Traditionally, the metric used to assess return-on-investment for public relations efforts has been Advertising Value Equivalency (AVE), defined by Marketing Metrics Made Simple (MMMS) as “what your editorial coverage would cost if it were advertising space (or time).”
To calculate the AVE for one month, measure the space (column inches) occupied by a clip (for radio and television coverage, you measure time). Then multiply the column inches (time) by the ad rate for that page (time slot).
After you do the same for every clip for that month, add up the costs to get a total cost. The total cost is the cost of the ads that theoretically could have occupied the space (time) occupied by all your editorial coverage for that month.
However, MMMS explains how AVE numbers might be an inaccurate tool:
Consider that a highly positive article can be worth much more than a single advertisement in the same space. That's because readers consciously or unconsciously think of an advertisement as an instance of a company boasting about itself (and paying dearly for the privilege of doing so), and an article as an implied endorsement by a presumably objective and knowledgeable third party (the editor who approved the copy on that page). So, from this perspective, AVE underestimates the value of editorial.
...Generally speaking, advertising tends to command attention and create awareness. Publicity tends to build credibility. Normally you need both.
In an attempt to more precisely gauge a PR campaign’s influence on the decision-making steps of a consumer (awareness, knowledge, consideration, preference, action), the International Association for Measurement and Evaluation of Communication (@AmecOrg) (#Amec2012) has produced The Barcelona Declaration of Measurement Principles:
1. Importance of goal setting and measurement
2. Measuring the effect on outcomes is preferred to measuring outputs
3. The effect on business results can and should be measured where possible
4. Media measurement requires quantity and quality
5. AVEs are not the value of public relations
6. Social media can and should be measured
7. Transparency and replicability are paramount to sound measurement.
Public Relations is a broad discipline that requires multiple metrics tied to well-defined objectives. These guidelines provide many alternatives to AVEs and are intended to help practitioners identify a palette of Valid Metrics that will deliver meaningful measurement to reflect the full contribution of Public Relations.
Above are slides explaining the Barcelona Principles measurement activity and effect in each of the following PR areas:
· Brand/product marketing
· Reputation building
· Issues advocacy & support
· Employee engagement
· Investor relations
· Crisis and issues management
· Public education / not-for-profit
· Social / community engagement.
Read the presentation in full (pdf).
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