Mar 23, 2018 / by Alex Dunner - Admin

Do you feel like it’s getting harder to justify your public relations budget? If so, you’re not alone.

PR and marketing practitioners will find it increasingly difficult to justify their marketing budget to get approval for their initiatives. Therefore, demonstrating ROI becomes more important than ever to the C-Suite.

As a Director of Marketing, I find myself in a similar situation not only during ‘budget season’ but also throughout the year. With that, I’ve gone searching for further answers on how to continuously prove the ROI of PR strategies in order to justify my ongoing budget. I sat down with my VP of Marketing, Russ Somers, who owns our PR budget, for a discussion about this topic. This discussion turned to an interview-style webinar. Here’s a breakdown of that talk.


Where are you spending? What are you delivering?


[Dave]: Russ, let’s pose a question to the audience: Will PR spend for 2018 remain flat, increase, or decrease. Lots of folks here are staying flat. What do you make of that?


[Russ]: That makes me wonder, when the C-suite says, "We're going to spend about what we spent last year," are they also saying, "And we expect about the same results as last year?" It's probably not because "Do more with less," is a common dream.  So, I wonder if the expectations on return have changed.


[Dave]: As part of the C-suite, what would keep the PR budget flat or even have it decrease this year?


[RUSS]: To me, remaining flat is sometimes a risk-averse approach. I know I need to spend money, but I'm unsure of the return I get. So, I'm going to hold it constant because I don't know if I completely cut that spend, do I lose a lot of sales? I don’t know.


[Dave]: We asked the audience where they intend to spend the highest percentage of their PR budget. Some people said the media database, others said events or monitoring software, but the top vote-getter was outside agencies. Does that surprise you?


[RUSS]: No. That tracks with data from the Holmes Report that shows where PR spend goes; and, it tends to be very much on manual work on agencies as opposed to on technology. Technology software is certainly on the rise as a percentage, according to Holmes Report numbers, but it's still very much an industry dominated by people doing work by hand. Which on the one hand is great, you want people doing their highest and best work. And on the other hand, one of the reasons I've been in software for so many years is I believe that software can make it easier for those people to do their jobs.


[Dave]: When it comes to budget, let's talk about PR and living underneath the C-suite. If I'm coming to you and I'm asking you for more budget, and I’m aligned with company goals, what would you be looking for to substantiate a budget?


[RUSS]:  Well, let's start getting down to the brutal reality of it. Companies have a fixed number of dollars to spend. And just like your household budget, if you spend a dollar going to a movie you can't spend that same dollar going to dinner. You have to make choices. When the PR professional comes back and says, "Here is how I'm going support the company initiatives," I then have to look at that against what the other teams and functions are doing to support those company initiatives. Often, there are not enough dollars to go around. So, I find myself saying this function or role does a better job of supporting the objective than another function or role. I allocate my dollars that way. If my primary objective is the number of product launches, and I believe that paid media can support those product launches better than earned media, I will unapologetically put most of my chips down on paid media. That's the core, is proof that your function better supports those company objectives than another place I could spend that dollar.


[Dave]: You mention ‘earned media.’ If I’m seeing some excellent traction in earned media and feel like I need to double down, what is the best way to convince the C-suite to invest more?


[RUSS]: One of the most powerful things you can do to expand your budget is to discuss how your earned media can help with paid, shared, and owned. The coverage we get drives our blog and drives our owned properties. The coverage we get is fuel for our ad campaigns that we push out through paid media and retargeting. The coverage that we get is socially amplified. Rather than simply tweeting, "We think our brand is great," you're able to tweet out all your media mentions and coverage and say, "This third-party journalist that reviews smartphones all day thinks our smartphone is the best." So it adds, that's again putting that credibility into the marketing mix.


[Dave]: Russ, the folks sitting in the C-suite are putting pressure on PR teams to deliver. Why is getting a PR budget that aligns with the expected result so difficult?


[RUSS]: Most PR pros have managed to become an expert on what results they’re driving, and they know that area better than anybody else. The problem is sometimes a translation issue, they communicate in a way that doesn't roll up to the language that the CMO, CFO, CEO can understand. So, they have to figure out how to communicate budget in a way that the target audience, which is the C-suite, understands and responds to. We want them to say, "I understand your results and hey, we better take your budget up, not down."


[Dave]: One thing that our team recognizes is that it is imperative for the PR pro to be in tune with the company goals. You mentioned cross-functional collaboration with other areas within an organization. Some common themes could be expanding into an international market; it could be growing new business, increasing customer retention. There are many things that a PR pro should be cognizant of when they are thinking about company goals. Do you have anything to add to that?


[RUSS]: It's difficult to set PR and communications goals if you don't understand company goals. So you need to know, are you launching new product lines, are you expanding into new markets or what have you and then develop the media strategy, the PR strategy that supports those objectives. If people come to you and say, "What are your communications objective for 2018?" You should always answer that question with a question. If you don't know you should say, "What are the company objectives and initiatives for 2018," and then I can craft communication objectives that support those.


[Dave]: Is proving the ROI of earned media the final hurdle when asking for an increase in your budget?


[RUSS]: Prove the value. Many folks are getting mentions, they’re getting coverage, but they’re not necessarily stepping outside of the earned quadrant in the PESO Model (pictured left) to talk about how that's affecting the owned quadrant by driving website traffic and potentially conversions.


[Dave]: Folks on the demand generation side of the house are always talking about the lead funnel. But there's a different funnel that communicators should be looking at and that's the Communicator's Funnel. From measuring brand impact to digital, all the way to the bottom line. Take us through that and let us know your thoughts on here and why it's essential.


[RUSS]: The communicator’s funnel is a way of organizing things you already know you have to track. You understand you want to measure social amplification, influence, pipeline conversions, revenue, mentions, total coverage, etcetera, but those need to be organized on some framework if you are going to make them comprehensible to your C-suite. When it comes to communication, you're smarter than they are and so you need to organize the message, so they understand it.


The communicator's funnel organizes things into three levels. The first is brand impact. That's where you're capturing the impact on awareness, mindshare, reputation with metrics like headline mentions, share of voice, sentiment, things such as that. Once they become predisposed to do that, you move on to digital impact. Now they are hitting your website, hitting your digital properties.


And then the final level of the funnel, the bottom-line, is the piece that every C-level executive will want to cut straight to, but you need to talk through the parts above to prove the bottom-line impact. If you frame your metrics around each of these levels, brand, digital, and bottom-line, you can have a crisp and straightforward conversation that even a C-level executive can understand.


[Dave]: With the right technology, you can provide insights into industries, topics, competitive plays, influencers, or however you're structuring your marketing campaigns. So, I think, it's very important for PR to make those investments and to produce those insights into actionable data, would you agree with that?


[RUSS]: Couldn't agree more. Data is great, but I need to know what to do with it. If you get into the idea of the marketing technology stack, what you will find is paid media, owned media and shared media, so the person running your website, the person buying your ads, the person running your social, they're already working out of a technology stack that sort of plugs together, integrates, exchanges data. A lot of times the person running PR, communications, and earned media is not plugged into that stack.


They're the person least likely to log into HubSpot, Salesforce, Web Analytics, etc. That risks putting PR in a corner. And as Patrick Swayze says, because we do love our pop culture references, nobody puts PR in a corner. It falls to you as a person in charge of that, to make sure you're not in that corner, to pull Jennifer Grey out of there and put her where she belongs.


[Dave]: What about companies that don't have a large budget to spend on a PR analytics tool or intelligence platform. What sort of things could they be doing to justify budget and prove ROI?


[RUSS]: There are a couple of things they can do to get things rolling. Craft the company narrative. You may be doing press releases, or you're doing something else to get that narrative out in front of people. Rather than spamming those out over wire services, you may look at publishing those to your blog or to a separate blog site so that you have that sort of company narrative all out in one place where you can link to it, send people to it, let it drive search engine traffic for you, etc.

Use email outreach software to make your story pitching more effective, more automatic, so that you can spend more time crafting the story and identifying the few right journalists to send it to, and less time copying and pasting in Outlook or whatnot.

Partner with your Web analytics team and so they can get the data on traffic that you're driving, the pipeline that you're influencing, etc. Most of those people are more than happy to talk data with you, and that gets you a starting point so that you can start proving some value.


All in all, it was an extremely productive conversation with Russ. I learned, and would like to share this one thought with our readers; give your boss a reason to have faith in your efforts. Executive teams must be able to understand your PR Strategy contributes to your organization’s overall bottom line before they’ll understand why they should increase your budget. Check out our discussion in its entirety or request a customized dashboard and get on your way to proving the ROI of your PR strategy.



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About Alex Dunner - Admin

David's a Demand Marketing Strategist that’s spent the last two decades working in PR and marketing for multi-million dollar brands and startups developing creative growth strategies and communications plans to jump-start new opportunities. David is currently the Director of Segment Marketing at TrendKite leading a high-performing marketing team in the development and execution of ABM strategies.