Ad value equivalency is probably the most controversial subject in PR measurement. Erica Iacono examines both sides of the issue
Chris Atkins, VP of communications at Standard & Poor's (S&P), is well aware that using ad value equivalency (AVE) as a way to measure PR is sure to raise questions.
"Almost anybody who is a student of PR recognizes the inherent flaws in a lot of the methodologies that have been applied to AVE over the years," he says.
So when he approached David Rockland, partner and global director of research at Ketchum, to develop an AVE model for the company, his challenge was to provide something that could be "defensible in a building full of people who do nothing but crunch numbers all day."
The result was a model that uses a special algorithm - taking into account a media placement's reach, type and prominence of the story, and positioning - to establish a score for each story. Once that is done, Ketchum farms out the data to VMS' PRTrak, which then calculates the ad value based on word count.
A main criticism of the AVE model is that it often bases its value on an ad rate that it is not actually paid by advertisers. Atkins says S&P's model takes that into account. S&P did an analysis of its fourth quarter coverage and submitted data to PRTrak - one based on straight rate-card data, the other based on the scoring algorithm. The raw rate card AVE was $14 million; with the algorithm it dropped to $6.7 million.
"Because we're being so conservative in how we calculate the value, we feel that it's defensible," Atkins says. "We do not rely on it as the sole means of demonstrating value, but many people here can get their heads around it."
Rather than look at AVE as a strict measure of the value of the PR function, Atkins says S&P is using it as a planning tool.
"I think people are dead set against AVE if it's misapplied and misinterpreted," he says. "We've developed a useful tool that hopefully will [indicate] over time that our efforts are improving."
Source of controversy
Certainly there are few issues in PR - and more specifically the PR measurement community - as controversial as AVE. So understandably Rockland, who is the newly elected chair of the Institute for PR's Commission on Measurement and Evaluation, is careful to point out that his views don't represent those of the Institute.
"I think AVEs can have a proper place in PR measurement," he says, adding that calculating AVEs properly is a matter of doing three things right: using net ad rates for calculation, adjusting for quality metric of the coverage (negative coverage, for example, should not count favorably toward an AVE calculation), and eliminating the use of a multiplier that automatically assumes PR is more credible than ads unless specific research has been done to prove that point.
Don Bartholomew, director of measurement and research at MWW Group, says part of the problem with AVE is in the name.
"I'd like the term 'media value' a heck of a lot better than 'ad value' because it's consistent with this economic argument that we've assigned a value for that space in the media," he says. "Once you start [comparing a PR placement] to an ad, that raises a whole other specter of issues."
Angela Jeffrey, VP of editorial research at VMS, says her research has shown that there is validity to what she refers to as "media cost data" when correlating media coverage to business outcomes.
"So far we have seen that media cost is 12.5% more accurate than audience impressions and 25.5% more accurate than story counts when you're doing these correlations," she notes.
That data also takes into account a story's tone, placement, and how much of it actually contains a mention of the client.
"We have to be responsive to what each client needs and what resounds with their management," adds Jeffrey. "I don't think we... can dictate what you have to do."
But even with a name change, Bartholomew says AVEs still only measure outputs, not outcomes.
"AVEs or media value reduce the PR conversation to just the media relations dimension by only assigning a value in that area," he says. "You are what you measure. If you're only assigning a value to media relations, then lo and behold, that's how people [will] think about you. You're not the people that help them with crisis; you're not the ones that do executive positioning."
Katie Paine, president of KD Paine & Partners, echoes this sentiment.
"What you want to gauge here is audience or customer response," she says. "What drives a member of your target audience to behave in the way that you want it to?"
A common argument made for the use of AVEs is that they are something that corporate management wants. Mark Weiner, president of Delahaye, says that in thousands of interviews with executives who fund PR programs, his team has discovered this is not the case.
"Executives consider ad values and clipping volume to be reasonable and measurable, but not meaningful," he notes. "Conversely, they consider PR's ability to drive sales to be the most meaningful, but that's difficult to do."
Weiner says executives prefer seeing key messages delivered to target media than a high ad value.
Even public detractors of the AVE model run into a problem when dealing with clients that request it. With the exception of Paine, who says she turns clients away that want AVE, all other professionals interviewed acknowledged that at the end of the day, it's about what the client wants.
Says Bartholomew, "All of us recognize that in the absence of some other way to assign a value to what is essentially output information, [AVEs are] a necessary evil."
AVEs - the pros and cons
AVEs are often a less expensive way to conduct PR measurement
AVEs put a dollar value on PR's contribution, something that is often better understood by corporate management
AVEs can be useful tools for those marketing executives deciding on how to split money between PR and advertising
AVEs only concentrate on outputs, not outcomes, thereby limiting PR to its media relations function
When done incorrectly, AVEs rely on rate-card data that is often not paid by advertisers
AVEs don't always take into account negative coverage, thereby providing an inaccurate idea of value