Gini Dietrich

Die, AVEs, Die!

By: Gini Dietrich | February 16, 2016 | 
51

RIP AVEsBy Gini Dietrich

Alright, boys and girls. We need to have a talk.

AVEs, or advertising equivalencies, are not metrics we should be using to validate our work.

In fact, doing so is irresponsible. It’s irresponsible to our clients (internal or external), it’s irresponsible to our industry, and it’s irresponsible to your career.

Before we had the Internet and access to immediate data, AVEs were one of the only ways we could show validity in our work. But even then they were flawed.

For instance, let’s say your company or product or service is mentioned in an article. It’s just one sentence in the entire piece. What’s the advertising equivalent of that?

You can’t even say it’s equivalent to an eighth or quarter page ad.

Not to mention, earned media tends to be more credible than advertising, so how do you measure that? Is it a multiple of five? 10? 25?

It’s not a great way to show effectiveness of a PR program.

And yet…

What is the Real Value of PR?

Meltwater recently released a white paper titled, “Estimating the Real Value of Public Relations.”

The white paper is behind a landing page, but I’ll save you the trouble of having to download it.

Meltwater invited Forbes contributor and PR veteran Robert Wynne to weigh in. Explore various approaches for estimating the value of public relations and find out why he thinks AVEs are the simplest (and best) one.

Head. Explode.

But that’s not even the best part. That’s to just get you to download the eBook.

The best part is that Wynne uses “research” that was conducted between 1998 and 2005 (yes, before social media or Big Data made their entries into communications) that showed editorial served a better purpose than advertising.

Not a big surprise. We knew that.

But we also know, according to the Edelman Trust Barometer, that although trust in media is up slightly from last year, it’s still not even at a passing grade (less than 60 percent).

To top it off, Meltwater defends their eBook by saying, “Reporting needs to differ, therefore we avoid constraining customers to only one measurement or insight.”

Screen Shot 2016-02-16 at 6.09.26 AM

Not only are AVEs irresponsible, but the vendors who support the industry and support this flawed “metric” are irresponsible.

AVEs Are Not Real Metrics

In this eBook, Wynne goes on to make his argument for AVEs:

Everyone knows what advertising is worth because TV networks, websites, magazines, and others put a price on it. And businesses pay for it.

What else are we going to compare it to? The market says ads are worth X for Y space in Z publication. The market has already set the price and the commodity to be compared to.

He then shows a case study from one of his clients:

For our client Menlo College, we placed a half-page story on the front section of the San Francisco Chronicle. A half-page ad costs about $20,000. The PR Value equals at least $100,000, not including placement on the website.

So what he’s saying is a half-page ad in that paper is $20,000. But, because editorial is so much more credible, he can use a multiplier of five to get the AVE (which, by-the-way, isn’t always the multiplier; he says it can be anywhere from five to 100 times).

The PR Value then becomes $100,000 AND SO WHAT?!?

  • Did it bring people to the website?
  • What did those people do when they visited?
  • Did they view the home page and leave?
  • Did they spend time digging through the site?
  • Did they download any content, subscribe to the blog, or register for a webinar?
  • Did they go into an email automation workflow?
  • Did they have the opportunity to buy?
  • Did they buy or did they abandon their cart?

I’m all for saying, “We got this half-page article on the front page of the San Francisco Chronicle.”

That’s awesome!

Where I have the problem is using AVEs to measure effectiveness.

It’s not really worth $100,000 UNLESS the people who visited the website directly from the article bought $100,000 in products or services.

Then its really worth $100,000.

A Condemnation

Right after the eBook was released, PRCA and ICCO issued a joint statement condemning it.

We are astonished that any credible measurement and evaluation professional would make the case for AVEs. AVEs measure absolutely nothing other than the vanity of those reporting them. I had hoped that the evaluation community had condemned them to the rubbish bin of history years ago.

To say that clients are used to them is to miss the point utterly. Some clients are indeed, but more enlightened ones know how meaningless they are, and have embraced the proper analysis of outcomes instead. Yes, there is further work to be done here, but accepting a broken system simply because some people are used to it is surrender of the worst kind.

The author makes much of the “Manhattan Beach Principles.” Frankly, I’ve never heard of them, and I doubt that anybody in the industry has. The principles that I believe in are the AMEC Barcelona ones, refreshed only last year, and endorsed by the PRCA, ICCO and the 33 associations ICCO represents.

I trust that Meltwater will repudiate this bogus paper with immediate effect.

To their point, there are still some clients out there who ask for AVEs.

I say give them to them…and also show them the data that supports how many qualified leads you are bringing to the sales department to nurture and close.

Show them how much your qualified leads equal in generated revenue.

I promise they’ll no longer care about AVEs or impressions or anything else.

They’ll only care about the kind of work you’re doing that is making the organization money.

If you need help with other PR metrics, check out what to measure in the PESO model. You’ll see AVEs are not mentioned anywhere.

Let’s Not Squander Our Opportunity

We have a gigantic opportunity to not only show we are an investment, but to prove it.

We have a gigantic opportunity to lead strategic planning.

We have a gigantic opportunity to work hand-in-hand with our marketing discipline brothers and sisters.

We have a gigantic opportunity to finally sit at the table with the big kids and show how PESO, when integrated well and efficiently, drives more revenue than anything else (including cold calls and golf outings).

Yes, it’s a lot more difficult to track and measure all of that, but only because it’s data collection and it takes time (and it’s a little bit of math, which I know you all hate).

It’s certainly harder than saying, “A half-page ad in the paper is $20,000 and I think we should use a multiplier of 45 this time, so the PR Value is $900,000.”

But, once you get your system set up, it can become automated and provide you dashboards that not only help you prove that your half-page article in the paper actually generated $900,000, but give you the data you need to make decisions about your communications campaign, in real-time.

Please, for once and for all, let’s let AVEs die.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

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51 Comments on "Die, AVEs, Die!"

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Jo Lynn Deal
3 months 8 days ago

I can’t imagine creating content that gets rebuked by industry leading companies. Wow! I remember in the early 2000s attending a presentation by a tourism bureau and them mentioning AVEs. As someone not familiar with them at the time, I thought, how did they get that number? And just like you pointed out, I wondered what good it did for the destination. How many room nights? Visitors? Technology allows us to provide so much valuable data to our clients. I can’t imagine not using it in this day an age.

Jodi Echakowitz
Jodi Echakowitz
3 months 8 days ago

While it’s bad enough that a “PR veteran” produced the white paper, the fact that it was published by a vendor that serves the PR industry is just astonishing.

Travis Peterson
Travis Peterson
3 months 8 days ago

I saw that piece. Even downloaded it. And then it was all AVEs-which of course is interesting because Meltwater (we use them) doesn’t even track print coverage very easily, only digital, which is where the “big” AVEs are.

May they forever have newspaper ink on their hands and their computers run slow.

LTreu
3 months 8 days ago
Our dear friend Shonali had a nice Facebook rant that touched on this the other day… I think the fact that AVEs keep coming up is just indicative of the fact that communicators are so pressed to show hard ROI in every endeavor, yet impact in some channels will always be more easily measured than others. We see the same problem with content marketing, and hence we hear Joe and Robert of CMI having to constantly repeat themselves that you can’t expect short term sales boosts from long-term brand building strategies. It’s just the nature of the game. Did you… Read more »
Alberto Canal
Alberto Canal
3 months 8 days ago

Well said. Measurement should start with business goals and as communicators we need to work back from there.

Mark Schaefer
Mark Schaefer
3 months 8 days ago
Respectfullly, I would like to provide a contrarian point of view. Your comment: “It’s not really worth $100,000 UNLESS the people who visited the website directly from the article bought $100,000 in products or services.” … is untrue. Brands spend millions of dollars on ads EVERY DAY with no absolute knowledge of a connection to sales, web visits or leads. You’re saying that Anheuser-Busch knows the ROI of the Clydesdales. They don’t (as a recent Ad Age article attests). PR is as much as art as science. Why not accept that? I do not know the guy who wrote the… Read more »
Danny Brown
3 months 8 days ago

The first warning sign should have been the fact it’s from Meltwater, who lack authority in many marketing circles for the very reasons you mention in your critique.

The second is using a thought leader who thinks it’s fine to make up numbers to supposedly add weight as to why a publication front page equals any amount of ROI based on the name of the publication, versus what you (rightly) say is negative ROI until proven otherwise.

Thanks for continuing to show PR and marketing should be working hand-in-hand for business goals, results and metrics.

JeninSTL
JeninSTL
3 months 8 days ago
I agree with Mark. I realize that AVE’s are extremely problematic and not at all a perfect measurement tool but I use them in my reports because they’re requested by the data-minded business minded individuals I work with. They want to know ROI and they want hard numbers they can compare year after year. How does 2014 compare to 2015? They want numbers even if we insist that the numbers aren’t accurate. The other problem is that every year I will spend about a month digging through white papers, blogs and slideshare presentations trying to find out what a better… Read more »
Danny Brown
3 months 8 days ago

You can present hard data and year on year growth, results, etc., without defaulting (or making a good chunk of the data) to AVEs. They’ve been pretty much ridiculed by not just marketers, but PR leaders (actual leaders) for a while.

Katie Paine is one of the most respected people in the PR measurement space, and she talked about this back in 2014:

http://painepublishing.com/the-number-1-reason-why-pr-gets-no-respect-stupid-metrics/

Sean Fleming
Sean Fleming
3 months 8 days ago
I never liked AVEs when I was a PR practitioner. I’ve never met anyone agency-side who did. In fact, does anyone really think PR practitioners like AVEs? Clients like them because for all their faults (and there are many) AVEs give you a simple number that you can track month after month after month. I had one of the UK’s major banks as a client just a few years ago, and they insisted on AVEs for their monthly reporting. We didn’t technically offer AVEs, but we had to for them. Why did this happen…? “We’re bankers,” they said, “we get… Read more »
RobBiesenbach
3 months 8 days ago

That’s what you get for reading white papers. Bleh! I think whoever invented the term “white paper” probably did it to ensure that nobody would bother reading and verifying his work.

Danny Brown
3 months 8 days ago

HA! Well, I hear they can be handy for getting speaking gigs and being viewed as “thought leaders”… 🙂

RobBiesenbach
3 months 8 days ago

See now, both of your posts deserve a polite “like” (probably a superficial metric, right?), but under the new system I have to write a reply.

“Thought leadership” is right up there with white papers. Bleh!

Danny Brown
3 months 8 days ago

Thought leader rhymes with pot breeder. True story.

Kate Eidam
Kate Eidam
3 months 8 days ago
To all the folks holding onto AVEs: 1. AVEs are not the language of business. Perhaps they are a prehistoric metric that non-PR execs understand because they’ve been used so prevalently. HOWEVER, just because it’s been done the same way for decades is not a good enough justification for their continued use. How marketing is measured has evolved and matured, as should PR, if we want to continue to have a seat at the table. (Many non-marketing execs don’t think highly of “impressions” either … they’re demanding marketing efforts be measured with business outcomes in mind. AVEs = same boat)… Read more »
Danny Brown
3 months 8 days ago

“But it’s also our responsibility as stewards of our employers’ and clients’ dollars, their business interests and their customers to not be satisfied with the status quo.”

Boom.

Sherrilynne Starkie
3 months 8 days ago

I went to see a client last week with a deck that showed exactly how our content marketing program delivered 120 sales of luxury, high-ticket items in six months. The client signed for another six months and is introducing us to key partners.

Hard data rules!

Aly
3 months 7 days ago

This reminds me of the time the agency I was working for, circa 2005, showed a client a report that totaled over $2M in AVEs. $2M! That was more than a 10X return on their PR investment. The client thanked us for the beautiful clip book, which took our intern approximately two months and two credit hours to product. Then they fired us.

Why? Because their revenue was weak, their stock price was plummeting, and they couldn’t tie any business success back to PR.

“I’m out.” — said Aly Saxe

howiegoldfarb
howiegoldfarb
3 months 7 days ago
I fully agree 100% Most ad $ is wasted anyway so why do you want to compare to wasted ad $? Now for the discussion we have been having on PESO. I don’t view earned media as something you pay someone to generate. To me that is paid media though of a different sort. Earned is when you generate stories organically because your product or service is so good you get coverage. And that actually is the angle you are talking about. Why should I spend on a PR effort as a marketing channel vs spending on other channels. It… Read more »
theelusivefish
3 months 7 days ago
This morning I had egg on a biscuit from Tim Hortons. The AVE proponents would be reporting that I had four breakfasts this morning because the egg value equivalency for Eggs Benedict at the Waldorf-Astoria would be $17. Is it easier to tally up what equivalent ad space would have cost and multiply by five, as opposed to identify what your criteria for success are and track how much your efforts lent towards achieving that criteria? Hell yes. But you know what’s easier still? Take your PR budget and multiply it by ten. That’s your PR Guestimated Value. If you’re… Read more »
Christine Perkett
3 months 6 days ago
Great article, Gini. I believe part of the issue is that AVEs are easy, and they often satiate a Boardroom, so PR executives continue the practice. Until brands recognize that AVEs are not a realistic measurement of success, agencies and vendors will continue to offer them. Meltwater’s response is that “Many PR people want to do this so we let them.” That’s a short sighted strategy for immediate revenue and not a long term strategy for innovating and improving our industry as a whole. Meltwater is not the only vendor to measure and promote AVEs. When we’re asked, we are… Read more »
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