This is part two of a six part series about measuring the return on investment of public relations. 

Advertising Value Equivalents

The method of placing a value of editorial coverage based on what it would have cost if it were advertising is and old and increasingly discredited one.  However it remains the most popular method of demonstrating ROI.  A feature in last week’s PR Week demonstrated its continued widespread use while Metrica’s soon to be released ‘PR Measurement, Research and Planning in the UK’ research shows that the percentage of PR professionals who use AVEs has increased from 28% to 49% over the last decade.

The appeal of AVEs is that they are relatively easy to work out and they give a number with a pound sign in front of it.  The problem is that it is not showing any form of return, it is merely showing how much advertising would have cost if were in the same place (which it wouldn’t be) at rate-card value (which it wouldn’t be). 

The rise of online content makes life difficult because online advertising works in a very different way from print advertising.  In print the same ads appear in the same place in every copy of the newpaper or magazine.  Ad-servers mean that this is very much not the case for online sites.  As a good example, try refreshing The Sun’s homepage a number of times and see that different adverts are displayed while the content remains the same.

AVEs are also causing problems as the advertising industry is hit.  Trying to place a value based on something that is in sharp decline is probably not a good idea.  Plunging ad rates are leading to much lower AVE figures even though the quality of coverage may be just as good.  We recently had a client who, for historical reasons, used AVEs to report to their board.  Unfortunately their AVE totals fell by over 50% despite their volume of coverage more that trebling over the same time period.

The following four posts will show some credible alternatives to AVEs as a way of demonstrating the ROI of PR.

Next: Part 3 – Cost of Reach

Previous: Part 1 - Introduction