Attention must be paid to such a woman...
Katie is adamantly opposed (thank you very much, KD!) to the use of Advertising Dollar Equivalents or Advertising Value Equivalents, whatever you want to call them. This is where you measure the column inches of the story and multiply it by the dollar-per-inch advertising rate of the publication to get the value of the article. Agencies have been able to get that metric past unsophisticated clients for a long time.
Katie's now suggesting PRV, or PR Value Ratio, a measurement of the COST of achieving article placements, rather than the VALUE of the placements, to demonstrate the efficiency of PR -- by at least one order of magnitude -- over advertising.
As Katie explains it, "... if research reveals that your earned media has reached a million pairs of eyeballs with your messages that would be a significant milestone. More importantly if it reached those million eyeballs at a fraction of the cost of buying the same eyeballs (i.e. advertising), that would show that PR was contributing in a big way to the organization's bottom line. So for example if the annual PR budget is $100K and the Ad budget is $1 million and both deliver the organizations key messages to 5 million eyeballs a year, PR delivers the same output for a tenth of the cost so the value ratio would be 10:1."
It is becoming increasingly essential for practitioners to demonstrate hard dollar value from corporate PR expenditures, because it has traditionally been seen as a "soft-dollar" cost center that doesn't add anything to revenue. We need to prove that what we do is cost-effective, or when the lean years arrive, we will simply get carved away like the wings on a Thanksgiving turkey. Kudos, Katie!
Trackback URL for Katie's blog posting: http://www.typepad.com/t/trackback/3926587