In business, it’s all about sales transaction in the end. Well, what’s was the beginning and in the process? It’s all go back to PR, branding, marketing, referrals, after-sales services, and the list goes on.
You know, it’s hard to measure ROI in PR and branding, that’s because it’s not leading to sales directly.
So I went to do some research to find the PR value calculation. Oh boy, it wasn’t easy at all.
We used to tell you the old calculation which is ADVERTISING RATE x 3 = PR VALUE. But how to evaluate online PR if you are unable to measure the advertising charges?
Now, with the internet, the PR branding spreading viral and it’s just evolved.
So, how to calculate the PR value? Referring to the article I found from buzzstream, the simplified terms that I could search for is tip nominated by Steven Giovinco.
- Determine an average customer value
- Multiple that value by 30 = PR value
And then, I was like, now what the heck is customer value? Went to google it, and found the calculation from inc.com; this is how you calculate your customer value:
Determine revenue per customer minus any attributable costs to servicing that customer, including cost of goods, cost to service, etc.
Sound complicated? Find out your customer value at here: http://customerlifetimevalue.co/
Okay, another manual calculation would be:
The standard ROI formula:
(Earned Media Value/ PR Value – Investment) X 100
You definitely know your investment = quotation you get or the charges you going to charge your client, if you are a PR agent. Now, how to calculate ‘PR/ Media Value’? I couldn’t find the right answer!
Some will be easier if you own the website, or you have specific shorten URL link, as you could tell how’s the traffic stats. But if it was meant for purely branding without hard-sell methods, PR agencies, you might need to consider few PR calculation as per below:
Source from smallbusinesspr.com
- Social Reach Based
What: Social reach refers to the amount of people who saw your brand socially. This number is not necessarily dependent on the sheer volume of social shares, but more-so on how socially influential the person that’s sharing is.
How: Determining who shared the post, and how many social followers/friends they have. For instance, if person who shares on twitter has 1,000 followers, then that’s worth $1,000 if each tweet is valued at $1. (How do I know that is the cost of one social media tweet?) If that tweet gets retweeted by 10 people, then you must determine who retweeted it, and the sum of their followers. The total media value would then equate to the total number of aggregated friends/followers multiplied by the cost per social view.
2. Impression Based
What: Impression based tracking has been around since the early days of online advertising. Simply put, it’s anytime your brand is displayed to a user. In the content world, an impression can mean anytime someone sees your brand’s name written or expressed via an image or video.
How: Impression based includes the method described above to calculate reach, except each instance your brand is mentioned counts separately. For example, if your brand is mentioned 3 times in a Facebook post, then it’s impression value would be 3 multiplied by the total number of friends/followers. Also included would be the number of brand mentions like a blog post, advertisement, or any other mentions multiplied by the total number of views.
Read some article, it was mentioned as cost per thousand impressions was at the value of $5. Alas, no one gave the right value or answer yet!
3. Conversion Based
What: This is the simplest method, yet hardest to optimize for. How much of that media spend does it take to convert a user? A conversion can mean anything from a newsletter sign-up to a purchase of a product or subscription. (I think this is part of the hard-sell method)
How: You take the cost of your total media spend and you divide it by the number of converted users. Tracking converted users can be challenging, especially if you don’t use proper link tracking. In any media purchase, if you’re trying to optimize for this, it would be wise to have special URL parameters for this particular campaign, as well as tracking pixel on your conversion page so you can track users throughout the funnel.
4. Engagement Based
What: Tracking any engagement of a user on a content piece and rating has value. An engagement can be anything from mouse movements, scrolling intensity, mobile pinch-ins, and encompasses aspects like social shares and comments.
How: The actual calculation can vary depending on how you rate the value of each engagement. An easy way would be to assume constant values for each engagement, and then multiply that engagement constant times the total of that engagement. It may make more sense to do this on a per-user basis so that you can keep better track of outliers.
In conclusion, turned out there’s no proper formula to calculate the cost of PR value manually. So, I couldn’t think of how to calculate the ROI. Well, if that’s the case, I prefer Steven calculation.
Or to do this manually, I will assume one impression at the value of $1, and then the formula is:
Total impression/ views x $1 x 3 (AVE method) = PR ROI
Sorry guys, but if you are against the AVE method, you gonna spin around but provide a confusing report to the client. Plus, not everyone can really give you the sales value, especially PR & branding is not meant to be sales-driven approach anyway.
Does anyone be able to enlighten me? If you happen to have any manual calculation to calculate PR value, please do share with me.
Complicated? Well, to save you from all these wordings and maths thing, there is a variety of social media analytics tools such as Google Analytics or Hootsuite Analytics, where all you need to do is just key in the numbers, and the analytics will do all auto-calculation.
If your campaign is sales-driven with special URL link, and to evaluate social media ROI: https://www.quicksprout.com/2014/06/27/how-to-calculate-the-roi-of-your-social-media-campaigns/
Apart from calculating PR ROI, here are some tip you need to plan and think of: http://www.forbes.com/sites/ilyapozin/2014/05/29/5-measurements-for-pr-roi/#2b347cdd1ca2