Are you leaving money on the table (when growth is your biggest priority)?
Businesses spend almost 10-times more of their marketing budgets on advertising than they do on PR. Yet evidence shows that PR generates a significantly higher ROI. Here we attempt to explain why marketers continue to ignore the evidence and waste their ever-tightening budgets, and why they must rethink the way they spend their budgets to ensure they can optimise their results.
A recent report found that the number one priority for marketers, and those responsible for the promotion of their businesses, is lead generation. No surprise there given the current market.
This is followed by client retention and brand awareness – informing (and reminding) the market of who they are and how they help companies to overcome the key challenges they face.
All of which prompts the question: what are businesses doing to achieve these priorities?
Where are businesses spending most of their marketing budget?
Research is showing that the primary method of promotion used by businesses is advertising on relevant industry websites, regional press, trade publications, and business media.
Indeed, UK businesses are currently spending £36 billion on advertising. PR spend, by comparison, is a lowly £4 to £5 billion. Yet, according to Nielsen and Forbes…
… PR is 90% more effective than advertising.
That does not make any sense. Why then, are businesses investing x9 more on advertising than PR when PR generates a x9 higher ROI than advertising? It comes down to one thing: habit.
Habits that harm organisational growth
With advertising, you have full control over the message you want to promote, when it appears, and who it reaches. It is easy to do and can easily be repeated; a habit. All it takes is a great visual and a compelling message. The number of people your advert reaches is determined by how much you pay for it.
PR is different.
- PR is less controllable than advertising. It requires a compelling story that you ‘sell’ to journalists and editors. This is hard to do; therefore, the human default is to fall back on habits that are easy to repeat.
- Attention is earned rather than paid for and the size of the audience reached is determined by the strength of that story, not your budget.
Aside from habit, there is another possible explanation for what seems to be the ongoing decision to waste vast amounts of a business’s budget, and that is measurement.
Advertising is super simple to measure. You can track views, click throughs, downloads, requests for information, and sales in real time. PR, however, has often struggled to demonstrate the impact it has, but it can still be measured.
For example, we track:
- Number of media mentions.
- Number of people who had eyes on the article/story that our client featured in.
- Number of people exposed to our clients’ stories via social media platforms.
- Share of voice versus our clients’ competitors.
- Visits, views, downloads.
There are literally 20 more metrics that can be used, but most clients really only care about the ones listed above. That’s because they address the following:
- Are we being seen, read, and heard by the right people, in the right way, at the right time?
- How engaged is our target audience in what we have to say?
- Does our brand have an authoritative voice that is positively perceived and credible?
Greatest ROI?
Employers can post a job advertisement and hope for the best, but a recruiter will increase the chances of that employer’s hiring success. Clients who regularly work with recruiters know this all too well. PR works in the same way.
Both require a proactive approach with a clear proposition that is aimed at a specific audience and each one will deliver a greater return on their investment. In the case of PR, a x9 higher ROI.
When planning your marketing spend for the final third of 2024 and H1 of 2025, take a moment to consider if sticking to what you have always done (advertising) is really the best way to deliver the lead generation, client retention, and brand awareness goals that you have.
The evidence suggests not, but is it too hard a habit to break?
