Measurement

Advertising value equivalency

AVE · advertising value equivalent · equivalent advertising value

Definition

Advertising value equivalency is a dollar figure made by taking the space or time a piece of coverage occupied and pricing it as if that space had been bought as advertising. Some shops then multiply the number by two or three “for the value of the endorsement.” AMEC, PRSA, PRCA, ICCO, the Institute for Public Relations, and the Global Alliance treat the metric as invalid. Barcelona Principle 5 has said, through several revisions, that AVEs are not the value of communication.

The arithmetic looks tidy. A half-page trade story is “worth” the rate card for a half-page ad. A 40-second TV mention is “worth” 40 seconds of spot time. The tidy part is the problem. Rate cards are list prices nobody pays. Editorial is not an ad: the outlet chose the words, the tone can be mixed, and the audience came for news. Cost is not value. Advertising itself is not valued by what it cost to run.

How it is measured

AVE = (column inches or seconds × published ad rate) × optional multiplier. There is no agreed rate source, no agreed multiplier, and no rule for negative or neutral stories. Two vendors can price the same clip an order of magnitude apart.

Example: a regional paper runs 12 column inches on a hospital’s new wing. The paper’s published rate is $180 per inch. A vendor reports $2,160, then $6,480 after a 3× “PR multiplier.” The story also notes delayed opening and a lawsuit. The clip report still shows $6,480 of “value.” A board that compares that number to a $40,000 advertising buy thinks comms returned a bargain. Nothing in the formula asked whether staff applications rose, whether patients booked, or whether the lawsuit paragraph did damage.

How it differs

Earned media value and “PR value” are the same idea under other names. Referral traffic, branded search, share of voice, citation share, and outcome studies (awareness, consideration, fundraising) are attempts to measure what the coverage did. Barcelona Principles ask for outputs, outcomes, and impact, qualitative and quantitative. AVE is an output priced as if it were an insertion order.

Common errors

Putting AVE on a slide next to “ROI.” Multiplying hostile coverage. Comparing broadcast AVE to digital AVE as if rate cards were one market. Using AVE because a client “needs a number” instead of picking an outcome the program was funded to move.

Sources