AVE, Still an Inaccurate Yardstick
Recently I’ve received a few requests from clients to provide Ad Value Equivalency (AVE) metrics. AVE is widely criticized by our industry as inaccurate for numerous reasons, but the influx of social media, Twitter, blogs, message boards, Facebook etc. makes AVE even more inaccurate.
At Dow Jones, we do not recommend using AVE as a best practice or as a mediocre practice for that matter. The metric seeks to illustrate the value of a company’s mentions in the media by using the number of column inches the article uses and matching that to the cost to run an equivalent size ad in the same publication. This derives a dollar value for editorial space such as: if an article mentioning your company/product/brand in The Wall Street Journal is 2″ x 6″ and an equivalent advertisement in the WSJ costs $40K (made up number), then the article is worth $40K in AVE.
AVE is inaccurate in many ways, but mainly it fails because it seeks to show ROI on PR efforts by using an advertising yardstick.
Getting into the details, not all articles in the media are positive, and rarely are they as positive about a company as an advertisement would be. Would a company pay top dollar for a neutral or mildly favorable advertisement? Additionally, calculating column inches does not take factors such as placement, design elements such as font, page layout, photos etc. into account. Further, and perhaps most importantly it is difficult to predict how readers will react when they see an ad vs. when they see an article about a company or product.
Social media and non-advertising Web media add yet another reason against using AVE. If your company is seeking to gain exposure in a specific blog that does not advertise, or in product message boards or other non-advertising spaces online, mentions in those outlets would not count in the AVE model. Add Twitter, Facebook, LinkedIn and other social media sites to the equation and the AVE metric falls further off of the wagon.
As a metric, AVE doesn’t hold water and it cannot effectively measure value of social media. Advertising costs are different from PR spend. I’ll post some alternative PR ROI methods for those seeking to assign dollar values to PR performance in my next post. Additionally, I’ll add a review of a recent paper “A New Paradigm for Media Analysis: Weighted Media Cost” by Angela Jeffrey, APR Vice President Editorial Research, VMS; Bruce Jeffries-Fox President, Jeffries-Fox Associates and Brad L. Rawlins, Ph.D. Chairman, Department of Communications Brigham Young University.
Matt Donahue is a media consultant based in Washington, D.C.