Right up front, let me say that Advertising Value Equivalency (AVE) is an intellectually bankrupt concept and a desecration of all that is good and right in the world.
Wow! It felt good to say that out loud.
AVE is a purported measurement tool that attempts to assign a monetary value to print or broadcast media placements. The idea is to — literally — measure the number of column inches or minutes of airtime a story consumes, and then, using the published advertising space rates for that media outlet, calculate the “value” of the placement as if it were a paid advertisement.
For as long as I have been in the Public Relations business, people have sought ways to measure the value of a PR placement. If we could devise a way to connect a dollar value of a placement to the investment our companies make in generating positive press coverage, it would make it easier to justify that investment and even make the case for increasing it. Eventually, some sharpie cooked up the specious idea of AVEs.
It’s specious because it actually looks like it might work. But it crumbles on closer examination. Studies have shown that consumers believe news stories (which are presumably written by an unbiased third party) are more credible than advertisements, in which you can pretty much say whatever you want if you pay for the space to say it in. Wouldn’t that suggest a PR placement could be worth many times what an ad is worth? If so, AVEs could wind up short changing you.
But there are so many factors to consider when calculating value – really, the list is almost endless. Was the story devoted to your company, or does it feature your competitors? If the latter, should that reduce its value? Is it an in-depth profile or a brief mention buried at the bottom? Front page or next to the obituaries? Did the story run on Sunday, Wednesday or Friday? These last two are important because ad rates change for every day of the week and location within, for example, a newspaper or magazine.
Value is not a constant. I can write all my ideas about a subject on pieces of paper and fill up two flour sacks – a five-pound sack and a ten-pound sack. Obviously, the ten-pound sack has twice as many ideas in it as the five-pound sack. Is the ten-pound sack worth more than the five-pound sack? It depends. If all my good ideas are in the five-pound sack and all my lousy ideas are in the ten-pound sack, we should agree once and for all that size doesn’t matter. So, a one-inch item on the front page of the Wall Street Journal that notes a new product launch may be more valuable to you than a 20-inch column inside that includes all of your competitors and doesn’t differentiate you from the pack.
And we haven’t even considered whether the article is a good one that you can’t wait to shove under your boss’ nose, or a body slam that stinks like it emerged from the scorched bowels of Satan himself.
AVEs continue to pop up throughout the profession, despite compelling arguments against their use by respected authorities such as the Institute for Public Relations. http://bit.ly/TbfDy7 (Full Disclosure: I have served as a trustee of the IPR.)
I had my own experience with AVEs a few years ago. My boss called me into her office and announced, “I want to start an Advertising Value Equivalency program.”
Me: “Sure thing, boss. But are you aware that several leading thinkers on PR measurement consider AVEs to be an intellectually bankrupt concept, and a desecration of all that is good and right in the world?”
Boss: “I am. But let me ask you a question. Do you still have two mortgages?”
Me: “Yes I do.”
Boss: “Still got a kid in school?”
Me: “Uh huh. I see where you are going with this. I’ll get started right away!”
My next call was to the research and measurement expert at a major PR agency.
Me: “I need to start an AVE program.”
Expert: “No problem. But are you aware that several leading thinkers on PR measurement consider AVEs to be an intellectually bankrupt concept, and a desecration of…”
Me: “Yeah, yeah, I’ve got that. When can we start?”
In short order, we had concocted a methodology for calculating AVEs that had enough moving parts to make it look respectable. (A piece of advice: Calling something a “methodology” is way better than calling it a “crackpot scheme.” Just a little bit of hard-earned wisdom. But I digress.)
Before long, the AVE machine was cranking out charts and graphs showing all of the fantabulous press coverage we were getting. And the ad values went through the roof. We were generating clips worth millions of dollars every month. We had to hire a troop of elves at the agency just to crunch the numbers.
And it was all crapola. Apart from the dubious efficacy of the task in the first place, we didn’t — and couldn’t — include all of the astoundingly negative coverage that we were receiving every day. We were a financial services company at the dead center of the financial crisis and we weren’t counting the daily barrage of accusations and opprobrium toward our company that was washing in our front door every morning. Our algorithm (that’s another excellent obfuscating word, by the way) could not calculate dollar values below zero.
The other thing AVEs can’t do is put a value on the really awful story that never ran. Many PR professionals can tell you about the time they pulled a rabbit out of a hat to change the course of a negative story or even get it spiked. Here’s one of mine.
The president of the company I was working for at the time gave an interview to a financial newswire in which he misspoke. And I’m not talking about confusing “which” and “that.” It was a mistake that was bound to become Exhibit A in the litigation we knew was coming.
I was able to convince the editor that it was a harmless mistake and he agreed to take the quote out. The story ran and all was well in the kingdom. But this particular newswire also publishes some of its content in a monthly magazine, and somehow the offending quote got left in. I got an advance copy and was apoplectic. I called the editor and to his credit, he ran right to the managing editor and in what was probably the most painful financial decision they made that year, they had the entire print run of the magazine, which was sitting on a loading dock in London awaiting shipping, destroyed. The article was edited and the magazine went back on press. I didn’t try to get any stories there for a while.
Our company lawyer told me that if that story had run unedited, it could have cost the company a billion dollars or more in lost litigation. Alas, even though I like to think that I saved the company a billion bucks, none of it ever found its way into my bonus.
(In a future post, I will discuss some ways that you can more reliably measure the impact of media coverage, even if not by calculating a monetary value.)
Categories: Random PR Thoughts