By Roberta Marcroft, Account Director

One thing never changes when organisations undertake public relations activities – an anticipated return on investment.

Decades ago valuing this investment often meant calculating the advertising value equivalent of media coverage – also known as the AVE. In fact, some companies (clients and practitioners) still evaluate PR activities this way.

AVEs involves measuring the space or time that coverage has filled, applying the advertising rates for that same or similar measure, then usually multiplying this value by a nominal figure to denote the added value of editorial.

There are a number of issues with the AVE methodology.

For starters AVEs focus purely on ‘space/time’ and don’t measure the actual outcome of results – for example a change in government policy, or increasingly, community engagement, brand loyalty, viral impact etc via social media.

Unfortunately AVEs make little sense. For example, if you have a story on ABC news, even if you made some assumptions about the ‘cost’ of TV time, one of the very first problems is that you can’t actually advertise on the ABC. How can you value that time?

Measuring AVEs also doesn’t take into account the value in terms of achieving a specific organisational goal.

AVEs also treat negative, neutral or articles containing competitor views exactly the same as positive articles. Space is space.

They fail to account for the lack of control PR has over the physical placement of content compared to advertising where the message is controlled and the location is paid for and therefore guaranteed.

Today, because of these and many other shortcomings, the communications industry has largely abandoned the use of AVEs as a useful, accurate or logical way to measure public relations results

The reality is that public relations has long been about delivering many communications outcomes, not just media coverage. These include employee engagement, ambient sales support, issues management, input into government policy and attracting talent.

In a recent blog, industry commentator Michael Ziviani recounts The Barcelona Principles, which state ‘Advertising Value Equivalents (AVEs) do not measure the value of public relations and do not inform future activity; they measure the cost of media space and are rejected as a concept to value public relations.’

Best practice
The movement to identify and agree on a best practice methodology for measuring and evaluating PR is an international one. It is being addressed by organisations such as the International Communications Consultancy Organisation, Institute for Public Relations and the International Association on Measurement and Evaluation of Communication (AMEC) that have proposed standards for traditional and social media measurement and evaluation. Locally, the Public Relations Institute of Australia (PRIA) has also been educating members and industry practitioners on the evolving international standards.

In 2010, a confederation of many of the public relations professional membership organisations around the world finalised several years of consultation and research by releasing the Barcelona Principles.

This is widely regarded as the blueprint for measurement and evaluation in the PR sector.

Education and training programs through national public relations organisations have been assisting PR practitioners to understand and adopt these principles.

There’s no expectation that all companies will or can comply with the principles immediately but the general view is these will be adopted over the medium term and AVEs will phase out altogether. Today, most consultancies would at least raise the issue with clients asking for AVE-led measurement and explain some of the shortcomings with them, as well as explaining some alternate ways to provide more actionable and meaningful evaluation.

To read the Barcelona Principles click here.

For more Australian resources about the changing nature of measurement in public relations, visit the PRIA website.