Evaluate Through ROI

Wondering which ways are the best to track your success in PR? I’m no guru, but rumor has it there are more than one. The most popular ways to track the success of any business is through ROI. ROI (Return on Investment), according to Investopedia, is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio (Investopedia, 2014).

Evaluating PR campaigns can be broken down into two different ways: Closed or Open system evaluations. These two methods can also be broken down into qualitative or quantitative research. The most critical reason companies evaluate campaigns is to determine the ROI (“Evaluating PR Marketing Campaigns,” 2010). Evaluating the effectiveness of PR and marketing campaigns in recent years has become more complex due to social media and technology advances. However, there has also been an explosion of measurement techniques and methods being developed to evaluate these campaigns (McGinley,2013). The problem with evaluation techniques is that, as the technology changes so do the techniques, methods, and terminology, which is hard for PR agencies to keep up with and expensive.

So, is ROI truly accurate? The Houston Chronicle gives a great example of how accurate this method really is. The simple ROI calculation method has the benefit that it is easy to understand. It takes a basic number, the amount invested, and divides it by the value of the gain. This gives a percentage of gain. For example, if $10,000 was used to start a business two years ago and the present bank account less any immediate debts is $25,000, the small business owner can state a 250 percent return on investment within a 24-month period (Simple ROI = $25,000 / $10,000) (Miranda, 2001). How will you evaluate your progress?




Investopedia. (n.d). dictionary. Retrieved from http://www.investopedia.com/terms/r/returnoninvestment.asp

Johnny Mcginley, November 3, 2013, Five Principles of Good PR Campaign Evaluation, Business Matters, retrieved from http://www.bmmagazine.co.uk/in-business/advice/21881/five-principles-good-pr-campaign-evaluation/

Miranda, Kay. (2001). Pros and Cons of Return of Investment. Chron. Retrieved from http://smallbusiness.chron.com/pros-cons-return-investment-3425.html


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