Stories like this one in PR News are why discredited metrics like Ad Value Equivalents (AVE) still exist. It’s bad enough when vendors make money by providing easy access to bad metrics like AVE. It’s ten times worse when they are quoted by “experts” and touted in respected industry publications.
I’m not much of a football fan, but have been intrigued by the publicity surrounding the University of Colorado, Boulder’s new football coach, Deion Sanders. He seems to be a natural marketer who has an intuitive understanding of what works and doesn’t work. So I was intrigued enough to click on the headline and started to read. I got no further than the third paragraph:
“With 68,536 mentions in the media over the December-September period, Colorado has generated an estimated $375 million in advertising value, meaning CU has received about $280 million in ROI in less than a season. (Source Cision)
I double checked the numbers and came across a USA Today piece which quoted Annie Scranton, founder of Pace Public Relations in New York saying “Make no mistake – I’the university has 100% gotten its return on investment in terms of earned media value…. A traditional way to measure the value of earned media is to compare it to correlated ad space. It’s not even close. Given how often, and how many media outlets are talking about Deion, I definitely think that in five years time, the equivalent of earned media value is $1 billion or more.”
$1 billion in value, that’s quite the return on investment. If there was any validity at all to Ms. Scranton’s claim.
As always, measurement atrocities like these provide a great opportunity to point out the many fallacies of equating mentions in the media with ROI. There are 21 other reasons you can find in here: The Definitive Guide: Why AVEs Are Invalid, including 22 Reasons to Say No to AVEs. But here are a few salient facts:
1.6. According to Investopedia, the definition of “ROI,” is: a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
At the moment the total investment and the total return are unknown, given that Sanders salary is spread out over 5 years.
2. There is no evidence that a story in a media outlet has the same impact on purchase behavior as an ad in the same outlet. The fundamental flaw behind the AVE myth is that an ad and an earned media post have the same impact on the consumer. There is no evidence of this although may academic studies have been tried to prove or disprove the connection.
3. The calculation is based on 68,736 mentions, not necessarily articles. If UC or Sanders is mentioned 20 times in an article, it’s still only one article. AVE is based on guestimates of the size of an article.
4. You have no idea how many of those “mentions” were seen by people in UC’s target audience. Chances are good that the majority of those purported “eyeballs” belong to people who have no interest in UC or football and would never have bought a ticket to a UC football game.
5. Not all those “mentions” would necessarily leave the reader more likely to support or buy tickets to a UC game. In fact, many discussed how likely it was that Sanders would fail or that CU would not play well.
6. The $375 million “return” is no doubt based on estimated standard ad rates, not what advertisers actually pay.
7. There are so many better ways to prove your value that are actually time-tested, accurate and statistically valid. You can read all about them here:
- How to Spurn the Siren Call of the AVE Succubus
- Breaking Bad Measurement: 2 Ways to Kick the AVE Habit
- Addicted to AVE? Here Are 5 Time-Tested Alternatives
- How to Adapt When Your Agency or Vendor Refuses to Provide AVEs — And They Will
That’s why we name Annie Scranton of Pace Public Relations in New York and José Suárez, Global Director of Accounts & Strategy at global communications agency XWECAN, our official Measurement Menaces of the Month.