Of late, it seems that there are more debates happening around Advertising Value Equivalents (AVE) (aka Assessment by Voodoo Economics) than about the 2016 election. The latest kerfuffle started when a monitoring company hired Robert Wynne, a California PR person, to write a white paper promoting its services and the use of AVEs ( PRN, Feb 8).
The report selectively used data and misquoted research to justify the use of a metric that the profession rejected in 2009. I’ll forego mentioning the name of the company because clearly the point of the white paper was to get it more publicity, which it doesn’t deserve.
Not surprisingly, the white paper has raised the ire of virtually everyone involved in setting standards and best practices for measurement of PR. In what for the normally polite Brits was very strong language, the PRCA, ICCO and AMEC condemned the report. Many of my colleagues have urged me and others to simply stop even discussing AVE.
Like certain political candidates, AVEs simply haven’t gone away no matter how much some of us would like them to. One reason is that traditional monitoring companies don’t make money off of Google Analytics and the other new, better tools and metrics that have come along to replace them.
But the even more insidious reason is the old-line culture of CMOs is steeped in an antiquated paid-media-is-all-that-matters culture. These dinosaurs simply can’t get their heads around the fact that PR isn’t free publicity and can’t be measured by the column inch in a digital age. The good news is that the marketing and PR climate is changing, and just as with actual dinosaurs, in this new environment it will be impossible for them to survive. Here’s why:
1. Big data is demonstrating the real return of PR programs: In boardrooms across the country, data scientists and marketing analysts are being brought into the PR measurement conversation. By integrating their skills and knowledge with readily available earned media data, they are showing business impact.
As far back as 2000, Procter & Gamble, Miller Brewing Company and AT&T conducted research that isolated the contribution of PR to the marketing mix. Today, organizations of all sizes are taking similar approaches, defining exactly where PR fits in the path to purchase, and showing accurate and meaningful returns.
One example is the Atlantic City Alliance, the marketing arm of Atlantic City, N.J. It replaced AVEs with a custom media quality index that assessed media coverage based on the extent to which it contained elements that research showed would persuade people to visit the city. The quality score assessed the presence of those messages as well as desirable visuals and other persuasive elements. In the end, data analysis showed that the media index was as effective, sometimes more so, in predicting potential visitors who would go to Atlantic City than paid advertising.
2. Big numbers get bigger laughs: CMOs are increasingly skeptical of the ridiculously large impression and AVE numbers routinely reported by organizations like the one that paid for Wynne’s white paper. Once I was called in to validate the claims of a PR agency that informed its CMO that it had generated 3.4 trillion impressions for the brand. On further examination we discovered that it had attributed 850 million impressions for every Facebook post—and then used a multiplier of 3, so each and every Facebook post was credited with 2.4 million impressions...despite the fact that even Facebook admits that fewer than 3% of its content is actually read by anyone.
Another CMO asked me to comment on an agency’s report that claimed:
Potential Viewership: 26.6 trillion—a number roughly 3.5 times the population of Earth, never mind that a large percentage of Earth’s inhabitants lack electricity or TVs and even fewer cared about the event.
Unique Visitors: 7.9 billion—since there are only 7.4 billion people on the planet, they can’t possibly be unique.
Publicity Value: $72.8 million—A meaningless number since the organization wouldn’t have paid for it and worthless since the event generated almost zero economic benefit to the city that hosted it.
For years, PR could get away with bunk like this because it was seen as free advertising. But now that data scientists are taking their place at the table and making data-informed decisions on the overall marketing mix, bogus numbers and the people presenting them are getting tossed out of the boardroom.
3. They don’t find it so hot, if you ain’t got the Do Re Mi: Increasingly organizations are using Conversions from web analytics platforms like Google Analytics or Omniture as a standard metric for promotional activities. It’s a calculation that marketers and finance folks can agree on because it tells them that a person has taken a desired action that translates into a bottom line value. Correlating PR activity to conversions is an easy way to demonstrate PR’s contribution to potential revenue. The best you can do with AVEs is show how much you would have had to spend to get the exposure, disregarding that the actual values are widely assumed to be inflated. Given a choice, most businesspeople would prefer tracking revenue generation and cost effectiveness over hypotheticals.
4. There are better alternatives: What the Barcelona Principles encourage, and what forward-thinking companies are doing, is aligning PR metrics with business goals. I have yet to hear a CEO tell me that his or her business goal is to get lots of column inches—which is all that AVE is measuring—especially in a digital era when space is essentially unlimited. Most organizations define business goals for PR along the lines of “increased awareness, consideration or preference” or “generating qualified leads” or “improving our reputation.”
With the arrival of less-expensive (or even free) tools for survey research, like Survata and Survey Monkey, it’s much easier to set up A/B and Pre/Post tests of PR’s influence on messaging and perceptions.
Conversions make it easier to track leads and impact, and CRM systems make it possible to follow those leads that PR generates all the way through to a sale. So today, when management insists PR put dollar figures into its metrics, you can focus on cost efficiency instead of AVE.
Numerous PR organizations are demonstrating that their programs have a lower cost-per-message-communicated (CPMC) than other promotional efforts. I’ve written about calculating this.
We’re probably stuck with AVEs for a while longer, but when the smartest people in the room are relying on good data, the fans of voodoo economics soon will be forced into early retirement.
CONTACT: @queenofmetrics firstname.lastname@example.org