The practice of Advertising Value Equivalency (AVE) measurement has been widely used in Malaysia since the early ‘90s, especially by Corporate Communication practitioners, as a way to measure the effectiveness of media coverage created by Public Relations (PR) activity. This practice is also utilised for Marketing Communication (MarComm) activity as they believe it delivers Return on Investment (ROI) and addresses the incessant demand by their Financial Department heads to justify spending on PR and MarComm activities.
Allow me to share with you how it works. Print AVE is calculated by measuring the column cm./inches of news coverage in a newspaper or publication and multiplying the publication’s Advertising rate per column cm./inch to present a money figure. A column cm./in. is the number of columns taken up by an article multiplied by the number of cm./ins. of news story, including its headline and photograph/s.
Broadcast AVE – television or radio, is calculated by measuring the number of seconds of news coverage – air-time, and multiplying by the Advertising rate per second of air-time to present a money figure. An example is when a TV news story on a new biotechnology discovery might run for 1 minute 30 seconds. The Advertising rate from that TV station is listed on its rate card as RM40,000 for 60 seconds and RM20,000 for 30 seconds, totalling RM60,000 for one and a half minutes’ coverage. The AVE for the news coverage is therefore RM60,000.00.
By accumulating the AVEs for all the news coverage in a marketing or PR campaign, a total figure is obtained. This total figure is compared with the cost of actual Advertising in a campaign to demonstrate its apparent PR effectiveness. Publicity or PR activities have been ‘compared’ with Advertising to measure their effectiveness in this manner. As such, we hear statements that, “Our media coverage in the past month was worth RM1.26 million!” (Sounds familiar?)
I am of the opinion that news coverage generated by publicity cannot be directly compared with Advertising, as they are two different disciplines. Advertisements are advertiser-generated, controlled messages presented repeatedly over days and months for maximum impact. Conversely, news stories are uncontrolled messages and do not carry the same standardised material. A news story is as old as the daily news.
People have the tendency to believe a news story written by a reporter as it is third-party endorsement of your company or product message, therefore trusted. Advertising is bought space, so your controlled message has no third-party endorsement. AVE is therefore misleading since it only measures the size of the news-clipping without assessing the quality or value of the news article. As such, international PR organisations have denounced AVE as an invalid measure of PR effectiveness.
My advice to 21st century PR practitioners: