PR and Value Creation: Proof from the Sharp End?

A new study by a leading business school points to concrete proof of the direct correlation between editorial output and the hard-edged outcome of shifts in share price. 

As the quest for more robust PR measurement and proof that specific items of earned media can equal direct commercial gain rolls on, it makes compelling reading.

Of course the links between publicity generated, or inspired, by public relations activity have always been, in the more acute of cases, pretty obvious. But the new research, covered by the Financial Times, uncovers absolute links between discrete editorial mentions in regular media and the rise or fall of share prices. And it points to an amplification in value driven by higher volumes of publicity.

Have we cracked the Holy Grail of PR measurement then? Is this the key to an X=Y formula for PR investment versus commercial value created? 

No. But it's the most conclusive proof yet that editorial has, or can have, a direct impact on share value, so an important step forward given this is surely at or near the sharpest end of the prospective PR value chain.

Researchers from the UK's Warwick Business School looked at the commercial impact of the growing use of data - specifically, they examined the myriad of trails people leave online across social media and search, and any corresponding impact on the stock market.

As part of that, they examined 1,821 Financial Times issues and 31 major stocks for which mentions in the newspaper impacted share price performance the following day. The tie between mention and stock motion was invariably strong.

The pointed impact of online search and social content was assessed too; but this association between regular media output and share value, where no direct data trail was otherwise detectable, was perhaps the most revealing and assertive finding. The media may want to report on the story rather than be part of it, but it is often unavoidably in the thick of it.

So no Holy Grail, and the science of PR measurement will not be 'solved' by one trait anyway.

Rather, a large measurement jigsaw, stitched together by data, investigation and doubtless by raw instinct, is steadily taking shape. This may be an important piece.