What does ROI mean? An investigation on the use of ‘Return on Investment” in public relations practice.

Abstract

Management literature defines ‘Return on Investment’ (ROI) as a measure of financial effectiveness that is concerned with the returns on capital employed in business (profit-making) activities. In public relations practitioner parlance, however, ROI appears to be used in a much looser form to indicate the results of activity. There have been reports into the role of ROI in PR measurement (CIPR 2004) which disputed whether ROI had real meaning in the public relations context. Watson 2005 found that the term was not widely used or recognised in academic discourse. Professional literature and practitioner discourse (cf. European Measurement Summits and the IPR Summits on Measurement), however, clearly show that ROI is a term widely used, if not tightly defined. As well, Likely, Rockland & Weiner (2007) proposed alternatives to ROI with four models which each has a ‘Return on’ prefix. This mixed method research investigates the practitioner understanding of the term with the aim of bringing best practice in public relations measurement together with the language of public relations and corporate communications practice. The initial sample will be taken from the UK. It is planned that it will be expanded internationally to central Europe, the Far East and North America.