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1、AnAn initialinitial investigationinvestigation onon thethe useuse ofof ReturnReturn onon Investment”Investment” in in publicpublic relationsrelations practicepracticeAbstractReturn on Investment (ROI) is usually defined in management and marketing literature as a measure of financial effectiveness t
2、hat is concerned with the returns on capital employed in business (profit-making) activities. In public relations practice, however, ROI appears to be used in a much looser form to indicate the results of activity. This quantitative research using an online survey instrument investigated practitione
3、r understanding of the term, primarily in the UK, with the aim of preparing a benchmark on their understanding of the ROI concept and usage of ROI as a measurement of the effectiveness of public relations activity. These findings resulted: (1) two-thirds of PR practitioners regularly use the term RO
4、I when planning and evaluating communication activity; (2) ROI is related mainly to communication objectives (66.7%) which are more widely used than financially related ROIs (12.8%); (3) there is a clear difference in ROI practices between consultants/freelances and in-house colleagues. Nearly three
5、-quarters of consultants and freelances (73.1%) offered an ROI formula to clients but only 26.3% of in-house practitioners have one; and (4) on the oft-discussed question of an industry-wide ROI formula, only 35.6% supported the proposition with 64.4% opposed. The survey also found that practitioner
6、 concepts of ROI are very narrowly expressed, mainly in relation to media outputs.Highlights Two-thirds of PR practitioners regularly use the term ROI when planning and evaluating communication activity. ROIs related to communication objectives (66.7%) are much more widely used than financially rela
7、ted ROIs (12.8%). There is a clear difference in ROI practices between consultants/freelances and in-house colleagues. Nearly three-quarters of consultants and freelances (73.1%) offer an ROI formula to clients but only 26.3% of in-house practitioners have one. On the oft-discussed question of an in
8、dustry-wide ROI formula, only 35.6% supported the proposition with 64.4% opposed.KeywordsMeasurement and evaluation; Public relations; Return on Investment (ROI)1. IntroductionReturn on Investment (ROI) is defined in management and marketing literature as an outcome performance measure of financial
9、effectiveness that is concerned with returns on capital employed in business (profit-making) activities ( Drury, 2007 and Moutinho and Southern, 2010). The Dictionary of Public Relations Measurement and Research places ROI as “an outcome variable that equates profit from investment” but does not att
10、empt to classify a public relations ROI, other than as a “dependent variable” (Stacks, 2006, p. 24). The UK professional body, the (now) Chartered Institute of Public Relations defined it as “a ratio of how much profit or saving is realised from an activity, as against its actual cost which is often
11、 expressed as a percentage” (IPR/CDF, 2004, p. 15). In public relations practitioner practice, however, ROI appears to be used in a much looser form to indicate the results of activity.The term has been in public relations discourse for at least 40 years. Black (1971) commented that it was “fashiona
12、ble” to measure ROI in business, “but in the field of public relations it has little significance” (p. 100). In the late 1970s, ROI was sometimes expressed as equivalent to advertising value (Marker, 1977). Watson (2005) found that the term was not widely used or recognised in academic discourse. Ho
13、wever, Gaunt and Wright (2004) found that 88% of a sample of international public relations practitioners was interested in an ROI tool and 65% considered that ROI could be applied to judgements on public relations effectiveness.Gregory and Watson (2008) also noted that use of the term ROI was extan
14、t in practice and called for greater academic engagement with practice issues such as the use of business language, including ROI, and communication scorecards.Professional literature and practitioner discourse (cf. European Measurement Summits and the IPR Measurement Summits), however, clearly show
15、 that ROI is a term widely used, if not tightly defined. In 2004, the UK media analysis firm Metrica undertook a study for the (then) Institute of Public Relations which found that 34% of respondents considered public relations budgets in terms of ROI and 60% used a notion of ROI to measure public r
16、elations in some way. It summarised the responses as, “some inclination towards seeking a form of ROI that could be applied universally” (IPR/CDF, 2004, p. 6) As well, Likely, Rockland, and Weiner (2007) proposed alternatives to ROI with four models which each have a Return on prefix.2. Research method and instrumentTo investigate the current state of attitudes amongst public relations practitioners about their notions of ROI, a scoping survey was undertaken ma
