Advertising value equivalency: Do AVEs ad value to your PR measuring?
What's the best metric for measuring the effectiveness of PR? If you're from the AVE - advertising value equivalency - school of thought... seriously, it's time to catch up. Yes, measuring with AVEs is easy, but you're not getting valid results or insights into the impact of your campaigns. Let me explain...
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Advertising Value Equivalency, AVEs, or Ad Values. Whatever you call them, Tom Watson traced their origin back to the 1940s.
They soon became the go-to measurement for the PR industry. The problem is, in nearly a century, AVEs haven’t adapted to today’s online society.
There are newer and better ways to prove the value of your PR strategy.
But that doesn’t stop over a third of UK PR firms who still using AVEs for measurement. What’s going on?
Hold the front page. AVEs don’t work. - Photo by Roman Kraft
Before we go any deeper, we need to look at what AVEs actually are.
What is Advertising Value Equivalency?
How to Calculate AVEs
Advertising Value Equivalency was created to give PR a measurable context in people’s marketing communications, originally comparing them against brand advertising.
Advertising expense was easy to measure, based on the size of your ad and the reach of the medium it was placed in.
To aid comparison, the AVE solution was to treat a PR piece as if it was advertising content. On a basic level, that meant looking at the scale of the coverage and multiplying it by the advertising rate. That way, you'd know the dollar value of your PR piece.
The AVE Formula
But, it’s not quite so straightforward. The AVE formula should look like this:
AVE = SIZE X RATE
So if you had an article 10 column inches long, in a paper whose rate is $15 per column inch, you’d calculate your formula as:
AVE = 10 X 15 = $150 AVE
However, many people will incorporate an extra number into the formula. This is to support the claim that PR communications are more valuable than advertising.
Although that’s widely accepted, we don’t accurately know how much more effective, so the variable can vary widely, with examples from 3 all the way up to 12, and everything in-between. Looking at the 2 extremes, you could get two very different examples:
AVE = 10 X 15 X 3 = $450 AVE
AVE = 10 X 15 X 12 = $1800 AVE
Either could be correct, but with no evidence to support the accuracy of the added variable, you have no idea which it is.
Oh, and to confuse the matter further, some people will alter the variable further to incorporate the source’s credibility too. Another metric that’s hypothetical, and therefore unreliable.
Do They Work?
No. It’s easy to see the flaw here. Much like Earned media value (EMV) AVEs try to follow a very simplistic formulaic method, and yet incorporate non-formulaic variables in them. The results rely on too many unsupported numbers.
There are also some important factors they don’t consider.
Even though it’s one of the more reliable elements of the formula, there’re still some things you should consider about the rate.
Most importantly is where did your rate come from? Most mediums will often offer a discount on their advertising rate card for loyal or big-spending clients. But, if you have a discounted advertising rate, yet still use the standard rate card rate for your PR, you will see a bias towards the effectiveness of your PR stories.
There are also some rates that don’t exist. There often isn’t the opportunity to take a full page advertisement on the front page of a newspaper, or within a TV or radio news bulletin. Yet, you could have a PR story within this space. The Advertising Value Equivalency calculation for this will probably incorporate either an inflated rate or an extra variable to represent this, making it difficult to compare it against your advertising costs.
Would you include a competitor’s name in an advertisement, except for comparison? No. Yet, in a news story that could happen, with an article focused more on your competition, than yourself.
And the AVE formula just ignores it.
You could end up with you and your competitor calculating the same AVE from the same article even if it focuses significantly on one brand over the other. What’s the point in that?
All news is good news. That’s the old adage. And though there are plenty of PR Disaster examples that prove it isn’t true, AVEs still think it is.
Not everything is good news. - Photo by Mark Adriane
They don’t take into account the sentiment of an article. Whether it’s a great product review, a company slating, or even a neutral commentary, you won’t be able to measure that with the Advertising Value Equivalency formula.
Unless you add another variable. That’s right. Another unsupported number.
What the PR Industry Thinks of Advertising Value Equivalency
“Advertising Value Equivalent (AVE) is a lousy form of public relations measurement. Practitioners use it because it’s easy. But it’s also wrong.”
Stephen Waddington, (@wadds) Chief Engagement Officer, Ketchum
Looking at the credibility of AVEs, it’s not surprising that they are criticized frequently in the PR industry. And yet, they’re still a commonly used metric. As John Noble points out in Chartered Public Relations: Lessons from Expert Practitioners, “the extent to which (AVEs are) criticized by commentators and researchers... is only matched by the extent that the concept is used in practice.” That’s pretty ridiculous.
The metrics you should be measuring instead
What Should we do About AVEs?
That’s simple. Stop using them. Yes, they may be quick; your client may love them; they may be what you’ve always used. But none of those reasons make them right.
Instead, you should be looking at every PR campaign individually, and actually, use reliable metrics to analyze your results. It may take longer, but there are plenty of PR tools on the market to help you gather more detailed analysis.
“Return on investment should link the investment in public relations activity to the outcomes that it generates. The objectives of a public relations campaign should be tied as closely as possible to organisational objectives. Defining a measurement framework for a campaign is hard. Just as no two organisations are the same, no two objectives can be the same, and no measurement frameworks for a campaign will be the same.”
Stephen Waddington, (@wadds) Chief Engagement Officer, Ketchum
Before you look at measuring your campaign results, define what outcome you wanted from it. Then, measure the PR impact.
The PR impact is not based on how much your audience has seen or heard your PR. It’s about how much effect it had on them. It doesn’t rely on variables, but actual, real, tangible figures gathered from social media analytics, like...
You can measure the change in traffic on your website. Look for extra engagement, especially from new traffic, and visitor recency. If your PR has worked, you should see an increase in new visitors, and return traffic from people who haven’t visited for a while.
Don’t forget to measure your social media traffic too. Look for active engagement, where people are sharing your posts or commenting on them. These people will have taken your message onboard and are helping it diffuse further.
The ‘Black Panther’ Facebook page received a peak in comments and likes following the trailer release.
A Virality Map can assess how successful your communications were, by looking at where they diffused and through which networks they were shared.
Tracking all 257,000 engagements of the ‘Black Panther’ trailer from launch.
You can measure the emotional impact a campaign has had on your audience, with sentiment analysis. This will give you a better idea of whether the PR piece was seen as having a positive or negative impact on your brand.
The ‘Black Panther’ trailer had over 30% positive impact on Facebook.
With more in-depth analysis, you can gauge more precise demographics of who is engaging with your PR. Therefore, you can measure which markets your campaign is having more impact on.
The ‘Black Panther’ trailer had more impact on ‘Males’ and the ‘25-34’ category.
So there we have it. Advertising Value Equivalency doesn’t work. It may have been relevant at some stage, but when there are so many other metrics available today, it’s time for AVEs to go.
And the end could be nigh, with the Chartered Institute of Public Relations announcing plans for a ban on their use by CIPR members. It’s about time.
Talkwalker is also proud to support AMEC's campaign to eradicate fully the use of AVE and all of its derivatives as metrics in public relations work. To support their campaign, click the banner below.
To discover the metrics you should be monitoring to help improve your scores (whether AVE, EMV or even Net Promoter Score), check out our latest eBook. With input from global PR & marketing experts, download our metrics that matter eBook.