AVEs are a Disease – Here’s a Little Vaccine

16 Apr

One of the truly insidious aspects of public relations measurement is the use of advertising value equivalency (AVEs) or media value to assign financial value to public relations outputs.  It is a highly flawed, path-of-least-resistance attempt to calculate return on investment (ROI) for public relations.   To make matters worse, the practice has clearly moved into social media measurement as well.  For example, research studies that attempt to monetize the value of a Facebook Fan/Liker by attributing a CPM value from the advertising world.  Online media impact rankings also utilize equivalent paid advertising costs to assign monetary value to online news and social media.  AVE is like a disease that has infected and spread throughout the public relations industry.

In June of 2010, the PR industry came together in Barcelona to draft the Barcelona Principles, a set of seven principles of good measurement intended to provide guideposts for the industry.  The principle that has generated the most conversation is this one:

Advertising Value Equivalency (AVE) is Not the Value of Public Relations

 While many of the Measurati have been preaching against AVEs for years, there now appears to be a critical mass of outrage that may kill the practice in the coming years.  Here are four compelling reasons why I believe we must make this happen – the sooner the better.

1. AVEs Do Not  Measure Outcomes

AVEs equate an article with the appearance cost of an advertisement.  It does not speak at all to the results or impact that the article may have on a reader.  Advertisers do not judge the success of advertising on how much the insertions cost.  Imagine an advertising manager being asked by his or her boss, “How are we doing in advertising this year?”, and them replying, “Great!  We have spent $500,000 so far!  The true value of public relations or social media is not the appearance cost, but what happened as a result of the PR or social media effort – the impact it has on brand, reputation and marketing.  You will note the Barcelona Principles also call for a focus on measuring outcomes and not (just) outputs.  What happened as a result of media coverage is inherently more interesting and valuable than how much coverage was obtained.

2. AVEs Reduce Public Relations to Media Relations

You are, or become, what you measure.  AVEs do not address the impact or value of several important aspects of public relations including strategic counsel, crisis communications, grassroots efforts, viral campaigns or public affairs.  In other words, AVEs reduce PR to just the media dimension by only assigning a value in this area.  If only AVEs are used to assess PR value, the results will understate the totality of value delivered by PR.  AVEs also cannot measure the value of keeping a client with potentially negative news out of the media, yet that may be the primary objective of the PR practitioner.

3. AVEs Fly in the Face of Integrated Measurement                

Good marketing, branding and reputation campaigns have always been integrated to varying degrees.  The digitization of our lives has accelerated integration.

Advertising and PR actually work together synergistically, yet AVEs treat them as cost alternatives.  Studies have shown ads that run in a climate of positive publicity actually receive lift from the PR.  Conversely, ads run in an environment of negative publicity will likely not be successful and/or may be perceived negatively by consumers.  We have seen exposure to brand advertising increases conversion rates in social channels. Integrated campaigns and programs require integrated measurement.  AVEs don’t play well in this world.  They are analog and segregated in a digital and integrated world.

4. AVEs Provide No Diagnostic Value

Too much measurement energy is focused on score-keeping and not diagnostics.  This is one reason why single-number metrics like the Klout score and others have great appeal to many.  However, measurement is fundamentally about assessing performance against objectives with sufficient detail and granularity to determine what is working and what is not.  AVEs fail miserably in this regard.  AVE results can actually be misleading and result in false positives.  AVEs may be trending up while important metrics like message communication, share of favorable positioning and share of voice are falling.  Unfortunately, AVEs provide neither a valid single-number score nor any diagnostic value.

Some have said the Barcelona Principles are the ‘end of AVEs’.  I would agree directionally with that statement with one minor addition, Barcelona was the ‘beginning of the end of AVEs’.  Awareness of the practice and recognition of its flaws are at an all-time high in our industry.  More education and evangelism are required.  Understanding concepts like impact, tangible value, intangible value and (true) return on investment help foster much more sophisticated conversation about the total value delivered by public relations and social media.  AVEs are a disease, education and knowledge are the vaccine.  AVEs won’t die easily.  The momentum generated by the Barcelona event has provided focus and intent.  It is up to all of us to make AVEs a thing of the past.

12 Responses to “AVEs are a Disease – Here’s a Little Vaccine”

  1. Chris Syme April 17, 2011 at 7:26 am #

    Thanks for continuing to carry the message and educate us. Particularly like the recurring message that AVEs do not measure outcomes. I am wondering why businesses are content to measure AVEs only when there is so much more available? Path of least resistance or ignorance of what is out there?

  2. metricsman April 17, 2011 at 7:57 am #

    Hi Chris, thanks for your comment. re: PoLR or ignorance, I think it is both, but primarily people want a way to show the financial value of PR or social media. To the unsophisticated, AVEs seem like a way to do that. As in many situations, however, the easy way is often the wrong way – it’s never quite that simple. -Don B

  3. Debra Bethard-Caplick, MBA, APR April 18, 2011 at 6:32 pm #

    I wish you’d posted this a couple of weeks ago, when we were jumping all over the Advertising vs. PR article in Ragan’s PR Daily. This would have been the perfect rebuttal to that misguided article.

  4. metricsman April 18, 2011 at 8:57 pm #

    Hi Debra, thanks for stopping by. I would have liked to have been asked to write that rebuttal, but I thought Shonali did a fine job with it. Had the Ragan article appeared on April 1, we would have all thought it a brilliant April’s Fool joke. That it didn’t appear on April 1 was unfortunate. -Don B

  5. Debra Bethard-Caplick April 18, 2011 at 9:21 pm #

    I commented on it on my new blog, from the perspective of what happens when blogging blows up in your face, instead of commenting directly on AVEs. I was surprised that she’s had absolutely no response to the comments.

  6. Mazher Abidi April 25, 2011 at 4:44 pm #

    Great read.

    I wonder whether you think that the talk about measuring social media and trying to figure out the ROI of social media has actually hastened the re-evaluation of the AVE as an accurate measuring schema?

  7. Katie Delahaye Paine June 29, 2011 at 7:48 am #

    Mazher I think you are absolutely correct. I can’t tell you the number of calls I get for a “social media version of AVE” when i tell them there isn’t one, we have a great conversation about measuring outcomes.

  8. metricsman June 29, 2011 at 4:25 pm #

    Mazher – what Katie said.

Trackbacks/Pingbacks

  1. Tors Tips - April 27, 2011

    [...] AVEs are a Disease – Here’s a Little Vaccine « MetricsMan – Four points about why not to be lazy about PR measurement [...]

  2. Đâu là thuốc chữa cho bệnh dịch nghiện sử dụng chỉ số AVE? - August 15, 2011

    [...] dịch bài này “AVEs are Disease – Here’s a Little Vaccine” dưới đây để xem các bạn debate và cứu chữa cái chỉ số có vẻ rất [...]

  3. The Biggest Lie in PR | Cision Global Analysts - September 1, 2011

    [...] Advertising Value Equivalency (AVEs). Very good arguments have been made (see examples from IPR and metricsman) but still they persist. I believe four factors keep AVEs alive and active in public relations: [...]

  4. PR-värde – tradition och fantasi | Tor Löwkrantz - December 4, 2011

    [...] och affärsresultat förändras av PR. ”Pr-värde” skapar falsk trygghet och motarbetar en sådan förståelse, allra helst i vår nya digitala [...]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 169 other followers

%d bloggers like this: