Wednesday, April 20, 2011

Monday, April 18, 2011

AVEs are a Disease – Here’s a Little Vaccine

One of the truly insidious aspects of public relations measurement is the use of advertising value equivalency (AVEs) or media value to assign financial value to public relations outputs.  It is a highly flawed, path-of-least-resistance attempt to calculate return on investment (ROI) for public relations.   To make matters worse, the practice has clearly moved into social media measurement as well.  For example, research studies that attempt to monetize the value of a Facebook Fan/Liker by attributing a CPM value from the advertising world.  Online media impact rankings also utilize equivalent paid advertising costs to assign monetary value to online news and social media.  AVE is like a disease that has infected and spread throughout the public relations industry.

In June of 2010, the PR industry came together in Barcelona to draft the Barcelona Principles, a set of seven principles of good measurement intended to provide guideposts for the industry.  The principle that has generated the most conversation is this one:

Advertising Value Equivalency (AVE) is Not the Value of Public Relations

 While many of the Measurati have been preaching against AVEs for years, there now appears to be a critical mass of outrage that may kill the practice in the coming years.  Here are four compelling reasons why I believe we must make this happen – the sooner the better.

1. AVEs Do Not  Measure Outcomes

AVEs equate an article with the appearance cost of an advertisement.  It does not speak at all to the results or impact that the article may have on a reader.  Advertisers do not judge the success of advertising on how much the insertions cost.  Imagine an advertising manager being asked by his or her boss, “How are we doing in advertising this year?”, and them replying, “Great!  We have spent $500,000 so far!  The true value of public relations or social media is not the appearance cost, but what happened as a result of the PR or social media effort – the impact it has on brand, reputation and marketing.  You will note the Barcelona Principles also call for a focus on measuring outcomes and not (just) outputs.  What happened as a result of media coverage is inherently more interesting and valuable than how much coverage was obtained.

2. AVEs Reduce Public Relations to Media Relations

You are, or become, what you measure.  AVEs do not address the impact or value of several important aspects of public relations including strategic counsel, crisis communications, grassroots efforts, viral campaigns or public affairs.  In other words, AVEs reduce PR to just the media dimension by only assigning a value in this area.  If only AVEs are used to assess PR value, the results will understate the totality of value delivered by PR.  AVEs also cannot measure the value of keeping a client with potentially negative news out of the media, yet that may be the primary objective of the PR practitioner.

3. AVEs Fly in the Face of Integrated Measurement                

Good marketing, branding and reputation campaigns have always been integrated to varying degrees.  The digitization of our lives has accelerated integration.

Advertising and PR actually work together synergistically, yet AVEs treat them as cost alternatives.  Studies have shown ads that run in a climate of positive publicity actually receive lift from the PR.  Conversely, ads run in an environment of negative publicity will likely not be successful and/or may be perceived negatively by consumers.  We have seen exposure to brand advertising increases conversion rates in social channels. Integrated campaigns and programs require integrated measurement.  AVEs don’t play well in this world.  They are analog and segregated in a digital and integrated world.

4. AVEs Provide No Diagnostic Value

Too much measurement energy is focused on score-keeping and not diagnostics.  This is one reason why single-number metrics like the Klout score and others have great appeal to many.  However, measurement is fundamentally about assessing performance against objectives with sufficient detail and granularity to determine what is working and what is not.  AVEs fail miserably in this regard.  AVE results can actually be misleading and result in false positives.  AVEs may be trending up while important metrics like message communication, share of favorable positioning and share of voice are falling.  Unfortunately, AVEs provide neither a valid single-number score nor any diagnostic value.

Some have said the Barcelona Principles are the ‘end of AVEs’.  I would agree directionally with that statement with one minor addition, Barcelona was the ‘beginning of the end of AVEs’.  Awareness of the practice and recognition of its flaws are at an all-time high in our industry.  More education and evangelism are required.  Understanding concepts like impact, tangible value, intangible value and (true) return on investment help foster much more sophisticated conversation about the total value delivered by public relations and social media.  AVEs are a disease, education and knowledge are the vaccine.  AVEs won’t die easily.  The momentum generated by the Barcelona event has provided focus and intent.  It is up to all of us to make AVEs a thing of the past.

A good read on AVE, will be comparing to similar social media struggles.

Monday, April 4, 2011

In sum

There's a group (on Twitter, but everywhere, really) that has been looking for alternatives to Johnsonville Brats given their ties to Walker and Koch Industries.

There's a Jacobson's Deli down the street, so I called the Stoughton location (first in Google search) and asked to speak with the manager. The man that answered said "that's me."

I explained that there's a group looking for an alternative, union-friendly brat vendor, and could he tell me the company's position (not his, personally) on the budget bill. He said that's a personal question, and I repeated I was asking about the company's position and maybe he could refer me to the owner? He said "I'm the owner." (Ok.)

He then told me "you're making a big mistake asking these questions."

I said "I have a right to research where I spend my money." His response was "No, you're just alienating everyone."

He then said he was union for years, but he supports a balanced budget. Didn't I?

Of course, I said, but I oppose this bill and if he supports the bill and Walker I needed to know that. He kept saying "No, you don't get to ask that. You people don't get to ask that."

I wrote up a review, and posted on the Facebook fan page on boycotts, as well as the Pledge to Spend page. I also, of course, Twittered as I went along.

I disagree with large-union efforts to intimidate businesses by telling their members to boycott (a la Union Grove story). What I support is my right as a consumer to research my spending decisions. And while this business owner had every right to ignore or refuse to answer my question, he does not have the right to tell me I don't get to ask the question or that's it's a 'mistake' to even ask.

I get to ask. We all do.

That was my point with this, and what I hoped I conveyed to the Wall Street Journal reporter when he called.

More later. I'm gonna go soak my head.

P.S. I also had an exchange with a realtor today; we're personal friends but do not agree on this bill. We disagree, but I know that and make the decision to continue the working relationship (and, of course, the personal friendship). It's not about never working with or supporting anyone with opposing viewpoints; it's about asking, learning, and making informed decisions.