PR gets the jump on advertising's effectiveness - Research MMHK March

What are the drivers of brand values? Product quality, customer services and advertising are some of drivers most commonly cited and studied. Until now there has been relatively little research into the contribution of public relations to brand values.

Text 100 and its research arm Context Analytics have released their findings from Interbrand's Best Global Brands study which shows that the role of public relation maybe have been somewhat undervalued.

The Media Prominence Survey suggests that as much as 27% of a company's brand value is tied to how often the brand name appears in the press. The survey also claims that the effects of advertising can amount to just 2% of the overall brand value for products with a high level of complexity, while PR activities can make up 47% of a brand's value.

This is not good news for advertising, in particular for tech brands, which were singled out for the strong link between PR and brand values.

The research shows that big tech brands like Amazon, Apple, Cisco, Dell, eBay, Google, HP, IBM, Intel, Microsoft, Oracle, SAP and Xerox which benefit hugely (48%) from PR activity.

But Aedhmar Hynes, Text 100 CEO, was quick to admit that the results would draw criticism.

"Cynics will likely question the report because it is being distributed by a public relations company, but I strongly encourage you to review it and keep an open mind," he says.

"It is not impossible to draw connections between how much a company spends on PR and how much value the company is creating. I fully expected that public relations would prove to play a crucial role in the marketing mix. I'd be in the wrong business if I felt otherwise."

Rowan Benecke, regional consultancy director at Text 100 Asia Pacific, argues that in today's recessionary climate, many companies are assessing where to allocate their marketing budgets. He says that the Media Prominence findings reinforce that PR is a cost-effective tool that delivers real business value.

"Often at a fraction of the cost of advertising," he adds.

"With our Media Prominence Study, we set out to help our clients calculate the return on investment they receive from public relations and quantify the impact PR campaigns have on real business metrics such as sales."

The research has led Text 100 and Context Analytics to create a model that calculates the return-on-investment companies receive from public relations.

Companies can quantify the impact of public relations activities on business outcomes such as sales and stock value, something that has been elusive in the PR industry for years.

With this information, companies can determine which aspects of their media coverage have the greatest impact on their business and use every dollar wisely.

"One of the goals in undertaking this study was to demonstrate that the value of PR becomes much clearer when media metrics are tied to business and brand value," Nils Mork-Ulnes, vice president at Context Analytics, says.