By Michelle Hinson—There are many excellent reasons not to use Advertising Value Equivalency (often called earned media value, publicity value, AVE, etc.) as a measure of return-on-investment for public relations efforts. Heck, buy Katie Paine a glass of wine and she can wax poetic on the subject for hours.
My highfalutin friends on IPR’s Measurement Commission explain it this way:
AVE is not a proxy for measuring the return-on-investment of public relations. AVE subjugates the value of the messages delivered through public relations simply to the cost of the space and/or time occupied by advertising, not the impact or effectiveness of public relations in its broadest definition. Even more problematic is the use of AVE to represent a public relations outcome, and a meaningful measure to represent a financial return on investment. This obfuscating practice often prevents or misdirects focus from quantifying the more meaningful outcomes of public relations. The Commission recognizes that the use of AVE is a common practice because calculating AVE is inexpensive and accessible but this does not justify the practice as appropriate.
Katie Paine (before a glass of wine) explains it this way:
I just heard two respected senior Communications VP’s tell packed audiences that they report results to their CEOs by telling them how much it would have cost them to buy the column inches their outreach efforts produced. Never mind that the CEO would never have paid that much for the coverage in the first place. Never mind that a lot of the coverage didn’t say what the CEO wanted it to say, or didn’t include any of the company’s key messages or positioning. Never mind that, time and time again, studies have shown that paid media is less trusted and credible than earned media. And never mind that the industry has rejected AVEs as a measure of PR since 2009.
And why would we even want to compare ourselves to snake oil?
My panties have been in a twist for a while now: Why in the world do we use advertising, a profession more universally hated than PR (but with better television series representation – tip of my hat to Mad Men), as a gauge for our value?
Paid media is less trusted and credible than earned media. Period. So why do we want to compare our hard-earned (it’s called earned media for a reason, folks) media to something less valuable? Hint: “Because we can” is the wrong answer.
Millennials are the future, and millennials don’t like advertising.
But now I have a bigger reason for twisted panties. It seems the fact that I’m even writing about AVE means I am of a certain age. And by that I mean old.
Earlier this year, The McCarthy Group released a survey investigating the habits and attitudes of millennials. Bottom line? 84% said they do not like advertising. Millennials consider news reports, company websites, and friends on social media as trustworthy sources of information. They trust their closest friends the most, and advertising and sales people the least. This is in agreement with results of this year’s Edelman Trust Barometer, which indicates that information shared by friends and family is the most trusted source of content.
One more time: Millennials trust advertising and sales people the least. Now tell me again why you’d value PR by comparing it to advertising?
In light of this information on millennials, how should we determine our return on investment for our earned media efforts? I propose replacing AVE with BFI (Best Friend/Family Index). I’d share the equation but now it’s past my bedtime and I can’t find my wrinkle cream. ∞