A man I know was recently up in front of his Board. Along with all the divisional managers of the business, this PR guru had been asked to report on the value to the organisation of his team’s activities over the past year.
Our hero was initially a little nonplussed by the request. But, having thought it through, he went ahead and compiled an impressive dossier full of media coverage featuring the business and its brands. After a few quick pokes at a calculator he determined that the coverage had an advertising value of more than $5 million.
Five million bucks! Full of the joys of Spring, he trotted along to the meeting and presented his findings. And then his world turned bleak.
Because his Board directors weren’t born yesterday.
One wanted to know whether the advertising rates he’d used as the basis for his calculation were the published rates (which no reputable advertising agency would pay anyway) or negotiated ones. The chief bean-counter pointed out that ‘cost’ rarely equates to ‘value’ and wanted to know why our hero was basing the value of his work on the cost of placing ads. Were advertising campaigns judged a success or failure by the cost of the ads?
This was hairy, but worse was to come. His CEO pitched in to enquire to what extent this coverage had changed the way people thought about the organisation. Had it actually created customer loyalty? Had it encouraged anyone to buy their brands? How much of it had delivered the organisation’s key messages and how much of it had just been generic coverage of the company? What do you mean ‘you don’t know’?
OK – time to stop the charade. This Board meeting is a figment of my imagination. But it illustrates the fact that Advertising Value Equivalents (or AVEs) are a nonsense measure of public relations.
AVEs reduce PR to just the media dimension. And only ‘old’ media, at that!
Apart from anything else, AVEs just don’t address the value of several important areas of public relations including direct communication, crisis response, ‘grassroots’, viral or blogging campaigns, or public affairs. In other words, AVEs reduce PR to just the media dimension. And only ‘old’ media, at that!
I was privileged to hear world-renowned PR measurement and evaluation guru Prof Jim Macnamara speak at the PRINZ 2010 conference in Auckland. He effectively debunked AVEs, describing them as a measure of output if anything at all. But definitely not a measure of what really counts: outcomes. And, as he said, PR is just a cost centre until it actually delivers outcomes.
In PR terms, of course, that means reinforcing or changing perceptions, attitudes or behaviour, increasing awareness of a product or issue, and creating two-way communication and mutual understanding between an organisation and the groups or individuals important to it.
It’s these outcomes that our fictional hero should have been evaluating. Not the outputs. And they are indeed measurable. All of them.
AVEs have been distorting and misleading for a very long time. They’ve proved a remarkably resilient hang-over from the days when PR was just an added-value offering bolted onto the core service offered by advertising folk. But thankfully there’s now a global movement towards defining the effective measurement and evaluation of public relations.
That can only be good. Anything that improves the way PR is measured, and therefore enhances the credibility of what we do, has to be welcomed.
Yes, AVEs are easy to measure. Yes, they’re easy to understand. And yes, they’re a flawed and completely meaningless metric. In a world where corporate governance is increasingly under the spotlight do you really want to be staking your reputation on misleading measurements from a bygone era?