Is it possible to create a ROI on communication?

July 6, 2009 at 12:05 pm 1 comment

   Is it possible to create a ROI on communication? Only if you pursue truly strategic goals…

Given the huge interest in a workable tool to measure ROI on communication, and the amounts  of hot air generated on the subject in the two Berlins, I would like to propose a simple blueprint:

It goes like this:

Calculate  the  value of whatever it is you are trying to promote, sell or protect and the cost of failure.

From this you allocate a  reasonable proportion as a budget, enough to  enable success at selling, promoting or protecting, etc., recognising the price of failure. (In other words, if it’s not strategic or crucial, think about whether you really want to do it at all).

Measure your inputs – time, resources, materials.

Measure your outputs  qualitatively  (reach, tone, influence, prestige)

Measure your outputs quantitatively (impressions, views, footfall etc).

You may need to assign a value to your outputs, because PR is not the only game in town. Other communications disciplines will also have played  their part.

Measure your outcomes. Not as tricky as it seems. Did you sell any more product? How many people came to the event? Did you save the chemical plant from closure? What was the value?

Don’t get hung up on opinion shifts, unless the shift contributes directly to the achievement of your strategic goals. If it does, then measure it. 
I leave it to someone cleverer than me to calculate the golden ratios and percentages and a single number index that will make this work.
It may not be ROI, but it will be a measurement which could become meaningful.

I quote  Katie Paine: 

“If everyone is so darn hot on ROI, why aren’t they measuring it? I say the reason is, again, lack of knowledge about measurement and measurement tools. Because, there are measurement tools out there that will provide ROI (albeit, not simple or easy to use). So if they really, truly wanted ROI, then they would use measurement techniques that would allow them to calculate it. But instead, they focus on exposure-based methods like clippings and AVEs, because they are afraid of actually learning what the ROI of their programs is. They might find that their programs yielded considerably less R than the I that was put into them.”

I Agree. It’s because so many communications programmes do not have truly strategic objectives in the first place. “Raise awareness”, Increase visibility”, “improve customer feedback” are not strategic objectives, and it is impossible to calculate the value of success or the cost of failure.
Convince legislators on a particular course of action, convince a population that a plant should or should not be built, sell x million units of a new product, persuade us that a particular engineering material is non-carcinogenic and safe, or that a proprietary medicine works – now those are what I call strategic objectives.

They would all merit very grown up budgets, and it would be a dereliction of duty not to measure whether taxpayers or shareholders funds had been wisely spent.

Richard

Entry filed under: Communication evaluation, PR evaluation.

Berlin stirs up a hornet’s nest Award for Excellence in PR Measurement & Evaluation

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