AVEs Don’t Describe the Value of Media Coverage, They Sensationalize It.

26 Jun

Saturday, Wall Street Journal columnist Carl Bialik, The Numbers Guy, addressed the subject of advertising value equivalency (AVE).  This is perhaps the first example of a mainstream media publication shining a light of the controversial practice of AVEs.  (You can read the story here.)

The primary reason advertising value equivalents exist are because they are perceived to be a way to attribute value to programs that would otherwise be difficult to value directly.  They are a path of least resistance approach to return on investment calculations, but not a valid one.  Let’s take a deeper dive into the three specific examples in the WSJ story, ask the tough questions and discuss more valid ways to think about value attribution and ROI.

American Airlines  

You can enjoy both questionable valuation techniques and hyperbole in this article.  American Airlines stands to “make boatloads of cash” and “the airline company could gain as much as $95.9 million of exposure”.  Of really, let’s take a closer look.

The most incredible part of this financial calculation is the financial calculation itself.  The calculation is apparently based on sign placement within the arena and presumably the ‘impressions’ the brand will receive when people attending the venue see the signage and when TV cameras catch the signs when showing the scoreboard or during the action.  This is a very passive form of advertising that should have as its objective either creating top of mind awareness or perhaps creating more brand affinity.  Rather than using an advertising equivalency model that has no validity, a true measurement of the value created by naming rights would ask a series of questions designed to determine the actual, tangible (or even intangible) impact on the business:

  • Revenue: Can incremental revenue generation in the form of higher passenger miles be directly attributed to the exposure created by the naming rights?  Is it possible that incremental revenue would actually be realized on a game by game basis, or would any positive impact be realized over a longer time horizon?  Have new customers been created as a direct result of the exposure generated by the naming rights?
  • Brand: Can the increased exposure lead to people perceiving the brand differently and can the difference translate into higher transactional revenues generated or increased brand loyalty?

So where exactly are the ‘boatloads of cash’ American Airlines made?  Are they hitting the income statement in the form of incremental revenue or enhanced brand loyalty (repeat business)?  Are they residing on the balance sheet in terms of brand goodwill?  Given that American’s parent company AMR lost $11.5B dollars in the first decade of the 21st century, its last profitable year was 2007 and they are projected to lose money in 2011 and 2012, they could use the cash.  Perhaps they could use it to fund a ’bags fly free’ program or for enhancing their Advantage program to create more brand loyalty.  I would strongly suspect American’s shareholders would prefer a do-over on the investments made on naming rights to the ‘boatloads of cash’ they are now enjoying from the investment.

Couple Won’t Cash In on Kiss

15 minutes of fame is rarely worth $10 million.  In this case, the celebrity agent is suggesting the news value of the coverage generated by the kiss is somehow equivalent to advertising value and assigns what appears to be an arbitrary and ridiculously high value to it.  (He later admits he just made the number up.)  Just how was the couple going to monetize their 15 minutes of fame?   Yes, they turned down a few talk show opportunities and perhaps the National Enquirer would have thrown a few dollars their way for an exclusive, but the assertion that any major brand would have paid them to endorse their product is wildly speculative.  I would guess that if you did a survey after the event, a small number of people would remember seeing the coverage, and a very small percentage of the people who did see it would have recalled Scott Jones’ name.  So perhaps Mr. Jones walked away from tens of thousands of potential dollars in the short-term, but nowhere near the sensationalized estimate of $10 million.  15 minutes of fame might be worth 10 thousand dollars, but certainly not $10 million.

Obama Enjoys a Guinness

So Guinness is a winner and received $20 million worth of “free publicity”?  What was the outcome of the publicity?  Again, in order to determine the value of the “free publicity” (this term is despised in the PR industry by the way), Guinness would have to be able to measure incremental revenues directly attributable to the publicity generated.  Did sales of Guinness increase as a result?  Were new customers created?  Did existing customers feel compelled to drink even more?  What was the value of the incremental sales?  These are much more difficult questions to answer but are the correct ones to ask in order to measure the publicity.  Not by focusing on the mythical value of the coverage as measured by flawed advertising equivalency, but measuring the outcome or what happened as a result of the publicity.  The assertion that President’s Obama’s image was softened and will help keep him in the public’s favor is highly dubious thinking.  Perhaps it helps him in Boston, but in the grand scheme of things, this is a Presidential image non-event.

Beginning last Summer in Barcelona,  the public relations industry has come together to publicly state advertising value equivalency is not a valid measure of public relations.  The so-called Barcelona Principles are explicit against AVEs and also call for a focus on measuring outcomes and not (just) outputs.  While it will take some time for the PR industry to totally leave AVEs behind, there is a lot of momentum right now to make this happen sooner rather than later.  No serious measurement effort can use advertising value equivalency to attribute value and be credible.  

25 Responses to “AVEs Don’t Describe the Value of Media Coverage, They Sensationalize It.”

  1. Katie Delahaye Paine June 27, 2011 at 4:01 am #

    thanks for this. I couldn’t have said it better myself

  2. jasonkarpf June 27, 2011 at 8:05 am #

    “Outcomes versus outputs.” That says it all. The fundamental problem with AVEs comes from assigning the most superficial advertising metrics to PR. Impressions are a preliminary calculation, but actual results are key.

  3. metricsman June 27, 2011 at 8:06 am #

    Thanks for stopping by, Katie, and for your kind words. High praise from the High Priestess of Measurement. Cheers, @Donbart

  4. metricsman June 27, 2011 at 8:09 am #

    Yes, Jason, you’ve hit the nail on the head. We really must swing the conversation away from ‘how much coverage did we get (hits and impressions) to ‘what happened as a result of the coverage’. This same logic holds for social media as well. It’s not about how many friends or followers you have, it’s about engagement and what happens as a result of that engagement. Thanks for stopping by.

  5. Bill Paarlberg June 27, 2011 at 8:31 am #

    Nice work as always, Don. And Carl’s piece wasn’t too shabby, either. As you say, AVEs are popular because they are an (apparently) easy answer to a hard question. My take is that they will continue to be popular until there is a inexpensive replacement.

    You may be interested in this recent release at The Measurement Standard, “AVEs Receive $10 Billion in Media Coverage, ROI of 54,321%”: http://tinyurl.com/43o42cg

  6. metricsman June 27, 2011 at 8:42 am #

    Hi Bill, Thanks for stopping by. Many people share your view on the need for an AVE replacement. And you may be right. I tend to think there is no easy answer to the tough question of ROI and value attribution. It is hard work and requires expertise and often more money than the data is potentially worth. Doing a $20,000 ROI study for a $100,000 program doesn’t make sense for example. The ROI of ROI studies may not be great. In these cases, we need to do a better job of describing the impact on business outcomes and show how these do or will contribute to financial metrics at some point.

    Thanks for sharing the link to your ‘release’. Very Onion. I literally laughed out loud while reading it. Tweeting it out now. Cheers, DB

  7. Sean Williams June 27, 2011 at 10:11 am #

    Don, as usual, well done, Sir. There are so many otherwise intelligent people engaged in the Metrics of BS that it’s just exhausting. AVEs are so hard to kill because they’re so “easy,” while linking activities to outcomes is so hard.

    The sports stadium story is great — I don’t know if there’s any evidence they create even a modicum of value — unless the sponsoring firm has so little brand awareness that there’s nowhere to go but up. KeyBank sponsored the main arena in Seattle, starting just a few years after their entry into the market and following acquisition of a local banking concern that dramatically increased its branch footings. But, there were still people coming to the teller window expecting to have keys copied. Might have made some sense to get that logo out there!

    The company’s research showed excellent gains in both unaided awareness and favorability, but I’m not sure that it translated into business (I worked there for several years.)

  8. metricsman June 27, 2011 at 11:45 am #

    Hi Sean – I really like the ‘Metrics of BS’ – and will use it, with attribution of course 😉 You’ve hit on an important point with your Key Bank story – aligning strategy with situation. Celebrity plays and sponsorship often are most effective in generating awareness, not in downstream metrics like attitudinal change or purchase consideration. So what makes sense for Key Bank very well may make no sense for an established brand, like American Airlines, that does not have an awareness problem, it has customer satisfaction and positioning issues. Thanks for sharing. -@Donbart

  9. Danielle Sherman June 27, 2011 at 12:10 pm #

    Hi Don — I couldn’t agree more. I did notice you said “…it will take some time for the PR industry to totally leave AVEs behind…” which caught my eye because when I was getting my PR degree and practicing it in the real world, it was never the PR people who brought up AVEs as a way to measure their effectiveness. Instead, AVEs were always inflicted on the PR department by marketing people who didn’t really understand PR and couldn’t think of any other way to measure the PR department’s effectiveness. Most PR people I know would be more than happy to leave AVEs behind and never look back; the challenge is in helping others understand some of the other tools that exist to help demonstrate PR success.

  10. Cindi S. June 27, 2011 at 12:25 pm #

    I could not agree with Danielle more. The reason that AVEs are so hard to get rid of is that they are so easy for non-PR folks to understand.

  11. metricsman June 27, 2011 at 12:35 pm #

    Danielle & Cindi,
    You are both right in that the PR industry’s behavior is influenced by more than just PR people – marketing, corp comms and even senior management are involved. But, its not like all PR people are against AVEs either. We really need all parties to be better educated in measurement for move ahead effectively.

    What is really easy to understand with AVEs for many people is the $ sign. Everyone would like an easy way to assign financial value to PR, but like most disciplines, that is easier said than done. There are both short and long-term value, tangible and intangible value driven by PR. The intangible and long-term are the most challenging areas to measure and assign value.

  12. Mark Weiner June 27, 2011 at 2:10 pm #


    As always, you’ve spoken and a beacon shines. As one of those interviewed, I was very happy that Carl Bialik (The Wall Street Journal!) looked to challenge the conventional wisdom of many now practicing PR (in my opinion, “conventional wisdom” is the greater enemy; AVEs just one subset). Let me add to the points already made:

    – Arena-naming is, in many ways, similar to advertising: the message/brand exposure is highly controlled and awareness-building just as a billboard’s…and I don’t consider it public relations even though the arena’s name may generate media coverage. So, in my opinion, stadium/arena-naming is more “sponsorship” than PR but maybe I’m splitting hairs.

    – “The Kiss” may have generated high visibility but the KISSERS seemed to wish it had never happened…at least for a while (Now they’ve hired a publicist but if they can capitalize and improve their life together, good luck to them).

    – Who says the president is the prototypical representative for Guiness…I voted for him but he isn’t exactly the Dos Equis man.

    While “outcomes” may be preferred, media coverage continues to drive the interests and priorities of most communication and marketing decision-makers towards PR. And even if “outcomes” are the beat to which you march, reaching your outcomes-destination WITHOUT outputs is the slowest path to victory. Conversly, outputs without outcomes is simply the noise before defeat.

    So we must continue to emphasize the balance and interelationship between outputs and outcomes. Can the profession do better? Absolutely. But simply promoting “outcomes measurement” without the strategic or tactical context gained through “outputs measurement” is impractical and even unprofessional.

    Thanks for shining the light!


  13. metricsman June 27, 2011 at 3:35 pm #

    Hi Mark – Thanks for your thoughts here – really good stuff. Couple of quick points:
    – On the AA arena-naming, I fully agree that Carl mixed his metaphors a bit since naming rights are a form of sponsorship and essentially act like venue advertising with a little signage on TV as ad thrown in. All that to say while it was a form of advertising value equivalency (venue/indirect to broadcast), it doesn’t fit the traditional PR/advertising translation model.
    – Agree with you of course on the need to measure both outputs and outcomes and their interrelationship. This allows for both ‘results’ measurement as well as valuable diagnostic info into how those results were achieved.

    You have several great turns of phrase in your comment. Ever think about writing a book? 😉 -Don B

  14. 40deuce June 27, 2011 at 3:58 pm #

    Great post! I’m with you in saying that AVE’s have no real credit.
    I think the best example to explain why it’s not relevant came from Katie Paine (who I noticed was of course the first person to comment on this post). I actually use this example all the time, so thanks Katie if you’re reading this:

    I don’t advertise on my blog. So there’s no advertising to compare what me writing about your brand/product on my blog would be worth to you. However, people who read my blog might take my recommendation of something very seriously (even though they don’t if you ever saw my personal blog, but that’s besides the point), which could be of great value to you. But how much advertising was that worth? Who knows? Who cares? Did it get some sort of outcome that benefited you? Then that’s what it’s worth.

    Sheldon, community manager for Sysomos

  15. Philip Sheldrake June 27, 2011 at 4:23 pm #

    Hi Don, just a quick comment from me (you can assume I agree with everything you’ve written here!)

    Picking up on the thread here to find a replacement to AVE, thought you might like the Friday Roundup I penned for the CIPR Conversation week before last on the topic of PR ROI: http://mnwh.li/ioDISf

  16. metricsman June 27, 2011 at 8:42 pm #

    Hey Sheldon, Thanks for your comment. There are many fallacies in dealing with AVEs. Certainly the one you cite. Consider a PR program designed to minimize the amount of media coverage (think crisis or layoffs, etc.). What is the value of your client/company NOT appearing in the Wall Street Journal. As you reinforce, measuring the value or impact of program objectives is a key to good measurement. Not all programs have the same objectives so each must be considered and measured differently. -Don B

  17. metricsman June 27, 2011 at 8:54 pm #

    Hi Philip, Thanks for stopping by, I am a fan of your work. I read your ROI post when it came out and agree with the points you make. ROI will never be a panacea or easy alternative to AVEs. A small fraction of PR or social media programs have ROI as their objective so holding them all to an ROI standard is problematic. Most programs are designed to create some sort of impact not ROI and therefore impact should be the primary path of measurement. ROI is fundamentally short-term, tangible and transactional. Many PR and social media programs have objectives that are longer-term, intangible and process-oriented. This is a fundamental disconnect. Also the I in ROI is meaningful particularly for many brands just beginning meaningful participation in social channels. They are in an investment phase in the near-term not a return phase. The return may come later after sufficient investment and time. Again, a fundamental disconnect if you are viewing the world through ROI glasses.ROI is important and meaningful, but it definitely is not a one size fits all proposition. Nothing is easy when attempting to attribute financial value. Isolation of impact and causality are significant challenges. Thanks again, Don B

  18. Diane Lennox June 28, 2011 at 11:16 am #

    So many great insights. The three examples in WSJ are the perfect poster children for why AVEs are just wrong.
    1. AA: As so many pointed out above, the story is about advertising, not PR. It’s content created by the brand and placed by it in exchange for dollars. Equivalency to what?
    2. Kiss: there’s nothing for sale here, no brand to build, no product or cause. Soooo, who is it good for? $20 million worth of what?
    3. Guinness: this comes closest to real PR. An apparently random event (though probably product placement); 3rd-party endorsement (he liked it); association with another recognizable brand (floats all boats?); positive sentiment (mmmm). And still, no clear value unless you know more about what the company wanted to achieve. Maybe it was world peace.

    My point – Even in the absence of all that nuance, it’s clear that PR to ads is apples to oranges. But add in the reality check — what delivers value for the brand — and you realize that the content matters, the audience perception matters, the context, purpose and result all matter far more than the inches or seconds onscreen.

    Barcelona forever.

  19. metricsman June 28, 2011 at 12:32 pm #

    Great comment, Diane, 100% agree. The reason why PR compared to advertising makes sense to some marketers, is they view them as alternatives – sort of an marketing mix optimization mentality.

  20. Peter Imbres June 29, 2011 at 8:22 pm #

    I agree with you that AVE is flawed but I’m not sure if I agree with the with argument put forth. Ok, so AVE doesn’t translate to revenue but that’s not really the promise of the measurement. AVE is an attempt to quantify editorial/earned media value against the cost of advertising in the context of specific media. The application of this is lazy in most cases, with a constant multiple applied to all editorial content, but that’s not necessarily the concept behind the measurement. If a brand wouldn’t buy paid media in the context where the editorial or earned mention appears, then it’s pretty much useless. However, if you were able to test message resonance for specific media and grade context better, you might have something resembling an equivalency value that makes sense for some brands (generally big advertisers). Of course, no publisher will ever want to promote a high AVE of editorial/earned vs advertising because that only serves to devalue your media so this won’t happen in the real world. The concept of AVE still intrigues me though since the idea of measuring attention or message pull-through should be at the heart of PR and earned media measurement. I don’t think it’s unfair to compare it to advertising in the context of an integrated campaign since it affects connected budget decisions.

  21. Sarah July 27, 2011 at 1:04 am #

    Brilliant, just had my first couple of months dealing with the PR industry and this is totally enlightening…makes anyone rethink those massive retainers they require.

  22. DanielleLatta July 27, 2011 at 3:58 pm #

    Great post! It raises some serious questions as to how companies should evaluate their marketing, PR and advertising investments. While AVEs are definitely flawed, they represent the bigger struggle of PR, marketing and advertising professionals’ efforts to place a monetary value on the results that are generated from today’s changing media.
    In a perfect world, every type of marketing could be quantified by impressions, views, clicks, or some other universal metric that would simplify the collective promotional investments of any one brand. The world as we know it is far from perfect and there is no such thing as a universal metric by which to evaluate the efficacy of the impressions generated through a sponsorship or PR camapaign.
    That being said, a better way to quantify these efforts is through the measurement of social media. While each impression gained the American Airlines sports sponsorship, or those gained from the “kiss,” will not be represented through the comments, Tweets, shares, and views on their respective social media vehicles, the social “buzz” generated by these events will show levels of audience engagement and can provide a more quantitative means by which to measure the efficacy of the individual impressions.
    If you are interested in how social media monitoring can be used to determine ROI, you should check out the white paper published by MutualMind on the topic: http://bit.ly/mmproi
    Socially charmed,

    Danielle Latta

    Brand Evangelist @MutualMind


  1. This Week in Social Analytics #5 at TweetReach Blog - July 1, 2011

    […] AVEs Don’t Describe the Value of Media Coverage, They Sensationalize It Don Bartholomew takes on the AVE issues raised in the WSJ article, continuing the call to end AVEs as a way to measure the value of earned media. “Measure outcomes and not (just) outputs.” Amen. […]

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  3. Shonali Burke Consulting, Inc. | MeasurePR: Why Are AVEs Still Around? - August 10, 2014

    […] In addition to the Wall Street Journal blog post and print piece, smart measurement guy and previous #MeasurePR guest Don Bartholomew of Fleishman-Hillard wrote a terrific piece challenging AVEs. […]

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