AVE for measuring public relations

Posted on: October 14th, 2010

After a year-long inquiry and debate on the topic of using AVEs* to measure Public Relations ROI, the Institute of Public Relations Commission (IPR, from the USA) has concluded that there is no evidence to suggest that advertising and editorial space hold equivalent value.

Most rational people already know this but it’s good the industry has taken a firm stance.  This comes after PR practitioners at a European measurement summit in June this year agreed and released The Barcelona Declaration for Research Principles.  The first real attempt at getting us closer to an agreement on measurement and a step towards developing an industry standard.

Back home the Public Relations Institute of Australia (PRIA) has also made a small step toward developing a measurement standard.

Earlier this year I joined the PRIA’s measurement committee and submitted a framework for a measurement tool box I have been working on at Stellar*.  What will become of it I don’t know as work seems to have come to a halt, but here’s hoping it progresses further.

The release of the IPR statement came a few days after this SMH article about PR measurement which stated:

“AVEs remain the industry standard and are widely used by PR practitioners despite the Public Relations Institute of Australia criticising their use.”

There’s no denying that some PR people use the AVE model, however every year the PRIA conducts an industry benchmarking survey of its 175 registered consultancies.  Of the consultancies that responded to last year’s survey (more than half), only 31 percent use the AVE model.  So can you really say that using AVEs is the industry standard?  Or is it more accurate to say we’re without a standard and some use AVEs? Results for this year will be released in November so it will be interesting to see if this figure has shifted.

At Stellar* we say no to using AVEs but unfortunately, probably about once a year, we’re forced to provide an AVE figure.  Interestingly though, the requests usually come as a directive from overseas brand managers.

So tell us, do you use AVEs to measure?

* By definition, Advertising Value Equivalency (AVE) is the calculation of space or time used for earned media by comparing it to the cost of that same space or time if purchased as advertising.  The problem lies in attributing equal value to earned media and paid media where there is no evidence to suggest they hold equal value.

Posted by Renee Creer

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