Can you compare the sales impact of a PR mention to the sales impact of a TV ad?
Ronnie Choudhary, Strategic Modeling & Forecasting Specialist for The Miller Brewing Company, has devised a formula he believes does just that.
According to Choudhary, the PR department at Miller Brewing was not isolated from marketing and advertising, but they were not exactly on the same page either. He says, "PR is rarely included in management planning, partly because there has been no way to measure its results. From a corporate point of view, not much importance is given to PR when thinking about an overall brand strategy,"
However, Choudhary suspected data would prove that PR was more critical to brand launches and sales than anyone thought. He explains, "Having someone else talk about your brand has more impact than talking about yourself through advertising."
Over the past year he has developed new formulas to measure PR effectiveness.
"In the past, we looked at gross impressions and favorable comments, and other PR metrics," Choudhary says, "but we never looked at the impact on the bottom line."
First, Miller Brewing now takes into account five details in their PR coverage to help them measure the net effect of particular PR impressions:
1. Extent of coverage Where was the article placed? How many readers saw it? Was the article picked up by other newspapers or magazines? Which ones?
2. Nature of the visual Did photos accompany the article? How many photos? Were they in black and white or color? What was the size of the article and of the visual?
3. Dominance What was the placement of the article? Was Miller Brewing mentioned in the headline? Was it on the front page? What section did the article appear in? Was the article at the bottom of the page? The top left corner? Was it buried in the middle of a section?
4. Initial mention. When in the article was Miller Brewing and/or the brand first mentioned? In the first line? The first paragraph?
5. Tonality. Was the article or editorial positive or negative?
Values are given for these attributes to reach an overall impact score. The overall impact score is then multiplied by the magazine or newspaper’s circulation.
Miller Brewing bases advertising-to-sales metrics on a regional basis, so the new PR calculations also now focus on regions. If the PR mention is in a national publication, Miller Brewing breaks down circulation by each sales region to determine impact.
Then by using a standard regression model, Choudhary isolates product sales in that region and compares that to other regions.
Next, to determine return on investment, he includes the following three metrics:
1. Contribution What percent of the total volume of sales is attributed to the medium?
2. Effectiveness How much sales volume is generated per million of impressions?
3. Efficiency How many dollars are brought in from the advertisement/PR article vs. how many were spent?
"You take these three measurements and compare them across a number of different brands and you begin to see how PR can be effective if integrated into a total strategy," Choudhary says.
"By isolating and reporting on the individual medium, we can look at the net effect of PR and TV in the same model," says Choudhary.
Choudhary is quick to point out that measuring Internet PR is still a work in progress for this regionally-based system, because much of the "Internet can’t be mapped to a particular geographic place."
So far Choudhary's new measurement system has revealed that PR efforts can create far more substantial lifts in sales than anyone at Miller Brewing previously believed.
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