The AVE debate: Measuring the value of PR

Will this recession finally sound the death knell for the use of 'advertising value equivalent' and will other monitoring techniques take its place, asks Cathy Wallace

Once upon a time PR account executives would sit with a ruler and a bundle of newspapers, measuring the size and space of a piece of coverage. They would then use that information to measure the equivalent advertising value of that space.

The measurement of PR value has moved on since the days of literal interpretation of ‘column inches’. But the use of Advertising Value Equivalent (AVE) rem-ains reasonably commonplace. AVE refers to the cost of buying the space taken up by a particular article, had the article been an advertisement.

‘AVE figures are popular in the industry as an easy way to show how much value you can get from PR,’ says Claire O’Sullivan, director of media measurement company Metrica. ‘Often AVE figures returned are much higher than any PR budget and they make PR people look good.’ So far, so good for AVE? Not according to Alex Heeley, senior account executive at Pielle Consulting Group. ‘AVEs are nothing short of amateurish in every way. We are an industry that claims to have a high level of professionalism yet we still use outdated and inaccurate measurement techniques. A new system for PR is essential.’

The debate around AVE has raged for years. David Pippett, director of DWP Public Relations, researched the AVE debate for his PR deg-ree ten years ago. ‘It worries me that the debate rumbles on a decade later,’ he says. It is clear the PR industry is no closer to a solution. But time may be running out. Data from Metrica shows advertising value fell in 2008. In 2007, AVE per article for the average UK organisation was measured at ￡7,520 and the average monthly AVE for an organisation was ￡3.7m. In 2008 these figures fell to ￡6,358 and ￡2.2m res-pectively. ‘For the many organisations still forced to use AVE as a measure of PR success, 2008 was a very bad year as the targets set became unobtainable,’ says O’Sullivan. ‘On the plus side, this has provided the perfect example of why the PR industry should not employ AVE to measure its performance.’

THE CASE FOR...

Put simply, AVE looks fantastic. Telling a client they have secured coverage with an AVE of ￡5m makes the PR agency look good. Going back to a board of directors and saying a PR agency secured coverage with an AVE of ￡5m, on a budget of ￡5,000, makes the client look good. And being able to compare PR directly, and favourably, with advertising makes the entire industry look good. A finance director, faced with the choice of spending the firm’s marketing budget on advertising, or an alternative that will provide advertising value beyond the company’s wildest dreams and budget, will not hesitate long before opting for the latter.

‘In a tough economic climate where financial directors are often controlling MDs, providing a clear return on investment (ROI) is important,’ argues Nick Dudley-Williams, MD of PR agency The Media Foundry. Using AVE can enable PR agencies not only to beat targets, but to make them look plain silly. ‘Our client Tourism South East set us an objective of achieving ￡50,000 in terms of AVE,’ says Susie Tempest, director of travel PR company The Saltmarsh Partnership. ‘At the end of the period, we generated more than ￡13m worth of coverage, providing a ROI of more than 1,600 to one.’
AVE allows clients to explain the value of PR to people who may not be familiar with marketing and media. When justifying investment in PR activity, financial directors may not be concerned with the number of magazines, newspapers and TV programmes in which their organisation has appeared. But if the comms department can say it is achieving a significant ROI, the finance director is going to be happy. ‘Like it or not, if clients want to use AVE, you use it,’ points out Emma Cohen, MD of Skywrite. ‘Finance guys may not get marketing. They will get AVE.’

Using AVE can also offer clients certainty that their investment will pay off. Sandy Fisher, group MD of Manchester-based Tangerine PR, says clients are increasingly looking for guarantees of media coverage. ‘At one time agencies used to say to clients, we can’t tell you how much coverage you are going to get,’ she says.

‘Agencies cannot get away with that any more. Guaranteeing coverage takes the fear away for clients, when they are selling it back to their board of directors.’

￡6,358 AVE per article for an average UK organisation in 2008

THE CASE AGAINST...

The overwhelming argument against using AVE is that PR is not advertising and therefore should not be compared with it. ‘Advertising agencies do not report their success or failure in terms of PR equivalence,’ points out Metrica’s O’Sullivan.

As advertising rates fall, PR agencies that have promised grandiose AVE targets will struggle to meet them, further cementing the argument against using AVE at all.

‘We are speaking the language of advertising at precisely the time when we should be proving, empirically, that advertising is not working,’ says Robert Phillips, CEO of Edelman. ‘AVE is a lazy way of persuading marketers schooled in old ad ways that PR counts, rather than working to find new and better systems of measurement.’

AVE is often as crude a measurement as the old-school PR executive with his or her ruler measuring column inches. It does not take account of tone of coverage – would a client pay ￡1,800 for a quarter-page in GQ if the product or service had received a sound thrashing? It does not take account of who has seen the coverage. ‘A full page of good quality editorial in PC Week is not much use to a football boot manufacturer,’ says O’Sullivan. It also does not take account of the biggest broadcaster in the UK – the BBC. As advertising is not available on the BBC, how can coverage be measured in terms of AVE?

The rise of digital and social media has also placed a question mark over AVE. A mention of an organisation on Twitter or in a Facebook status update could provoke a storm of interest – but as yet it is not possible to advertise on Twitter so again, how can this be measured? In the digital age PROs cannot afford to ignore social media, but there is no comparable AVE measurement.

Debate also surrounds the actual calculation of AVE – editorial has more value than advertising as it is perceived to be impartial. Therefore some AVE calculations will include a multiplier and there is no industry standard. ‘Some people use no multiplier, others use 2.5 or three, and I have even seen some agencies use a ten, which is just ludicrous,’ says Pielle Consulting’s Heeley. The potential for an over-exaggerated AVE is enormous, meaning agencies that stick to a basic AVE without a multiplier will always appear to fall short.

41% Reduction in monthly AVE for an average UK firm from 2007 to 2008

... but what is the ALTERNATIVE?

Robert Phillips, Edelman’s CEO, says: ‘The model of the future must be able to analyse the depth, resonance, importance and influence of the conversation.’ But of course no such model currently exists. Options currently available include reach, opportunities to see (OTS) and frequency, alongside the somewhat mysterious catch-all phrase ‘PR value’.
Reach refers to the number of people exposed to coverage. OTS is similar to reach but counts multiple articles from a single publication. ‘The obvious flaw with OTS is that figures from just five or six tabloid newspapers would exceed the UK population,’ says Metrica’s O’Sullivan.

Frequency refers to the average number of times a person has seen coverage. It shows whether people have repeated exposure, and is an important measure as the effectiveness of a campaign is dependent on the number of times a person sees it.

Other measurements, including ‘PR value’ and ‘editorial value equivalent’ exist, but they are harder to define as most agencies have their own method.

Most PR agencies use a combination of measurements. Campaign case studies regularly submitted to PRWeek for publication not only include AVE or OTS, but website hits, product sales and public perceptions.

‘It has become more important to measure the effects of PR, what target audiences now think, say and do after exposure to PR, than it is to provide a financial mark of activity,’ stresses Dominic Payling, planning director at MS&L.

Gillian Cockerill, associate director EMEA technology practice at Waggener Edstrom, agrees: ‘Evaluation is about message drive and delivery and gaining a positive behavioural response. As an industry we would do well to focus client attention on these elements.’

One impartial way to demonstrate a change in perception could be an online poll of 1,000 people. However, commissioning and analysing this kind of research can be very expensive.

But the crux is that until a universally accepted system is put in place that is as easy to calculate and provides results that are as impressive as AVE, it seems the PR industry may be stuck with the tool, no matter how much it protests against it.

155m Monthly OTS generated by articles on an average UK organisation in 2008

... And WHAT DO CLIENTS THINK?

Perhaps surprisingly, clients are not universally in favour of using AVE as a measure of PR value. In fact, some major clients such as Microsoft claim they do not use it.

Other clients will use AVE as part of a wider series of measurements, which at least reduces the reliance on AVE as an overall measurement of PR value.

‘We do use AVE as one of several tools to evaluate our media coverage, because it is a simple and cost-effective benchmarking tool,’ says Louise Terry, group director of internal and external communications at L’Oréal UK. In a recession, it is the latter consideration that makes AVE so attractive.

‘Thorough measurement that evaluates content, the extent to which messages are communicated and tone is very expensive and can cost as much as the PR campaign itself,’ says Terry. The recession has had a two-pronged effect on AVE from a PR agency’s perspective. And some clients actually value it more highly now. ‘Clients have always had a keen eye on proving bang for buck,’ says Waggener Edstrom’s Cockerill. ‘As an industry it is important we answer this call now more than ever before.’

But the logical conclusion of a recession where advertising rates have fallen, is that it is now harder for PR agencies to achieve the kind of staggering AVE they were routinely hitting in a booming economic climate.

It is not all bad news though; clients do understand the limitations of AVE. ‘It is a rough measure, but does not give the detail we need in terms of positive, neutral or negative media coverage,’ says Maxine Taylor, divisional director for corporate affairs at Nationwide. ‘What it does indicate is just how hard PR can be working in comparison to advertising.’

Terry adds: ‘It is dangerous to rely on AVE too much in our desire to be accountable and demonstrate value to marketing and finance folk, in their language. It is useful as an indication of success, but it is not a comprehensive measurement tool.’

Skywrite’s Cohen says at the end of the day, how much value a client places on AVE depends on what they want from their PR campaign. ‘For some clients, if they have appeared in The Times or their mother has read about them in the morning paper, that is how they measure success.’