At the same time, PR initially generates costs that are not directly offset by a monetary countervalue. PR work is long-term – in contrast to marketing, which tends to aim to increase sales in the short term. This makes it more difficult to determine the contribution of PR to value creation. For PR managers, this is a difficult balancing act: how can investments be justified? How can they use human and financial resources effectively and efficiently? In short: how can the value contribution of public relations be measured? Well, let me tell you.
Making PR work measurable as a value driver of corporate success
The evaluation and control of communication tasks is a classic task of communication controlling. The term is vague – not least because the two words that make it up – communication and controlling – are also difficult to define. However, experts agree that communication controlling is an important management tool in corporate communications and provides the basis for allocating resources effectively and efficiently and creating transparency. However, there are special challenges for controlling in communication, because a pure input/output view does not do justice to the area of public relations. This is due to the fact that communication – after it has left the company boundaries — does not yet represent a measurable value. Communication measures differ fundamentally from products or services that can be priced. Instead, downstream target values are to be considered whose effect on the company only becomes apparent later. But how do you measure trust and reputation? A comparison of PR costs with purely economic parameters is not sufficient or effective.
The ICV/DPRG reference framework of communication controlling
The International Controller Association (ICV) and the German Public Relations Association (DPRG) have developed an impact level model for communication controlling in order to describe and concretize the relationship between expenses and benefits. In addition to input and output, it contains two further target variables – so-called outcome and outflow. The input, i.e. the cost side, comprises all production factors that the company brings into the communication process. This includes internal personnel costs as well as expenses for agencies and other service providers. The output comprises the results of the internal transformation process, both internally and externally. The main challenge here is to maximize reach, which can be measured by key figures such as press clippings, downloads, visitor numbers on the website, or involvement on social media. Reach, however, only says a limited amount about how well the measures have been received by the target group. This happens in the outcome, which looks at the actual contact quality. The model differentiates between the direct outcome and indirect outcome. The direct outcome measures perception, knowledge, or awareness with KPIs such as recall and recognition, unique visitors or readers per article; the indirect outcome means a change in attitude, opinion or behavior; it is not about knowledge but about emotions. The last stage of the basic model is the outflow, which describes the influence of communication measures on tangible and/or intangible resources or strategic and/or financial targets. What contribution does communication generally make to the added value of the entire company? Relevant key figures here are sales or turnover or brand or company value, but also the fluctuation rate or customer proximity of employees.
From the ICV basic model to the OKR system
That’s the theory, but what does that mean for the practice of startups? The basic model of ICV and DPRG is a well thought-out, consistent frame of reference that offers valuable impulses for key figure-driven public relations work. However, even for large corporations it is only associated with considerable costs to measure key figures such as brand awareness or reputation. Usually, this can only be achieved through extensive surveys conducted by market research agencies. Such expensive controlling instruments are not available for startups. Startups therefore often act within a so-called OKR target framework. OKR stands for “objectives” and “key results” and describes a collaborative protocol for setting company goals and controlling the degree of achievement. It was introduced by Intel co-founder and successful manager Andy Grove in the 1970s and was disseminated by his employee and student John Doerr. In his book, Measure What Matters, Doerr explains: OKRs are a tool for making decisions, coordinating measures and weighing them against each other. The goals — or objectives — are the “what.” They are aggressive, clear and tangible, and they must make a clear contribution to the company’s success. The key results are the “how.” They describe measurable milestones, i.e. results, and not activities. Each unit of the organization sets itself quarterly qualitative goals, which are backed up with quantitative results. The goals of subordinate units must pay into the higher-level goals — down to the level of the personal employee goals. This results in a cascade of objectives and each individual employee works consistently towards the company objectives. The degree of achievement is checked weekly; under certain circumstances, goals are reformulated or resources are reallocated. Doerr emphasizes: OKRs thus help to focus on a few central goals. They document progress and relate the current and target situation to each other. OKRs think big, not small. They set ambitious goals that are deliberately formulated in such a way that they cannot all be achieved. Above all, however, the OMC system makes it possible, to prioritize when people have different or contradictory goals.
Under the microscope: OKRs in practice
Without clear goals, any controlling system is impossible — all measures and milestones must be aligned to a specific goal. OKRs are a valuable tool for companies of all sizes to map and align target hierarchies. However, they are particularly suitable for the agile environment of startups. Startups plan in short cycles, without many years of experience, with fast-moving adjustments to the marketing strategy, short product development phases and constant fine tuning of the business model. For PR, the OKR system is associated with challenges. While it is easy to derive qualitative goals, it is much more difficult to translate them into quantitatively measurable key figures. Instead, potential targets are more appropriate, but strictly speaking they run counter to Grov’s principles. Possible targets are to increase the number of press clippings, conference participations, new followers on social media, or increase organic traffic to the company’s website. As with the basic model of ICV and DPRG, the OKR system provides a framework rather than fixed targets and indicators. It helps to control communication. This is its great strength. However, communication controlling not only thrives on clearly defined goals and parameters, but also on determining the contribution to added value that is indirectly reflected in the number of applicants, trustworthiness, attractiveness of the brand and many other indicators. Comparative values are also needed in PR. This is exactly what is often lacking. Without any measurement, however, no comparative value can be determined. For the OKR system to really make sense, surveys among the stakeholders would therefore also be useful here. Otherwise, the OCR system concentrates too much on the output level and too little on the downstream stages of outcome and outflow. Thus the question also arises in this system as to how changes in attitudes among investors or the image of the company among consumers can be determined with justifiable effort. To make the success of communication measurable at the level of the downstream impact levels without extreme effort — the OKR system and the frame of reference owe that.
Conclusion
Startups are under pressure to succeed — PR success, however, often only comes after many months or years and sometimes only pays off in the event of a crisis. Startups are therefore particularly dependent on appropriate communication controlling. A pure input output analysis of PR, however, only provides a statement about the internal process quality of the communicative added value. The actual added value takes place at downstream levels, which are much more profitable for the company in the long term. The ICV/DPRG reference framework promises what it delivers: it creates a reference framework for communication controlling that must be filled with life. It does not create less — but also no more. Against this background, the OMC system offers a good starting point for measuring the value contribution of communication at the level of output and outcome through key results. At the same time — and this is at least as important for a startup — the OMC system provides clear corporate goals, so that the PR goals also pay directly into at least one corporate goal — otherwise they do not fit in with the thrust given by the management. OKRs force employees to question their daily actions every day and to go creative and unusual ways. They do not replace extensive market research and do not prevent the wrong goals from being sometimes pursued. But especially for small companies they are an opportunity to set ambitious goals without “burning” money or losing one’s grip on the ground. Between megalomania and blind activism, they are a compass that is often neglected in PR.
