Next Previous

AVE Formula: 5 Watch Outs to Check Today

Liam Kelly 25 February, 2016

5 Watch Outs for AVEs

The Ultimate Guide to Ad Value Equivalent

hello@prmeasured.com

The AVE Formula

Advertising Value Equivalent, or AVE, is a dollar metric that defines the cost of editorial content based on advertising rates. It has been discredited, but is still widely used. The AVE formula is:

hello@prmeasured.com

It might seem like a pretty easy calculation, but there are variables and AVE varies from supplier to supplier and market to market. Here are the five watch-outs when calculating AVEs. Ask your suppliers how they are calculating AVE today.

Size x Ad Rate = AVE

1. What size is being used?

Size makes up half of the AVE equation and there are many different ways that suppliers will determine size for the calculation. Don't forget that images may or may not be included in the total size being used.

hello@prmeasured.com

Whole Piece

Org Mention

Word Count

Image

2. What ad rate is being applied?

The other half of the equation - here, too, the base number will vary widely. Be sure to check online rates. PRs using AVEs will need to justify the number to management, so be wary of an ad rate defined by the supplier as it is probably not based on researched numbers.

hello@prmeasured.com

Whole Piece

SCC / SCI

Online?

Supplier $

3. Is there a multiplier?

Sometimes the AVE is multiplied by a number to show that editorial is "more valuable" than advertising. There is no research that shows a multiplier should be added, or what number should be used. Avoid accusations of falsely inflating metrics by not using multipliers.

hello@prmeasured.com

11.3

4. How is tone being handled?

The old adage all publicity is good publicity has been proven wrong, sadly. How is the tone of coverage impacting on the AVE? Is negative coverage being included? What about balanced or neutral?

hello@prmeasured.com

Negative

Balanced

Neutral

Positive

5. Do AVEs show the value of PR?

The AVE might be the only number that management will recall from PR. So, a serious question for PRs: do AVEs reflect the value that communications brings to the organisation? Does the calculation below make sense?

hello@prmeasured.com

Influencer & Consumer Engagement

AVE?

Content Creation / Message / Call to Action

Reputation Management

Need an Alternative to AVEs?

If AVEs are not defining PR’s contribution to the organisation, try aligning communication objectives with the organisation’s goals. All PR clients that I have helped on this, found that leaders better understand the benefits of PR when shown how it helps to achieve their goals.

hello@prmeasured.com

Ask any measurement question

Measurement suppliers are still providing ad values and clients are using them, check out our guide to using and applying the AVE formula. Advertising Value Equivalents (or AVEs) has been a hot topic in PR measurement lately (read our summary). While many are angry with Meltwater for raising the topic, it does seem that we might be missing the point – PR professionals are obviously still using AVEs to prove the value of their work. In 2010, I was one of the 150 delegates agreeing the Barcelona Principles and believe that they provide the best possible framework for measuring the value that PR brings to an organisation. The guide will help PRs understand the underlyng elements of the AVE formula, and catch any issues.