On the importance of making an impact through communications: ROI vs. IOI
As PR and Communications specialists we are constantly called on to value our efforts and justify our work in terms of Return on Investment (ROI), a language the bean counters and number crunchers of the world can understand. The two most widely established and accepted ways of doing so are: Cost per Impression (CPI) and/or Advertising Value Equivalency (AVE).
To determine CPI, take your entire communications investment for a certain campaign, divide it by the number of media penetrations or total number of audience impressions. For AVE, you simply calculate the equivalent ad value of a certain placement. This strongly suggests that a news story of a particular size has equal impact to an advertisement of the same size in that publication, however there is no factual basis for this assumption.
While these simple and elegant formulas are great for measuring costs and savings, and thus ROI, they are of little to no real value to communicators looking to ascertain the true worth of their efforts, or of a certain message or campaign. As such, if all clients care about are impressions, then agencies and consultants will give them impressions. But ask yourself this: What is an impression worth if circulation numbers are inaccurate, or if the message wasn’t understood and no attention paid to it? Absolutely nothing.
To distil PR and Communications to these two simple and outdated metrics undervalues our efforts and undermines our work as communicators. As such, I believe we must elevate our profession to the next level. Instead of ROI, let’s think about Impact of Investment (IOI). Instead of CPI and AVE, we should lay the foundation for Receptiveness, Attention and Understanding to be the key indexes of communication effectiveness with Behavioural and Attitude Change at the apex of our work structure. Now the real question is: Where do we start?
