROIs when they calculate.

 

Also, an exact calculation of what you earned from the PR campaign can be tough. This is because:

  • It’s not easy to put a price tag on indirect effects such as branding and image enhancement. They boost your company’s profile and prompt more sales in the future.
  • It is usually challenging to attribute every result to a particular PR activity  
  • Brand loyalty and long-term value stemming from the campaign can’t be easily quantified

Calculating the ROI for your public relations campaign is super-necessary as it gives you insight into whether or not your campaign is financially successful. Just as you can calculate ROI for your PR, you can also measure your organization’s public relations efforts. Watch our webinar to learn how to measure what matters in your company’s communication efforts.     

 

Photo by Lukas from Pexels


Topics: PR tips, measurement

Liked this blog post? Share it with others!

   

Comment on This Article

Blog Subscription

Recent Posts

Popular Posts