An initial investigation on the use of ‘Return on Investment” in public relations practice.

Abstract

‘Return on Investment’ (ROI) is usually defined in management literature 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. This mixed method research using an online survey instrument investigated practitioner understanding of the term, primarily in the UK. These findings resulted: 1) Two-thirds of PR practitioners use the term ROI when planning and evaluating communication activity; 2) ROIs related to communication objectives (66.7%) are more widely used than financial-related ROIs (12.8%); 3) 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; and 4) On the oft-discussed question of an industry-wide ROI formula, only 35.6% supported the proposition with 64.4% opposed. However, the survey also found that practitioner concepts of ROI are very narrowly expressed, mainly in relation to media outputs.