Return on Investment in Public Relations: A critical assessment of concepts used by practitioners from the perspectives of communication and management sciences.

Abstract

Return on Investment (ROI) is a term commonly and non-specifically used by public relations practitioners when discussing the value to be created from communication activities. It mimics business language, particularly from business administration and financial management, but does not figure widely in academic discourse (Watson, 2005). Although the Institute for Public Relations [now CIPR] undertook a review of ROI practice in the United Kingdom (IPR/CDF 2004) and Likely, Rockland & Weiner (2006) proposed variations of ROI as alternatives to the discredited Advertising Value Equivalence (AVEs) measure of value creation, there has been little discussion other than Macnamara (2007) and Gregory and Watson (2008). This paper gives an overview on the views of ROI in public relations literature and concepts used by agencies and providers of measurement services. It reports on survey research amongst practitioners in several European countries on identifying the economic value of public relations. The findings are compared with the concepts of ROI used in business and accounting literature (Weber and Schäffer, 2006; Drury, 2007). Applied theory and parameters for the development of measurement and evaluation techniques are proposed. The paper concludes that the use of the term ROI in public relations needs a proper foundation in overriding management theory; otherwise PR theory and practice will discredit themselves.