We introduce our sixth guest blogger of our monthly series on the 25th of every month, in celebration of our 25th anniversary this year, Paul Holmes, the highly regarded PR industry analyst.

Paul Holmes is editor and publisher of The Holmes Report, which provides knowledge and insight to public relations professionals, and manages the SABRE Awards, recognizing Superior Achievement in Branding & Reputation.

I just returned from Barcelona, where more than 200 PR practitioners and evaluation experts gathered to pass the “Barcelona declaration” of research principles, an attempt to set global standards for the measurement of PR.

The principles are much needed. My publication runs the SABRE Awards competition in North America, EMEA and Asia, and so I see something like 3,000 PR campaign summaries a year, and measurement is far from standardized. I see everything from clip counts to advertising value equivalency (roundly condemned by the Barcelona delegates), while relatively few seek to link PR to business results.

I have long believed that public relations is about what the words say it is about: building, maintaining and leveraging relationships between an organization and its publics. As a result, I believe the best measure of success is the impact a campaign has on relationships.

The past few years have seen the emergence of new evidence suggesting a strong correlation between an organization’s relationships and business performance. Specifically, Bain & Company’s Fred Reichheld has looked at the connection between advocacy (the likelihood that someone will recommend a company to a friend or colleague) and performance, and found that advocacy (or what he calls net promoter score: the number of advocates minus the number of detractors) is a strong predictor of future success.

This ought to be great news for the profession, because I believe PR is uniquely positioned to create brand advocates. It is hard for me to imagine an ad campaign that would make me more likely to recommend a product to others, but there are plenty of PR campaigns that have done this: communicating a commitment to CSR, linking products with causes, special events that touch people directly. (It’s also easy to imagine PR failures that create brand detractors: BP being the most obvious recent example.)

There are two obstacles to progress on evaluation, however: agencies and clients: agencies, because they all want a proprietary measurement tool that differentiates them from competitors, at a time when we badly need an industry standard; clients, because they remain fixated on traditional reach and frequency measures at a time when social media are demonstrating that engagement and advocacy are what really matters.

As an industry, we need to develop a standard and sell it to clients if we are going to take advantage of the opportunity for leadership offered by this new social media age.

The next video by The Pollack PR Marketing Group as part of our monthly 25th anniversary celebration:

Today, the agency introduces a new channel on the corporate blog called “Digital Trenches,” which will feature tactical suggestions and guidance on trending digital communications and marketing topics including search optimization, social media, mobile marketing, online media and the blogosphere.

Consumers are in the driver’s seat now. They expect companies to take care of their problems and to do so on their own terms. Consumers will not tolerate anything less than service in real time, without phones and web forms, and without hassle. Like the phones and websites of the days of yore, social media is currently the consumer-demanded touch point of today.

So why is ROI in the mix? Do you measure ROI on phones and websites? Sales firms will use phone call metrics to determine employee efficiency. Widget manufacturers will track traffic and determine the ratio of conversions. These metrics would be around things like productivity, efficiency, and sales. But are they measuring the ROI of these channels of communication?

The purpose of ROI is so that decision-makers can justify an investment because that investment is directly connected to a monetary return. So as companies brave the social media landscape they enter it with ROI glasses on and wonder how they can justify the time and cost to enter this channel in the first place.

I believe that this approach is way off. Time and resources put into social media is not an investment. It’s an expense. Like a website. Or a phone. Using social media is not a competitive option that will yield dollars to one’s bottom line, it is a cost of doing business.

Therefore, you should monitor and develop metrics that make the expense as inexpensive as possible: develop efficiencies, improve productivity, escalate reach, increase conversions, etc. None of these things have a direct monetary value and neither does your phone or website. They are business tools to fulfill a consumer demand of adequate channels of communication.

So a “return” on social media has more to do with operational considerations: website traffic, the size of one’s presence and influence, the number of impressions one creates to reach the largest number of eyes, changes in sentiment, and resolution of customer issues. Even taking on new prospects and converting them to customers or selling a widget is a function of operational costs, not investments.

The context around social media’s ROI needs to change. We can no longer afford to sit back and decide whether or not social media is “worth it” based upon the amount of time spent, but instead focus on how to make social media efficient, productive and essential for company’s operations given that it is now a necessary channel of communication.

In recessionary times, companies are re-evaluating proposals for marketing campaigns from every angle to make sure they are cost effective.  Clients almost want a “guarantee” of ROI on every tactic before they venture out and “gray” no longer counts. Apparently, building awareness of a new product (as an example) or generating visibility for a company’s CSR (corporate social responsibility), often a prime goals of PR campaigns, now fall into the gray area according to clients and unless they can be tied into tangible results or are translatable into profits, they are put on the back burner.

One would assume that that sort of thinking would put traditional large-scaled promotional events at bay or, minimally, on a shelf to be dusted off in better economic times.  But not so with companies that understand their value and, as such, are bucking the trend.

Verizon’s two 99-cent campaigns launched in New York City this month, are an example of how imagination, big picture thinking and partnerships can meld together into successful campaigns. Apparently the original goal was to tout a Verizon business segment that has low consumer awareness: prepaid cellular plans. And yes, of course, the pre-paid plan’s daily usage fee is 99 cents.

As to the campaigns, they were planned for the season.  Just in time for the official start of summer, Verizon teamed up with Mr. Softee Ice Cream to sell ice cream from four Verizon Wireless-wrapped trucks at high-traffic locations in Manhattan, the Bronx, Brooklyn and Queens during the lunch hour.  Branded napkins and additional prepaid details came with the ice cream.

Earlier in the month, Verizon had teamed up with a New York City Cab Company for one day only, sponsoring 99-cent cab rides that started from select locations (with Verizon-branded taxis) for destinations anywhere in Manhattan.  When you consider that a typical cab ride in New York City can cost between $10 and $20 — or more — depending on traffic and destination – that’s quite an eye-popping deal.

Still, what’s troubling here is that, according to a report in Adweek, Verizon’s original goal of building consumer awareness for its pre-paid plan got muddled.  Apparently, the success of the promotions, were also tied to immediate sales.

Counting on increasing consumer awareness through such an imaginative campaign is absolutely realistic.  Counting on immediate sign ups for the plan by virtue of having eaten an ice cream or riding around in an almost free cab is not, even with the support of a large NY ad campaign.

I think that “gray” (in this case, consumer awareness) does move the needle and that ROI needs to be built into any program — but counted on, a bit down the road.

Yes, it’s my first blog with many more musings and thoughts to come…

But for my first, I want to address the schism that exists worldwide, right now.  On one hand there has never been such a surge of world optimism and renewed hope in making the impossible, possible — ever.  An example was Bob Herbert’s Sunday column in the NY Times two weeks ago, which carried the headline “Americans, take a bow!”  And yes, we proudly can.  We have shattered a ceiling, if not all ceilings.

But on the other hand we have been sucked in by a world pessimism surrounding our financial systems that, if left unchecked – will sink us deeper and paralyze hope.

Pessimism begets pessimism.  It’s a black hole that can suck the air out of everything that is possible. I venture to say that we have a choice.

This situation can be compared to the vase in Somerset Maugham’s ravishing classic, The Razor’s Edge.  A plastic vase never breaks in a fall, but will never have the beauty of a crystal vase that will.  A great example of “on one hand or the other.”   We can select one over the other, as long as we are willing to take the “risk” or consequences.

It’s the inventive and creative mind that can find a way to keep the dark hole at bay.  And no one will argue that some of the most creative minds exist in the PR world.  What is needed now is to unleash that creativity and take risks – no, not financial ones, but risks with ideas that may not have a safety net as to immediate ROI.

This then is the time for corporations to tap that creativity.  It is the partnership between corporations/organizations and a PR agency or an in house team’s creative mind, that will count – a partnership where corporations/organizations say, “why not, let’s try it,” rather than “we cannot take that chance.”  It is a matter of trust in those creative ideas. As an example, just consider that if you have all the ingredients to make a lavish dinner, it’s easy to make a scrumptious one.  But if you have only a piece of bread, some pasta and lots of spices, what concoction can one create that can rival the scrumptious meal?

So, I suggest — let’s just do it.  Let’s go back to when ‘excess’ was not around and when creativity was seen as the essential ingredient needed to stretch real small PR budgets. Let’s not just shrug shoulders and say, “we’re doing what we can but are restricted by budget.” Rather, let’s consider the creative moves that can engage audiences in catapulting a brand and figure out how to move the needle, with very little thread.