This piece in stategy+business caught my eye this morning, partly from my own interest in measuring PR results and also because it raises some interesting questions about how companies allocate resources.

PR practitioners are constantly being asked to justify our budgets in terms of concrete ROI. I am 100% in favour of that. Corporate communications is a core business function that is closely aligned with strategy and which needs to be able to hold itself to the same standards of performance as any other business division. The minute that communicators cease to focus on the success of the business as a whole they have lost the plot.

Advertising, I think, has created a big hole for itself by focusing on reach and message over impact and outcome. I recall GM once saying that their $2.8 billion advertising bill attracted 17% of the people who came into their showrooms. If you consider that a good salesperson might convert 30% of inquiries into sales, that number implies a very high cost of customer acquisition.

Part of the answer I think is to focus on conversion rates at different stages of the consumer cycle – how many people know the brand, how many consider it, how many purchase it, how many return to it and how many recommend it? Those are hard numbers that a communications professional from any discipline can put in front of a CFO to support marketing spend in a given area of activity.

However if communicators (including PR people) continue to justify our activities by the number of eyeballs we get in front of or the number of clips we generate, we can hardly complain when the people who control the budgets ask “So what?”

And if we can’t answer that basic question, we can’t complain when the budgets go to people who can.