Views: The impact of PR outcomes on the bottom line

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THE measurement of public relations performance was a neglected area for a long time, due to a lack of reliable metrics and comparable data, writes Matt Cartmell. But demand from the C-suite for ways to measure the ROI and top-level impacts of their communications output is driving the development of better measurement methods. CEOs recognize PR activity as a key influencer of reputation, recruiting and revenue, and they want to be able to accurately track its success.

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Challenges to tangible measurement lie in the vastly varied scopes, targets and formats of today’s public relations strategies. These variables cloud the data executives might otherwise use to inform business decisions. The evolution of artificial intelligence and particularly natural language processing (NLP) is, however, providing new ways of quantifying the benefits of PR campaigns. AI-driven media monitoring enables the extraction of topics, keywords and sentiment from massive volumes of content, allowing communications teams to produce data reports of how campaigns are received; the share of voice achieved; and visibility with target audiences. 

Illustrating the response generated by campaigns allows the PR teams to demonstrate their value. When correlated to business performance before and after the release of specific campaigns, the value to the organization of its PR work can be accurately tracked. And in concert with the growth of media monitoring we’ve seen the creation and refinement of the Barcelona Principles framework, providing guidelines for PR practitioners to measure the less easily quantifiable elements of their campaigns. This approach differs substantially from the once commonly employed advertising value equivalency (AVE) metrics. 

The use of AVE is controversial, and many communications professionals are rightly skeptical about how useful the results are. Employing a basic formula of the volume of any media coverage achieved multiplied by the rate that would be charged for advertising space in that media outlet lacks discrimination – between which media outlets might be most relevant to the campaign’s client; the sentiment of the coverage; and specific audience response. AVE is a very blunt instrument for an increasingly sophisticated sector.

Dissatisfaction with AVE catalyzed the impetus for a broader framework that could measure more than the basic dollar equivalency of media coverage achieved by a PR campaign. Standards such as integrity, transparency and ethics also need to be evaluated, along with the removal of bias and subjectivity in measurement. Currently, the Barcelona Principles offer the best means available of demonstrating all of these elements of communications teams’ work. 

First agreed in 2010 by an international gathering of PR practitioners, the framework has admittedly taken time to gain significant traction in the industry. But as the media landscape becomes more complex, and PR teams need more nuanced ways of measuring and demonstrating the value of their results, we see adoption of the Barcelona Principles picking up pace. This has been helped by more refined iterations – 2.0 in 2015 and 3.0 in 2020 – as the industry responds to a rapidly evolving communications topography, including the rise of social media platforms and more diverse audiences who interact with given media outlets in new ways.

The Barcelona Principles measure outcomes rather than output. In PR terms, this means the business impacts of the communications team’s campaigns, rather than the volume of content generated. As a framework for measuring public relations effectiveness, the principles are well intentioned, focusing on transparency, consistency and reliability. 

Awareness among the industry is high, but awareness doesn’t necessarily drive adoption. One drawback I perceive is that the principles are voluntary, and therefore there is no mechanism to enforce sector-wide implementation to create a level playing field for PR practitioners, and a verifiable way for clients and CEOs to compare performance.

Helpfully, the 2015 update was more explicit about the ‘how’ rather than just the ‘don’t’: the use of models to track business performance; measuring all stakeholder responses not just positive feedback; and proposed alternatives to AVEs, such as relevancy and quality of media coverage.

In 2020, the 3.0 iteration recognized the evolution in communications over the previous decade, with recommendations for measurement across all channels, both online and traditional. This latest version of the principles allows PR departments to provide robust credentials – but whether they are universally or even widely recognized outside the public relations sector is questionable.

Most C-suite executives remain focused on familiar metrics, such as ROI; share of voice; website traffic and sales figures boosted by campaigns; and less sophisticated AVE-style benchmarking. Fostering understanding of the principles among the C-suite is a job for the internal communications leader – if you’re claiming to add value, you need to educate people to interpret the metrics you’re providing. 

In the post-pandemic era, we’re seeing a heightened influence for the head of corporate affairs – including a seat at the executive committee table – and perhaps even promotion to a combined corporate affairs director and crisis management leader. This is the result of PR directors stepping up to defray uncertainty and address the issues that were resonating with stakeholders during Covid: protecting corporate reputation among customers, reassuring shareholders, and keeping employees informed of company developments. Success in stakeholder engagement doesn’t just reinforce corporate reputation and brand awareness – it gives the PR function influence over the bottom line. 

But while they may now be rubbing shoulders with the decision makers, PR leaders won’t become a permanent fixture at the table if they can’t continue to prove the value of their department’s output. Public relations must keep on delivering in a measurable way – and that means demonstrating return on investment. ROI remains the number metric that the majority of C-suites look for. They want to see that PR has a direct financial benefit to the company, and that requires the impact of PR outcomes on the bottom line to be included in all communications reporting.

Vanity metrics demonstrating how many people saw your campaign are meaningless unless they are presented alongside the action those people took as a result, and how that affected the company’s profits. And while frameworks such as the Barcelona Principles are useful in terms of broader business impacts, I believe it’s imperative for PR leaders to remember the money.

The need for accurate value metrics to measure PR success isn’t just about keeping a seat at the top table. In the current economic climate, most businesses are tightening their belts, and each department is having to compete for its share of a smaller budget allocation.

Even if they’re not familiar with the Barcelona Principles, executive committees are becoming better versed in a wide variety of performance metrics and measurement – and they will expect to see value reporting from all departments. It’s incumbent on the PR function to demonstrate the value of this research framework, which goes beyond a spend and return ratio in assessing the value of corporate communications. The worth of reputational currency and a positive brand profile is a more complex algorithm, which requires a more nuanced set of measurements. 

It isn’t just the CEO and CFO who need to be kept informed of the value public relations is bringing to the company. Potential investors are looking for wider data sets beyond the P&L that will help them gain performance advantage for their portfolios. They want information to back up their investment decisions, not anecdotal evidence or press clippings. And that means instituting a rigorous set of metrics and a robust media monitoring process that demonstrates PR outcomes. 

Among other stakeholders, the performance of the PR department is measured in how well they craft communications that speak directly to their needs and priorities. Measuring that requires something more than facts and figures – wherein lies the value of the Barcelona Principles.

Matt Cartmell’s experience covers the worlds of PR, communications and journalism. He has worked as a PR agency consultant, before becoming PRWeek’s news editor, and then joining the PRCA as deputy director general – finally launching Carta Communications in 2019.