Love it or loathe it, many clients instinctively try to evaluate social media in ways similar to advertising. Whether it’s because you want to justify social media on those grounds – or because you want to persuade the client why that isn’t appropriate – you need to know the lingo. This three part mini-series introduces you to the main acronyms you might come up against.
Part 2: AVE
AVE or “advertising value equivalent” is a way of attempting to turn different forms of activity into a common set of units so that decisions about the allocation of financial resources can more easily be made.
The question inherent in AVE is an easy one to ask – “what would it have cost to buy the equivalent coverage in advertising?” – but a hard one to answer. A mention in a front page newspaper story, for example, could be compared with the cost of an advert. But is the mention worth less because it’s only one sentence in a 30 sentence story? Or worth more because it is in a story (and therefore has the newspaper’s stamp of approval) rather than an advert? But is the story a negative story? And so on and on.
As a result, the PR industry had a rough rule of thumb: if the coverage appears in editorial rather than advertising, multiply its value by three (or so: different traditions, different numbers) and that is its AVE.
Even amongst traditional PR, AVE has long had its critics and is often not used. That applies all the more so for social media where the list of questions about how you attach a financial value just gets longer.
For some very specific areas of social media activity, AVE can be pressed into service, but most of the time the assumptions, estimates and numbers out of thin air required make AVE calculations less than useful. [Update: And even this is a pretty generous view of AVEs.]