The opinions expressed by Entrepreneur contributors are their own.
As companies vie for attention in a crowded marketplace, a well-executed public relations (PR) strategy can be key to building brand awareness, increasing credibility and fostering positive relationships with stakeholders. The age-old question, “How much should a company spend on PR?” echoes in boardrooms, with organizations searching for a magic formula for budget allocation.
However, determining the optimal budget for PR activities remains a complex decision, influenced by various factors. In this article, we delve into the considerations companies should weigh when allocating PR resources, supported by tips for protecting the budget and steps to ensure spending is strategic and effective.
Related: Mastering Public Relations: A Complete Guide to Boosting Your Brand’s Reputation
PR budget planning considerations
1. Holistic approach
Budgeting requires a holistic approach, including content, search engine optimization (SEO), social media and influencer marketing. A survey conducted by Gartner said that 82% of chief marketing officers (CMOs) have reprioritized investments in digital channels in 2023, demonstrating that recent changes in the PR landscape highlight the importance of adapting to new trends .
2. Alignment with company objectives
Your PR budget should align with your overall business goals and objectives. For example, a company aiming to launch a new product or enter a new market may need a more substantial public relations investment than a company focused on maintaining its current market position.
3. Industry standards and benchmarks
For effective public relations budget planning, companies need to be aware of industry standards, with spending typically ranging between 7% and 12% of revenue. However, recent trends indicate a slight reduction in marketing budgets in most industries. Gartner’s 2023 CMO survey reveals a decline in marketing budgets from 11% of company revenue in 2020 to 9.1% in 2023, reflecting the changing landscape as brands seek cost-saving measures. In particular, self-service models, marketplaces and technology-based services are gaining prominence in this evolving landscape.
Related: How employee advocacy can help you overcome the challenges of limited public relations budgets
4. Content marketing beyond ROI
When considering content investments, it becomes critical to understand its direct impact on business revenue. According to a survey conducted by Search Engine Journal, 49% of marketers said that search engines like Google are the digital marketing channel that offers the highest return on investment (ROI).
Additionally, content marketing ROI goes beyond just numbers, incorporating both quantitative and qualitative results. Lead generation, customer loyalty and brand awareness should be factored into the calculation, offering a comprehensive perspective on the effectiveness of content efforts.
Understand the components of the PR budget
1. Have a multi-channel presence
Ensuring a comprehensive multi-channel presence is critical to expanding reach and audience engagement. PR specialists, along with the marketing team, share the responsibility of staying tuned to dynamic social media platforms that drive engagement and build credibility. An Adobe study highlights the effectiveness of a strong omnichannel strategy, revealing significant 10% year-over-year (YoY) growth for businesses compared to 2.8% growth with a less integrated approach.
Looking ahead to 2024, Twitter and LinkedIn remain essential platforms for public relations professionals, widely used by media professionals looking for pitches or sources. At the same time, maintaining an active blog on your website helps improve SEO and establishes your brand as a thought leader in the industry. Now more than just a trend, podcasts position companies as authoritative voices in their industries. The convenience of consuming podcasts on the go improves accessibility, and the versatile format allows you to mine key segments, extending impact across various channels like Instagram Reels and TikTok, amplifying reach and resonance.
2. Embrace influencer marketing
With a changing media landscape characterized by a decline in traditional journalism and a surge in influencers, integrating influencer strategies into your brand approach is critical to achieving successful PR results. Influencers bring authenticity to brand endorsements, as their followers often perceive them as trustworthy individuals.
Partnering with influencers ensures adaptability to emerging trends and aligns with budget-conscious goals. A survey conducted by Influencer Marketing Hub reveals noteworthy ROI, with businesses earning an average of $5.20 for every dollar invested in influencer marketing.
Related: 10 influencer marketing trends to watch
3. Create strategic partnerships
Building meaningful partnerships is set to become a top priority in 2024. Directing resources towards this goal allows PR campaigns to significantly broaden reach and engagement. The costs involved cover a range of expenses, including networking events, booths, invitations, PR packages, meetings, collaborative projects, travel expenses and more.
4. Harness the power of artificial intelligence
As more and more PR tools integrate artificial intelligence (AI) features, it is mandatory to adopt them to enhance your daily workflow. Whether it’s streamlining the process of refining presentation strategies or analyzing complex data to gain insights into PR campaign performance, integrating AI can increase the engagement and effectiveness of any PR campaign. A 2023 study by PRovoke Media shows that 86% of communications professionals across the world between the ages of 35 and 44 believe that artificial intelligence has a positive impact on their work.
5. Leverage ESG and CSR initiatives
Companies that effectively communicate their environmental, social and governance (ESG) and corporate social responsibility (CSR) initiatives often experience an improvement in their reputation.
Examples of initiatives:
- Sustainable practices: reduce carbon emissions and minimize waste.
- Promote diverse and inclusive workplaces.
- Community Engagement and Social Responsibility: Engaging with communities through volunteering and responding to community needs by supporting education, healthcare, or other social causes.
Furthermore, companies focused on ESG and CSR criteria are increasingly attractive to investors. According to a McKinsey report, sustainable investing is growing 2.5 times faster than traditional investing, indicating a shift in investor preferences towards ESG-conscious companies.
Related: ESG for entrepreneurs: a path to business success
6. Apply media monitoring and social listening
Expand your focus beyond press releases by investing in PR analytics tools for comprehensive campaign monitoring. Metrics like media mentions, social media engagement and sentiment analysis offer valuable insights into the effectiveness of your PR efforts.
Robust monitoring tools are key to evaluating campaign performance and providing a proactive shield against potential crises. In today’s digital age, where news and information spread quickly, a delayed reaction can make a crisis significantly worse. Effective monitoring tools enable organizations to address issues early, develop a crisis communications plan, take control of the narrative, and minimize potential reputational damage.
Conclusion
In the past, measuring the impact of PR has been a challenging task, but with recent technological advances the process has become more manageable. Starting this process early can simplify measurement and help companies position themselves for more meaningful budget allocations.
When companies allocate resources effectively, adapt to emerging trends, and practice responsible communication, they increase the visibility of their brand and make a significant contribution to the ever-evolving narrative of corporate communications. The journey to effective PR spend is as important as the destination, representing a commitment to communications excellence in an ever-changing environment.