How To Turn PR From A Cost Center to A Profit Center

In a downturn, marketing is very often the first department to feel the squeeze in a company, and any PR expenses very often the first to go when budgets are cut. There have been plenty of articles about why this isn’t a good idea, but in the bigger picture of things, the genesis of the issue is that marketing and PR are looked at as cost centers instead of profit centers.

“Mistake No. 1 is thinking that marketing is the best place to cut when businesses are looking to tighten their belts,” says Ann Handley, chief content officer at MarketingProfs. “But it’s not the time to jettison marketing. If business is slow and you’re reining in your plan to get your name out there, it means fewer leads, less business and, ultimately, less income.” - Entrepreneur

Ann hits the nail on the head here in that less marketing = less leads = less income. When the C-Suite doesn’t see PR as a profit center, it’s a problem. PR hasn’t typically been viewed this way because of the lack of measurement aligning it with bottom line business ROI. In 2009, Jeremiah Owyang wrote about What Happens to PR Firms in a Recession, citing,

“Secondly, those that are management need to quickly adjust the PR firm to offer more outputs for clients than ever before.”

Today, in 2014, it’s not only about getting more outputs, but about measuring their impact – what action did those outputs inspire? Which of those actions are positively affecting our bottom line and creating an income pipeline? It’s self-effacing at best, and irresponsible at worst, to not have PR analytics in place. Measurement that goes beyond possibilities and outcomes is a must (as our CEO recently wrote about), and today’s PR practitioners must understand how to produce clear reports of success – both what the outcomes and inputs are. Here are five key tips for changing the way you measure, in order to turn PR from cost center to profit center.

  1. Stop operating like an overhead division – if you’re not producing reports that tie your PR programs to the bottom line, you’re going to be viewed as overhead. From PR staff to events, fees for awards and speaking submissions, travel and event costs, etc., PR costs money. But you can reflect that it also helps the company make money. PR experts should be tracking way beyond awareness measurements. With Google Analytics at the least, and preferably, with PR analytics software, there is no excuse for not having a view into what PR programs are profitable and contribute to the bottom line.
  2. Benchmark and set goals – too many PR experts aren’t tracking beyond quantity of “clip counts” “likes” or “butts in seats” to recognize truly high performing efforts. Every PR executive today should know at what level individual campaigns and programs are performing. You can’t do this without a benchmark. What’s your benchmark? It could be the results of the same campaign as last year, or a program’s average performance over the last six months, compared to the next six months.  More importantly, set clear goals with timeframes, such as “Q3 goals are: 30 media mentions, 50% placements in tier one media, Spokesperson A quoted in 80% of media stories, these 3 key messages in 90% of coverage, average of 500 registrations per webinar, engagement (and define engagement) with 10 of these top 20 industry influencers, 85% positive sentiment in social channel mentions.” We help with this at SeeDepth through our Campaign Performance Index – it’s clear to see via scores what the highest performing campaigns are and what goals you’re hitting. It’s also crucial to step up and start sharing these progress reports with the C-Suite, so they can see your constant improvement (or understand your change in direction when something isn’t performing well).
  3. Track patterns and report on highest performing programs – when one PR campaign drives more action (read: traffic, buzz, attendance, leads, etc.) over another, today’s PR expert should be analyzing not only what the outputs are, but what the inputs are that led to the success. What elements continually play a role in your highest performing and profitable campaigns? Repeat those. Change the low performing ones. It’s like a recipe – does a dash of salt always make it better? Then why wouldn’t you always add a dash of salt?
  4. Demand a seat at the table – PR needs to move from promotional counsel to business counsel. PR covers so many areas of the business now, especially with the advent of social, that you can’t possibly hone a strategic campaign without first understanding not only what the marketing or communications goals are, but what the business goals are, and how they’re going to be tracked, as well as what the philosophy is behind them. And, what the divisional goals are – PR touches everything from business development and sales, to HR and customer service. PR experts must stand up and demand to be involved at a more ground level on decision making and goal setting, in order to execute the PR programs and strategies that will make the most profitable impact.
  5. Measure PR’s role in revenue – Christopher Penn of SHIFT Communications says that PR shouldn’t really be responsible for revenue, but rather, leads, in his great post, “Public Relations Metrics Are Like Apples For Pie.” While we agree with his point that PR professionals only have control over so much, we still encourage them to boldly take credit for their contributions – and that means paying attention to what’s happening beyond the promotion that drove the leads. (We wonder how many PR folks are even tracking their contributions to lead generation, but that’s another post). For example, it’s not enough to create an event and in recap, say “We had 2,000 attendees, which learned of our event through PR.” Today’s truly forward-thinking experts will calculate further. Here’s a hypothetical scenario:
    1. 2000 attendees driven through PR and marketing channels, at $200 each = $400,000
    2. 3678 referrals from social channels
    3. 2200 referrals from media coverage
    4. 5878 total referrals
    5. 56 leads
    6. 18 opportunities
    7. 6 sales closed and attributed to learning about us from the event = $180,000
    8. Room and food costs $150,000
    9. Staff and travel costs $75,000 (including PR time)
    10. Profit = $355,000
    11. Divisions that played a role: Marketing, PR, Sales = $355k/3 = $118,333 PR-driven profit

Is this an exact science? No. Is it easy to do in a silo? No. But, it’s high time that PR starts making a stake in the ground on its bottom line contribution. It’s better than sitting back and saying “We don’t know what our contribution to sales is/can be/was. We did our job (promotion and lead generation through such), and now we step back.”

PR has to step up and a) track the entire customer journey by integrating more closely with all of marketing and sales, b) demand deeper insights, and c) take more credit - backing it up with their own data. Using PR analytics enables you to intelligently and clearly identify attributes that repeatedly drive lead generation, and can further help you to make a strong case for PR as a profit center in your organization.


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