Lessons from 2016 as a guide to 2017 priorities…
23rd January 2017
A critical response to the eight main arguments against AVEs in Macnamara’s paper
26th July 2017

The communications industry has long struggled to prove the value of its work.  In part, the answer must be to do more self-evidently valuable work, but making the case beyond that has often been haphazard.

What follows is not an attempt to justify advertising value equivalents (AVEs).  Not at all.  Nor is it to criticise those who don’t use measurement to make their communications more effective.  After all, any measurement will be more informative than none, provided it is clear what is and is not being measured.

The communications industry is picking the wrong fight

For all that nobody likes AVEs, the reason they won’t go away is because they can sometimes measure something useful just as well as some other bad measures that the industry does accept.  What’s the difference between AVE and OTS, after all?

In other words, it’s a double standard.  The industry is picking the wrong fight.  What the industry should fight is bad measurement or no measurement at all.

It’s a more nuanced position, but there might be more chance of success focusing outrage and opprobrium on the wrong use of AVEs rather than just wishing them out of existence.

Why measure?

Good measurement should have two purposes.  The first (and most common), to justify why the activity was done.  To evaluate whether it did what it set out to do.

Second, measurement should help inform how future campaigns can be more effective.  At its best, it can even inform how a business behaves and develops.

Effective measurement goes to the heart of building and protecting reputation, driving sales, building loyalty, changing legislation, motivating your people or any of the other reasons for communicating.

Recognising the value of reputation

There is growing evidence that as boards start to appreciate the value of reputation they are seeing it as too important to be left with communications teams.

Compliance and risk management departments are getting in on the act.  They have more scientific and business-friendly approaches to measurement than their communications counterparts.  The Financial Reporting Council has argued that boards should pay closer attention to reputation.

The difficulty is that communications teams often use evaluation without being clear what they are trying to measure or how they are going about it.

Be clear what you are measuring

Though heresy to say it, in that respect the universally condemned advertising value equivalent is hardly worse than many more fashionable measures.

Many industry award bodies refuse to accept AVEs.  The once-favourite measure has long been on its last legs, but it may still be valid to ask whether AVEs still have a place in the tool kit.

That place would not be to measure return on investment, the reputation of a business or the contribution to sales.  But up to a point, by approximating the volume and reach of coverage, AVEs can say how loud a campaign has been, if not who listened or what they did.

Until the communications industry really starts to take measurement seriously perhaps it should let AVEs stick to what they do.  To measure the noise, if not isolate the signal or assess the value of the work.

Rather than condemn AVEs, the industry should out-shine them with something palpably better.

The misunderstood and meaningless AVE

More than a third of businesses still use AVEs, no doubt too often simply to measure what is possible to count, rather than having identified what is important or informative and then selected the best tool to track it.

Few people really understand what AVE means, other than it is roughly what editorial coverage might cost if it were advertising space.  But the criticism is rightly that AVE numbers are muddled.  They do mix up different sorts of hazy information.

For example, most people don’t understand the multiplier used with AVEs, if they even know a multiplier is used.  That’s when the advertising value of coverage is multiplied three, five, seven or 11 times.

The proliferation of multiplier values reflects the lack of any meaningful research into how far audiences value editorial more than advertising. Perhaps the AVE rate should reflect that increased value.  But the lack of rigour behind what is a legitimate multiplier (which, done properly, may vary by media type) adds to the confusion.

Increasing volumes of media inventory, particularly online, and dwindling audiences mean the cost of advertising fluctuates.  So the AVE measures a moving target.

And the cost is based on the rate card, not what the market actually pays for advertising.  So it is a false comparison as AVEs cannot reflect the heavy discounts that brands and wholesale media buyers get.

What’s more, that rate-card price is a “cost”.  The value it delivers is another far more complicated question.

In other words, AVEs fail to compare like with like.  There’s no doubt they do not measure the value of editorial on its own intrinsic merits.

But that is very hard to do given editorial does not have a tradeable currency.

More rigorous approaches

Meanwhile, the steps that the media evaluation industry have made to establish better and more effective metrics should rightly be applauded.

The Valid Metric principles, developed by AMEC, the international evaluation trade body, are a great step forwards.  All the more so for the updating of the Barcelona Principles that sit behind them.

They are based on the desire to measure the outcomes of any activity, and so they focus on linking those to the outputs that brands and agencies can influence.

Arguably the Valid Metrics biggest contribution goes beyond evaluation.  They encourage the PR and communications industry to think about the business impact it has, or the impact that it would like to have.

That said, the Valid Metrics are often easier to explain than they are to put into practice.  For anything but the most straightforward business they need sophisticated data analysis or very keen reporting to work out which channel had what effect.  That requires the right data to get started.  It is not always easy.

For many businesses that should not be a problem.  Those that do have the data available and the expertise and budgets to crunch the numbers can get a clear view of what each of their comms channels is delivering.

Something is better than nothing

Yet as Leo McGarry said in West Wing, “we can’t afford all the things we want”.  In other words, many businesses simply don’t have the budgets, data, sophistication or inclination to work through that level of detail.  In many cases their scale of activity wouldn’t justify it.

Communications evaluation should be democratic enough to cater for those that don’t have the resources for full-on data analysis.  They should have a quick measure which tells them something about the value of their work and how to improve it.

The right tool for the right job

There are many other measures available to help deliver low-budget evaluation that can show the impact activity has.

Some of these include message-to-audience, opportunities to see, cost per thousand, web traffic, qualitative research among intermediaries, changes in favourability or awareness, share of voice against competitors, increasing numbers of followers to a blog or community, gross rating points, stakeholder feedback and direct sales inquiries, to name but a few.

They also include the much-maligned advertising value equivalent.

Whichever method is chosen, the important thing is to be clear what it is that’s being measured, why and what it means.  One size does not fit all.

In defence of AVEs

For some businesses, and in some cases, it is hard to see what’s wrong with using AVEs.  If the business has a clear view of which media it wants to be in, it may simply want to track whether this year was (broadly) louder than the last one.

It may want to see which story made the most noise or how the share of voice compared with a competitor in that media.  It may simply want a measure of volume, space and audience numbers (regardless of who they were). Or it may wish to measure just a specific element of the broader comms programme.

As with all evaluation, the key is to be clear what any measure does and does not tell you and not to over claim, over interpret or misinterpret.  If you know the shortcomings, fine.  Operate within them.

Everything has its place

All that the PR industry has done to get beyond using AVEs as the default evaluation tool should be applauded.  There is much further to go, to find an accurate way of putting a monetary value on the investment in communications.

But are we in danger of throwing the baby out with the bath water?

Just as using AVEs can often rightly be criticised as lazy thinking isn’t it just as lazy simply to condemn them out of hand on every occasion?

Why wouldn’t the cash value of the right media space be a simple shorthand for measuring a goal, if that goal is simply to maximise the volume and reach of coverage?

If the rehabilitation of the AVE was ever going to be taken seriously standardising how it is measured would be vital.  Get rid of the multiplier altogether.  Don’t vary the base data as advertising rates fluctuate.

Recognise it is based on an advertising cost, and that understanding the value of publicity is a different thing.

Find a way to get like-for-like comparisons across print, TV, radio and online, not to mention meaningful figures for non-commercial BBC.  This shortcoming also applies to many other measures such as opportunities to see and audience reach.

(A mention on Mail Online reaches an audience of 250 million people, apparently. That’s everyone in the UK and two thirds of the USA.)

Time for a rethink?

Who knows, one day it might even be time to let AVEs back into the annual award programmes, perhaps re-framed as ACEs (advertising cost equivalent).

Of course, entrants would have to make the case for why AVEs are the right measure to assess whether that campaign made a valid contribution to the business.

A clear understanding of that value and how it is delivered is still the challenge across the board.

That’s why I’m delighted to be part of the communications and evaluation team that set up The Measurement Practice (www.measurementpractice.com) to help business better measure, understand and improve the value their PR and communications deliver.

*   *   *

 Guy Corbet (@GuyCorbet) is an independent communications consultant and an associate of The Measurement Practice which helps businesses and agencies better measure, understand and improve the value that communications delivers.

1 Comment

  1. […] The Advertising Value Equivalent (AVE) has long been a foe to meaningful PR measurement.  This month, two communicators gave their thoughts on the metric.  Stephen Waddington backed AMEC’s framework as a more effective measurement approach.  He also turned the criticism that’s usually levelled at the PR professional on to measurement suppliers (and AMEC members).  Or, to quote, the PRCA’s Francis Ingham: “if measurement and evaluation companies stopped providing AVEs it would kill them overnight…”.  Meanwhile, over on The Measurement Practice, Guy Corbet similarly backed AMEC’s approach but flagged that good measurement can be a costly exercise, and that the AVE could serve a purpose, if rehabilitated.  Read more […]

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