Advertising Value Equivalency, or why AVE is DOA on the Web
ABOVE: Advertising Value Equivalency is an outdated metric that refuses to die.
The "Advertising Value Equivalency" metric was controversial even in the print era, for reasons that Bruce Jeffries-Fox of Jeffries-Fox Associates explained a number of years ago in an Institute for Public Relations article (PDF format). But on the Web, AVE isn't just of questionable value--it simply doesn't work at all. Here's why:
In a newspaper or magazine, advertising is sold on the basis of total circulation, and the cost is billed by the issue (i.e., for a given point in time). If advertising in the Teatown Trumpet's Sunday travel section is billed at $100 per column inch and an article about the Widget Water Resort is six column inches long, the "Advertising Value Equivalency" of that article is $600, regardless of how many people read or ignore it.
On the Web, display advertising is typically sold on a CPM (cost per 1,000 impressions) basis. There are three huge differences between print ad billing and how advertising is paid for on the Web:
- Web CPM advertising is billed by the actual number of reader impressions (not column inches).
- Because Web articles typically remain online indefinitely, they may carry paying ads for months or even years. Just as important, "evergreen" stories that rank well in Google, Bing, or Yahoo may attract more readers long after publication than when they were first published. (On our site, we have updated articles from the 1990s that still generate thousands--in some cases, tens of thousands--of page views and advertising impressions per month.)
- Web CPMs aren't fixed: Different impressions may be sold at different rates, depending on the day or month, the time of day, the reader's location, how much the advertiser is willing to pay to get its ads served ahead of competing ads, and so on.
Because Web advertising is sold over time with dynamic pricing, it's impossible for an honest Web publisher--or a realistic PR person--to determine the "Advertising Value Equivalency" of online coverage. If you or your clients are wedded to AVE, you'll need to stick with print.
That is a very enlightened summary. Thank you.
Posted by: Meryl Pearlstein | 2010.09.08 at 03:07 AM
Hi Durant, you make a great point. AVE is a poor metric to use as a rule, but it gets even worse online. Now that the major PR associations have officially banned the use of AVEs PRSA has come up with a very interesting framework that unifies PR and Marketing both online and offline (using several metrics, of course). You can find my writeup here: http://blog.augure.com/2010/12/17/post-advertising-value-equivalent-new-pr-measurement-metrics/
and the official slides and webinar recording will be available in a few days.
Posted by: AugureRepMgmt | 2010.12.17 at 02:24 PM
Thank you so much, Durant, for such a clear, comprehensive article about such a confusing business.
Posted by: Sally Kilbridge | 2012.07.19 at 04:19 PM