How PR agencies can assess cost per campaign against media ROI

Key takeaways

• Track every cost, not just salaries. A proper PR agency project cost analysis includes team time, software, media spend, and overheads to see the true cost of delivering a campaign.
• Compare cost to value, not just revenue. Measure your campaign costs against the earned media value (EMV) or other client-agreed metrics to understand real return, not just the fee you charged.
• Use job costing to price future work. Detailed project profitability tracking from past campaigns gives you the data to price new work accurately and protect your margins.
• Monitor margins in real-time. Set up simple dashboards for margin monitoring so you can spot if a project is going off-track financially while there's still time to fix it.

What is PR agency project cost analysis?

PR agency project cost analysis is the process of adding up every single expense tied to a client campaign and comparing it to the value or revenue that campaign generates. It means moving beyond just looking at your fee income to understanding if a project was actually profitable after all costs are counted.

For a PR agency, these costs are often hidden. They include the hours your team spends pitching, writing, and liaising with journalists. They include the cost of media databases, press release distribution services, and any paid amplification. They even include a share of your office rent and software subscriptions.

Without this analysis, you're flying blind. You might celebrate a £20,000 project win, only to discover it cost you £22,000 to deliver. The goal is to know exactly what each campaign costs so you can price future work correctly, manage resources wisely, and focus on your most profitable clients.

Why do most PR agencies get project costing wrong?

Most PR agencies struggle with project costing because their main cost—people's time—isn't tracked accurately. They often use flat fees or retainers based on rough guesses, not on data from past similar work. This leads to underpricing and eroded profit margins.

A common mistake is only counting direct, out-of-pocket expenses like a paid article or a press trip. The bigger cost is always your team's labour. If you don't track how many hours go into securing coverage, managing a crisis, or running an event, you can't know your true cost.

Another error is forgetting overheads. Your project uses your agency's resources: your CRM, your media monitoring tool, your account director's salary. A portion of these costs should be allocated to each project to see its full financial impact. Specialist accountants for PR agencies often find this is the missing piece in an agency's financial picture.

Finally, many agencies don't connect cost to outcome. They know what they spent, but they don't rigorously compare it to the media ROI (return on investment) or earned media value delivered. This means you can't prove your value to clients or learn which types of campaigns are most efficient for your agency.

How do you track all costs for a PR campaign?

Start by categorising every possible cost into three buckets: direct labour, direct expenses, and allocated overheads. Direct labour is your team's time spent specifically on the campaign. Direct expenses are things like paid media, event costs, or influencer fees. Allocated overheads are a fair share of your rent, software, and management time.

To track team time, you need a simple time-tracking system. This doesn't have to be micromanagement. It can be as simple as a weekly sheet where staff log hours against client projects. The goal is to understand how many hours a typical media pitch, report, or event takes.

For expenses, use a project code in your accounting software. Every invoice, subscription, or credit card charge related to the campaign gets tagged with this code. This builds a clear picture of your out-of-pocket spend.

Allocating overheads is trickier but important. A standard method is to calculate your total overhead cost per month and divide it by the total number of billable hours your team works. This gives you an overhead cost per hour. You then add this cost to the hours spent on the project. This shows you the full cost of delivering the work.

What should you measure against campaign costs?

You should measure your campaign costs against the media ROI or value delivered to the client. This is more than just the fee you invoiced. It's about understanding the efficiency and effectiveness of your work.

The most straightforward comparison is fee versus cost. Did the £15,000 retainer cover the £12,000 it cost to deliver? This gives you your gross profit margin on the project. But for PR, the deeper analysis links cost to results.

Many agencies use Earned Media Value (EMV). This is an estimate of what the coverage you secured would have cost if it were paid advertising. If your campaign cost £10,000 and generated £100,000 in EMV, that's a strong indicator of value. However, EMV has critics, so it should be one metric among several.

Other metrics to weigh against cost include quality of coverage (tier of publication), share of voice versus competitors, key message pull-through, or leads generated for the client. The key is agreeing on the success metrics with the client at the start and then tracking the cost to achieve them. This turns your PR agency project cost analysis from an internal accounting exercise into a tool for client communication.

How can job costing templates improve profitability?

Job costing templates are pre-built spreadsheets or software forms that force you to capture all costs for a project in one place. They stop costs from slipping through the cracks and give you a consistent framework for project profitability tracking across all clients.

A good template has sections for estimated hours per role (account manager, creative, strategist), estimated expenses, and a place to track actuals as the project runs. This allows for real-time comparison. You can see in week two if you're already 50% over your estimated time budget.

Using templates creates a historical database. After five events, you'll know your average cost for staffing and managing a launch event. After ten product review campaigns, you'll know how many hours it typically takes to secure a certain number of pieces of coverage. This data is gold for pricing.

It also makes margin monitoring proactive, not reactive. Instead of finding out a project was unprofitable after it's finished, you can see the margin shrinking during delivery. This lets you have a timely conversation with the client about scope or adjust your resourcing plan. To understand where your agency stands financially right now, take the Agency Profit Score — a free 5-minute assessment that reveals your financial health across profit visibility, revenue pipeline, cash flow, and operations.

What are the key metrics for margin monitoring?

The key metrics for margin monitoring are gross profit margin per project, utilisation rate, and cost overrun percentage. Gross profit margin is your fee minus all direct costs (labour and expenses). Aim for 50-60% on average for a healthy PR agency.

Utilisation rate is the percentage of your team's paid time that is spent on billable client work. If your team is only 60% utilised, 40% of their salary cost is being absorbed by non-billable time or overhead. This makes each project more expensive to deliver. Industry benchmarks suggest 70-80% is a good target for account handling teams.

Cost overrun percentage shows you how much you've overspent against your original budget. If you estimated 100 hours and used 150, that's a 50% overrun. Tracking this by project type reveals your estimating blind spots. Are you consistently underestimating crisis communications work? Your PR agency project cost analysis will show you.

Dashboard these numbers weekly or monthly. A simple report showing project name, estimated margin, current margin, and hours used versus budgeted is enough. This ongoing margin monitoring is what allows you to steer the ship, not just look at where you've been.

How do you turn cost analysis into better pricing?

You use the historical data from your cost analyses to build accurate, defensible pricing models. Instead of guessing what to charge for a new media relations campaign, you look at what the last five similar campaigns actually cost and add your target profit margin.

This moves you away from charging purely on perceived value or what the market will bear, and towards cost-informed value pricing. You know your minimum viable fee to hit your profit goals. Any price above that is a bonus that reflects the extra strategic value you provide.

This data also helps you structure retainers profitably. Many PR agency retainers are loss-making because they are based on a fixed monthly fee for an undefined amount of work. By analysing the true cost of services delivered under past retainers, you can define clearer scope packages. For example, a £5,000 monthly retainer might include up to 40 hours of team time and £500 in monitoring tools. Beyond that, additional fees apply.

This approach protects your margins and sets clear client expectations. It turns your finance function from a cost centre into a commercial engine. For more on commercial strategy, our agency insights cover pricing in depth.

What tools can automate project cost analysis?

Several tools can automate the heavy lifting of project cost analysis. The foundation is a combination of time-tracking software, project management tools, and accounting software that can talk to each other.

Time-tracking tools like Harvest, Clockify, or Toggl allow team members to log hours to specific clients and projects. These tools often integrate directly with project management platforms like Asana or Trello, making it a seamless part of the workflow.

Your accounting software (like Xero or QuickBooks) is where you track all expenses. By using categories or tags for each client project, you can pull a report showing all spend for Campaign X. Some advanced job costing software like Kimble or FinancialForce is built for professional services, but can be overkill for smaller agencies.

The most important step is ensuring these tools integrate. You want your time data and your expense data to flow into a single dashboard or report. This gives you a real-time view of project profitability without manual spreadsheet work. If you'd like to benchmark your agency's financial setup and readiness for automation, check your Agency Profit Score — it takes just five minutes and covers everything from cash flow to AI readiness.

How often should you review project costs?

You should review project costs at three key stages: at the pitch/planning stage, during delivery (weekly or bi-weekly), and after completion. The post-campaign review is the most important for long-term learning and should happen within a month of project wrap-up.

During the pitch, you're estimating costs to set the price. During delivery, you're monitoring for overruns. The post-campaign review is where you conduct the full PR agency project cost analysis. You compare all actual costs (final time sheets, all expenses) to the final fee and to the results achieved.

This review should answer specific questions. Did we hit our target margin? Where did we underestimate costs? What activity delivered the best ROI for the client? Which team members were most efficient? The answers should be documented and used to update your pricing templates and processes for next time.

Making this a non-negotiable part of your project closure process builds a culture of commercial awareness. It turns every campaign into a learning opportunity that makes your agency more profitable and efficient. If this feels daunting, starting with a quarterly review of your three largest projects is a good first step.

Mastering PR agency project cost analysis is what separates commercially savvy agencies from those that just work hard. It's the system that ensures your creativity and effort are rewarded with sustainable profit. By knowing your numbers, you can make confident decisions, price with authority, and invest in the clients and services that truly drive your growth.

Getting this right is a significant competitive advantage. If you want specialist support from accountants who understand the unique economics of PR, media, and communications firms, start with your Agency Profit Score to see where your agency needs the most attention, then get in touch to discuss next steps.