The ROI of public relations
by Melissa Barreca
The ROI of public relations
Positive or negative media coverage affects your business, but how do you measure those results?
Public Relations by Melissa Barreca and Kathy Callahan
We've all had those mornings when you whistle into the office to find a newspaper on your desk with a negative headline glaring off the page-perhaps the story contains misinformation, paints your company in an unflattering light or misquotes you. The wrong story can not only ruin your day but can turn away guests and employees, start rumors, and damage your reputation.
Now picture the opposite scene: the headline is not only factually correct, but it seems perfect-just the way you wanted it to be written. The article tells your company's story well and you're sure it will inspire confidence and loyalty. This type of story not only puts a spring in your step, it's great for business.
These scenarios are easy to relate to, as all executives who have had some experience with the media have been either pleased or dismayed by the outcome. But anecdotal experience only tells part of the story. So, how can you truly measure the impact that positive or negative media exposure has on your business? And how can this help you determine the budget to allocate for PR resources based on the projected return on investment?
Gauging media 'value'
A common, but misguided, method for calculating the worth of media coverage is to determine its advertising equivalency value. The size of the article in column inches is given a dollar value equal to the cost of placing the same size advertisement in that publication. Many PR practitioners will then also use an arbitrary "multiplier" number-multiplying the dollar figure by two, three, four or even ten or more-with the rationale that editorial space is more valuable than ad space.
The problem with ad equivalencies is that it's not accurate to gauge the true monetary value of a news clip in a vacuum and there really is no comparison between an ad and editorial copy. With advertising, readers know that it is a paid endorsement and therefore view it with skepticism. While advertising does serve a marketing purpose, no ad can touch the influence of one well-placed story.
A better way to understand the value of your media coverage is to track it over time, monitor the tone of the coverage, check whether your key messages are being communicated, evaluate "share of voice" compared to your competition and plot this information in tandem with other variables like business levels or coin-in. It can be a tedious process, but the effort will pay dividends in helping you understand and maximize the value of your PR efforts.
More than likely, you'll begin to see trends. You may notice that your PR department's work with local food critics and placing chef segments on local TV stations resulted in a spike in positive food coverage, which was followed by a 10 percent increase in covers in your restaurants. Or you may see how a string of negative editorials about the odds of winning on particular slot floors occurred in tandem with a drop in your coin-in. While media coverage alone is not the sole driver of these business results, there is a strong connection.
There's also value in the stories that don't run. That is, when your company has a crisis situation, you can prevent lost revenue and reputation damage when your PR team adeptly keeps the story out of the paper. Although it can be next to impossible to estimate a true dollar value of a story that didn't run (and it's almost certain that the numbers would be staggering if you could), these circumstances must be accounted for in the final analysis of your team's value.
Getting down to details
The secret here is investing in research and measurement to understand what's working and what's not. Where does your PR team need to focus its efforts to build stronger working relationships with reporters...or hone in on your key messages to include them in more stories...or support critical revenue streams?
Once you begin to see a relationship between smart, proactive work with the media and revenue, you should consider increasing the level of your investment in PR accordingly. If you notice that increased revenue runs parallel to media exposure, you might determine that spending a percentage of that increase on strategic media relations might be a worthy investment to further boost income.
Although this column focused on the value of media coverage, there are many other factors that determine the value of your PR team. They may be superstars of internal communications, keeping morale high and educating your team to prevent workman's comp injuries or minimize turnover. They may be building goodwill in the community through charitable giving, making your property a trusted local corporate citizen. They may be providing support to your marketing team, helping to drive sales and increase incremental play.
It's vital to track results in these areas as well to understand the ROI of PR.
Knowing what your PR team brings to the table is totally dependent on research and measurement. Set measurable objectives for the team and monitor outcomes. Hold them accountable for generating ROI from their efforts, and providing the same evidence of strategic planning as the rest of your executive team. Only then will you know their true value.
Melissa Barreca is communications project manager at Ameristar Casino St. Charlesin St. Charles, Mo. She can be reached at (800) 325-7777, or by e-mail at melissa.barreca@ameristar.com. Kathy Callahan is director of communications for Ameristar's corporate office in Las Vegas. She can be reached at (702) 567-7053, or by e-mail at kathy.callahan@ameristar.com.
Positive or negative media coverage affects your business, but how do you measure those results?
Public Relations by Melissa Barreca and Kathy Callahan
We've all had those mornings when you whistle into the office to find a newspaper on your desk with a negative headline glaring off the page-perhaps the story contains misinformation, paints your company in an unflattering light or misquotes you. The wrong story can not only ruin your day but can turn away guests and employees, start rumors, and damage your reputation.
Now picture the opposite scene: the headline is not only factually correct, but it seems perfect-just the way you wanted it to be written. The article tells your company's story well and you're sure it will inspire confidence and loyalty. This type of story not only puts a spring in your step, it's great for business.
These scenarios are easy to relate to, as all executives who have had some experience with the media have been either pleased or dismayed by the outcome. But anecdotal experience only tells part of the story. So, how can you truly measure the impact that positive or negative media exposure has on your business? And how can this help you determine the budget to allocate for PR resources based on the projected return on investment?
Gauging media 'value'
A common, but misguided, method for calculating the worth of media coverage is to determine its advertising equivalency value. The size of the article in column inches is given a dollar value equal to the cost of placing the same size advertisement in that publication. Many PR practitioners will then also use an arbitrary "multiplier" number-multiplying the dollar figure by two, three, four or even ten or more-with the rationale that editorial space is more valuable than ad space.
The problem with ad equivalencies is that it's not accurate to gauge the true monetary value of a news clip in a vacuum and there really is no comparison between an ad and editorial copy. With advertising, readers know that it is a paid endorsement and therefore view it with skepticism. While advertising does serve a marketing purpose, no ad can touch the influence of one well-placed story.
A better way to understand the value of your media coverage is to track it over time, monitor the tone of the coverage, check whether your key messages are being communicated, evaluate "share of voice" compared to your competition and plot this information in tandem with other variables like business levels or coin-in. It can be a tedious process, but the effort will pay dividends in helping you understand and maximize the value of your PR efforts.
More than likely, you'll begin to see trends. You may notice that your PR department's work with local food critics and placing chef segments on local TV stations resulted in a spike in positive food coverage, which was followed by a 10 percent increase in covers in your restaurants. Or you may see how a string of negative editorials about the odds of winning on particular slot floors occurred in tandem with a drop in your coin-in. While media coverage alone is not the sole driver of these business results, there is a strong connection.
There's also value in the stories that don't run. That is, when your company has a crisis situation, you can prevent lost revenue and reputation damage when your PR team adeptly keeps the story out of the paper. Although it can be next to impossible to estimate a true dollar value of a story that didn't run (and it's almost certain that the numbers would be staggering if you could), these circumstances must be accounted for in the final analysis of your team's value.
Getting down to details
The secret here is investing in research and measurement to understand what's working and what's not. Where does your PR team need to focus its efforts to build stronger working relationships with reporters...or hone in on your key messages to include them in more stories...or support critical revenue streams?
Once you begin to see a relationship between smart, proactive work with the media and revenue, you should consider increasing the level of your investment in PR accordingly. If you notice that increased revenue runs parallel to media exposure, you might determine that spending a percentage of that increase on strategic media relations might be a worthy investment to further boost income.
Although this column focused on the value of media coverage, there are many other factors that determine the value of your PR team. They may be superstars of internal communications, keeping morale high and educating your team to prevent workman's comp injuries or minimize turnover. They may be building goodwill in the community through charitable giving, making your property a trusted local corporate citizen. They may be providing support to your marketing team, helping to drive sales and increase incremental play.
It's vital to track results in these areas as well to understand the ROI of PR.
Knowing what your PR team brings to the table is totally dependent on research and measurement. Set measurable objectives for the team and monitor outcomes. Hold them accountable for generating ROI from their efforts, and providing the same evidence of strategic planning as the rest of your executive team. Only then will you know their true value.
Melissa Barreca is communications project manager at Ameristar Casino St. Charlesin St. Charles, Mo. She can be reached at (800) 325-7777, or by e-mail at melissa.barreca@ameristar.com. Kathy Callahan is director of communications for Ameristar's corporate office in Las Vegas. She can be reached at (702) 567-7053, or by e-mail at kathy.callahan@ameristar.com.
