Some years ago, Advertising Value Equivalency (AVE) was a hot topic in PR industry discussion. The discussion focused on an increasingly widely-held view that AVE is a discredited measurement metric for public relations.
AVE refers to the practice of estimating the value of PR efforts by calculating the cost of an equivalent amount of advertising space or time in the same media outlet and comparing the two.
Unfortunately, AVE refuses to go away entirely as some in the industry still advocate for its use. Recently I came across an explainer from Meltwater that includes a formula for calculating AVE using Meltwater’s widget. The explainer includes the caveat, “While this is a very popular widget among our clients, it is important to note that this is our best estimate and it does not measure an exact value.”
You might as well take the random number AVE calculator for a spin and get some entertainment at the same time!
If you do need a reminder of why AVE is an invalid practice, here are five:
- Inaccurate comparison: AVE compares PR to advertising, which is fundamentally different. Advertising is a paid-for, controlled message, while PR is earned media, based on third-party endorsement and credibility. This makes it difficult to make a fair comparison between the two, as their impact on the audience can be vastly different.
- Underestimation of value: AVE undervalues PR by wrongly equating it to the cost of advertising and not taking into account the added value of PR’s credibility, cost-effectiveness, organic reach, longevity, and SEO benefits. Additionally, AVE doesn’t account for the quality or sentiment of PR coverage, which can significantly affect its impact on the audience.
- Lack of standardisation: AVE calculations are not standardised, leading to inconsistencies in determining the value. Different organisations might use different multipliers or methodologies, creating confusion and making it difficult to compare results across various PR campaigns or agencies.
- No measurement of outcomes: AVE only focuses on the supposed monetary value of media coverage and does not provide insight into a PR campaign’s actual results or effectiveness. Metrics like audience engagement, message resonance, and behaviour change are more meaningful indicators of PR success, but AVE doesn’t account for them.
- Disregard for online and social media: AVE was developed in an era when traditional media dominated the landscape. Today, online and social media play a significant role in shaping public opinion, but AVE doesn’t accurately capture their impact. This makes it an outdated and incomplete measurement for modern PR efforts.
Today, most practitioners focus on more meaningful and comprehensive evaluation methods, such as explained in the Barcelona Principles which advocate for outcome-based measurement, qualitative analysis, and a holistic understanding of PR impact. Barcelona Principles 3.0 were published in November 2020, which contains a clear reminder statement of principle on AVE:
The message remains consistent and clear: we continue to believe that AVEs do not demonstrate the value of our work. It is important that communications measurement and evaluation employs a richer, more nuanced, and multi-faceted approach to understand the impact of communications.AMEC Barcelona Principles 3.0
Note that if you enter a CIPR award programme for public relations campaigns with the expectation of winning a prize, set that expectation very low if you have used AVE in your measurement – you’ll get a zero score on measurement if you have.
Be smart, and do yourself and the PR profession a favour – don’t use AVE.
(I created the image at the top with Bing Image Creator from the simple prompt “PR professional studying a newspaper.” Goodbye stock images.)
[Edited 31/3/23:] I’ve corrected item 2 in the numbered list above to accurately express the point that AVE underestimates the value of PR which now includes references to organic reach and SEO benefits. Thanks to John Hellerman via LinkedIn who pointed out the ambiguity of what I’d originally written.