Communicators who use profitability as the sole measure of PR effectiveness are "missing most of the important stuff," according to Jerry Olszewski, senior partner at Ketchum
D.C. Olszewski was among the speakers at the Institute for Public Relations' symposium, "Putting the Yardstick to PR: How Do We Measure Effectiveness Globally?" held last week.
Paraphrasing GE CEO Jack Welch, he said that PR should be used to "leverage the operating system" of a company as much it should be deployed to move the needle on revenues. As
such, it is critical to benchmark the communication function's effect not only on revenues, but also on factors such as staff retention, customer loyalty and the degree to which
employees truly grasp and embrace company strategy - jargon and all.
In fact, financial benchmarks are losing ground in the measurement equation, said Pat Jackson, senior counsel with Jackson, Jackson & Wagner, a PR consulting firm based in
Exeter, N.H. Revenue numbers carry less weight in the new economy, where a biotech or ecommerce venture may amass a worth of several billion dollars before even turning a profit,
he said. Furthermore, financial data serve as poor indicators of success because they are historical and, therefore, often irrelevant in an environment teeming with mergers. By
2005, corporate audits will routinely quantify both financial and non-financial indicators in determining a company's market potential, he said. And counselors who can show PR's
correlation to indicators such as corporate reputation will thrive.
Donna Coletti, worldwide media relations manager for Texas Instruments, told attendees that today's most revealing benchmarks tie PR not only to revenues and profit margins,
but also to operating margins, sales figures, market share, consumer preferences, analyst preferences, stock price, employee satisfaction, and the degree to which the company is
perceived as a leader by various stakeholders. "Awareness is not allowed as a goal," in the research matrix, Coletti said.
As for funding, tight budgets may pose challenges for would-be measurers, but they shouldn't be used as an excuse to skip out on accountability, Coletti said. "Match your
initial research techniques to your available resources - whether dollars or people." One solid, yet inexpensive qualitative measure is surveying trade publication editors to
determine where your company falls in the "mindshare equation," she said. Internal surveys gauging employees' understanding of corporate strategy are also relatively inexpensive,
and can provide solid quantitative barometers of internal communications effectiveness. Practitioners who start small, but prove PR's value with hard numbers, are more likely to
secure additional research dollars from senior management for the following year, she said.
Watch for more insights from the IPR symposium in upcoming issues of PR NEWS.