Why do you need to measure the ROI of communication?


Whenever you need to calculate the financial success or failure of an action, ROI is involved. Also known as Return On Investment, this metric indicates hard data about results.

For communication, this involves measuring how much the campaigns, projects, and activities are actually contributing to the growth of the company as a whole.

In addition, it also helps to identify which practices should be revised to reach (or exceed) the delimited expectations, among other benefits. That’s why it is so important to measure the ROI of your communication actions.

Why it is necessary to measure communication results

Understanding the impact of actions, whatever they may be, is fundamental to any company. This understanding is made clear in the famous quote from the father of modern management, Peter Drucker: “If you can’t measure it, you can’t improve it”. 

Although this statement is not new or surprising, a Cision survey of communication professionals in seven countries in 2020 showed that the second biggest challenge for them is precisely measuring results in the area of communication, being cited by 25% of respondents.

In first place was the difficulty of reducing expenses, a task mentioned by 28% of respondents. This is also related to ROI, since this metric consists in calculating the revenue subtracted from the cost and divided again by the cost.

The result is the identification of campaigns that can be revamped or shut down to fit the available resources. 

In addition, unlike vanity metrics – which are numbers that are worth more to the ego and to fill the eyes than to actually help in strategy planning – ROI presents real numbers of the cost and benefit ratio, in a tangible and realistic way.

4 reasons why you should calculate ROI

Good financial figures represent more than the cash return of a campaign, but they also indicate that the action is achieving the expected success. The opposite is also valid. After all, if the goal of the action is to generate profit and this does not occur, it can mean the end of that activity. 

Therefore, Return On Investment (ROI) is one of the tools that demonstrates the impact of communication actions, building or reinforcing a culture of intelligent, data-driven decision making.

It can also be seen as a metric that defines the continuity, priority, or discontinuity of projects, which, without this information, may have their importance questioned.  

ROI can be used to improve internal and external actions. Check out some of the benefits of employing this calculation: 

1. identify challenges and opportunities

Well, if an action, project, or event does not meet the predefined objectives, it will hardly deliver the expected financial results. This means that if the ROI is bad, there is a problem that needs to be solved, regardless of whether it is a specific communication activity, employee performance, or even customer satisfaction.

Just like the challenges, Return on Investment also points out opportunities for the communication area. Based on positive results, it identifies which activities are generating profit and should receive attention from the company.

2. Anticipating crisis

The best way to handle a crisis is to have as much information about the situation as possible.

Considering that not all challenges will become crises, ROI is able to point out which action has the potential to give communication a major headache.

Moreover, even if understanding a scenario and having data is not always enough to avoid a crisis, knowing what is coming is certainly essential to survive turbulence.

3. Prove the relevance of the communication

Validating the importance of communication (including marketing and public relations) still remains one of the biggest stumbling blocks for the industry.

In this respect, Cision’s survey found that 52% of communications professionals believe that the industry has little success in measuring and proving the impact of communications on a company’s bottom line.

Those who said that companies achieve this goal “not very well” and “not at all” make up 34%, while only 13.1% consider this measurement satisfactory.

Taking these rates into consideration, it is clear that ROI is a way to demonstrate that communication also brings profit and deserves investments. Besides, of course, strengthening the brand’s relationship with the consumer and disseminating the company’s authority in the market.

4. Promote staff satisfaction 

Today, many times when we talk about “communication”, we are inclined to think about technology, since one deeply impacts the other, becoming inseparable friends. However, what we can never forget is that there are people behind the actions, who are guided by satisfaction, expectation, and will. 

But according to a Deloitte survey, the scenario is completely different. Thus, 74% of leaders and workers believe that the development of employee skills and capabilities is important for business strategy.

In turn, only 34% are satisfied with the organization’s investment in them. Moreover, almost half of all workers surveyed are willing to leave the company if given the opportunity. 

In this scenario, ROI can be used to develop a more balanced work environment aligned with the needs of the professionals, which is achieved by cross-referencing information such as employee satisfaction, productivity, and talent retention.

To find out these figures, companies must attribute how much they invest in employees and the return it generates to the brand, in the form of profit. 

As you have seen, ROI is a calculation that indicates the cost-benefit of an action, assigning an amount of money for each activity of the communication sector. In this way, it becomes feasible, for example, to control the projects that generate the most profit, to predict crises, to prove the importance of investing in the sector, and to improve the work environment. 

To find more information about communication and marketing strategies and the most suitable monitoring solution for your business, contact Knewin. We can leverage your brand’s results with our solutions.