The PRNews PR Measurement Conference in Washington, D.C. earlier this month provided a platform for the industry’s measurement experts to share their knowledge and strategies. Yesterday, we wrote about Mark Stouse’s recommendations for thinking like a CEO to link PR efforts with sales numbers. Today we cover the second half of the presentation, in which Angela Jeffrey, managing director U.S. at Salience Insight, brought metrics and formulas to help realize those PR-sales metric connections. If you want to DIY and need an easy formula for calculating ROI and cost efficiency, here are the formulas Jeffrey explained.
Payback = incremental revenue
Investment = what you put into it [either in time (calculated as dollars per hour) or in dollars]
Here is a simpler formula for determining the correlation between ROI and PR. It is not a valid ROI but is valid a contribution toward it.
Revenue Event= (Payback-Investment)
Where payback is incremental revenue and investment is what you put into it.
To calculate cost efficiency metrics by your activities, use:
Cost-per-impressions (Tweets, Fans, Website Visits)
* Add up target impressions
* Divide campaign costs by impressions
* Results: Cost for one person to see your item
You can use the results for a specific survey or campaign to compare cost against the total of progress seen.
Cost-per-awareness (Attitude, Understand, Preference or Loyalty Uplift)
* Gather percent of uplift in survey scores
* Divide campaign cost by percent gain
* Result: Cost of percent gain in survey results
When it comes to measuring your web analytics, do your homework first. Understand Google Analytics and be able to create goals and funnels. Having those goals and funnels in place actually helps you determine what you want your outcome to be. Most of us do not usually get the opportunity to influence sales. So where you can, define macro and micro goals.
An example of this was developed by Avinash Kaushik, where he created a formula or assigning dollar results to micro goals, which can show progress against macro goals, and can be established with a bit of internal research and agreement with management. An example of a micro goal would be a “contact me” sign-up form, and a macro goal would be a $500 sale or donation garnered from that signup form. So if it took ten “contact me” sign-ups for one sale or donation, that would mean that each sign up cost $50.
Once you have your goals established, set up a goal funnel to compare your web analytics with the channels. Track visits and dollars spent from each channel and divide the revenue by number of visits from each platform to compare values-per-visit.
If you use a competitive share of voice, which is weighted tonality, to link outcomes, you can see the correlations. But earned media coverage analysis must include qualitative measures like message, prominence, or dominance, as well as quantitative measures like number of items or impressions.
Ultimately, successfully measuring the link between public relations and sales means a lot of math and careful analysis, but streamlining your processes and orienting them toward measurement will lead to reliable data that gives you deeper insight into your PR efforts. How are you tying your ROI & Outcomes/Outputs to your PR and Sales activities? Which measures give you the most insight?