PR guru and academic Noel Turnbull writes:
The Victorian Government has commissioned NIER to work out how much the Grand Prix is worth to Victoria – the first study on the subject since 2000.
From comments made during the week it is clear how the Grand Prix organization wants to ensure that the right – big – number comes up. Speaking at a lunch during the week the Grand Prix CEO referred to the great value Melbourne gets from having its signage displayed on TVs around the world. The last review of the GP’s value also counted in a lot of free advertising – tens of millions – as a hardcore benefit to Victoria.
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But is it a benefit and how much of a benefit?
For many years the PR industry used to justify its existence and effectiveness by totaling up the media coverage obtained for clients; multiplying the rate card value of the space by some number (most conservatively three); and claiming that this was the value of the PR.
There are a few obvious problems with this approach – so obvious and so egregious that the Public Relations Institute of Australia ruled that such “measurement” was inappropriate. This is not to say that PR people stopped using it. Miscellany remembers an issues management job for a client which had run a major promotion which generated huge amounts of publicity – highly polarized and very controversial. The PR firm produced a report which totalled up all the publicity – good, bad and violently opposed; multiplied the rate card value by five; and then claimed this was the value of the promotion. However, most PRs have stopped the habit, partly because media coverage is not the sole gauge of success, and partly because the good media monitoring firms, such as Media Research Group run by Miscellany’s friend Michael O’Connell, now produce sophisticated analyses of coverage in which tone and message content are considered more important than equivalent advertising value.
But, even if the PR industry considers the approach too dodgy to support, that doesn’t preclude the GP and economists from considering it as an option. However, even within this context there are other problems. Exposure doesn’t equal value. Iraq has got a lot of coverage recently but that doesn’t necessarily mean that people have a greater propensity to visit or to invest there. The audience demographics and whether awareness of Melbourne provides a platform for some behavioral change – visiting or investing for instance – are also important. Equally, if one was evaluating a marketing campaign you would evaluate it partly on cost effectiveness. Thus, the GP media exposure might reach lots of people but does it need to reach them all for any Victorian objectives to be achieved. If it doesn’t, then any total value ought to be discounted for the amount “wasted”. Moreover, is the Grand Prix the best use of resources to achieve these objectives? Again, if there is another and better way of doing it then the spending is “wasted”.
Then there are the other cities where GPs are held or not held. For advertising value to be a useful measure you would need to know whether Melbourne gets more or less than all other GP hosts and whether GP cities as a result – as a result of the exposure – attract more visitors and investors as a result of that exposure than do comparable cities which don’t host GPs.
So, when the NIER report comes out have a close look at the “value” ascribed to advertising exposure and think – would the PR industry have considered this acceptable? – even before you start to analyse the econometric assumptions.
CRIKEY: A monster Miscellany column is on the site here – http://www.crikey.com.au/articles/2005/03/007-0001-5205.html
Grand Prix media lies
What a load of rubbish in The Financial Review at the weekend about the Grand Prix – Ron Walker talking about an average of an 8 per cent increase every year in corporate sector and general admission.
Where are the figures to support this? How do the media let these things go unquestioned? On the basis of an 8 per cent increase every year revenues would more than double in 10 years. Have they?