Is PR a Cost Center or a Value Driver? A CFO’s View

August 3, 2016

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As CFO for the largest communications agency research group, I focus on the return on investments we make, whether or not it is worth pursuing new ventures and investing in new capabilities or technologies, and client pricing.

Despite having been in this role for a year and a half, I didn’t know much about the PR measurement practice. So, my boss (Doc Rock) sent me to the AMEC Measurement Summit in London in June. I came away surprised and a bit disappointed.

I arrived in London expecting to learn that PR practitioners go out of their way to ensure their results are measured, in order to demonstrate the value generated from communication campaigns and efforts. But I was surprised to learn from AMEC’s annual business insight survey that a whopping 42 percent of managing director and CEO respondents in the communications profession said that 25 percent or less of their client work incorporates measurement. Why wouldn’t a PR executive want to show their C-suite their contribution to the business’ success? No wonder a common complaint by internal PR teams is that they are viewed as cost centers.

I’ve heard far too often that clients don’t want to pay for measurement. According to research conducted by Burson-Marsteller and Ipsos Reputation, 75 percent of communications professionals still do not use data for measurement. The barriers: a lack of understanding by staff and leadership, and cost. 

I challenge internal PR executives to think about what matters when it’s time for a review, promotion, bonus consideration or a salary increase. You may have a fancy creative campaign, but what would your boss say if you could prove it drove sales, donations or otherwise furthered the company’s strategic objectives? Connecting the dots between public relations’ influence on the correct audience and business outcomes is what captivates the C-suite. That’s how you go from a cost center to a value driver. Then, internal PR teams are included in more strategic conversations. Their opinions matter, their budgets increase and sometimes, their take-home pay goes up. Who would want to miss those opportunities?

At AMEC, Cleveland Clinic’s Eileen Sheil and Hilton Worldwide’s Aaron Radelet explained how they saw some of these benefits when their teams proved that their PR efforts added significant organizational value, at times much more so than advertising.

Clients aren’t the only ones to blame — 32 percent of the AMEC survey respondents said they disagree or feel neutral about PR consultancies increasingly building measurement services into their overall offer to end clients. I would bet this is the same minority of respondents who see their businesses shrinking. Unfortunately even for the enlightened, there is a gap between measurement programs and proving value. Only one-third of AMEC clients have a requirement to determine business results from communications.

Make measurement a priority

I recently watched a presentation by a media measurement company to a client about their findings and observations over the past year. At the end of it, I bit my tongue but wanted to say, “Who cares?” I couldn’t figure out if the uptick in mentions, reach or improvement in various other metrics and PR buzzwords was good for the business, or a big waste of money.

If public relations can’t prove its value, then we might as well start looking for new careers. Otherwise, sooner or later, we will have our budgets slashed, do silly work and ultimately fail our clients and companies. For the sake of our profession, I suggest that if you are a consultant at an agency or work internally, then you should make measurement one of your primary objectives.

So, next steps: You need to have a business-savvy partner outside of public relations, someone you can ask how relevant your measurement program is. Does it make sense? Do they see value? I believe you will then have a better shot at increasing the awareness of PR’s value (and ideally, success!) to your or your client’s business. And if nothing else, the next time you present to the C-suite, at least the CFO will be impressed.

Rich Pacheco
Rich Pacheco is CFO of Ketchum Global Research & Analytics, having joined Ketchum from a background in advertising finance. He can be reached at richard.pacheco@ketchum.com.

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