Advertising Value Equivalency: Does It Truly Measure Value of Media Coverage?

Some people think that a cash value should be assigned to any earned publicity. Others realize it’s not a legitimate comparison.

Recently Wall Street Journal columnist Carl Bialik, The Numbers Guy, addressed the subject of advertising value equivalency AVE. This is perhaps the first example of a mainstream media publication shining a light of the controversial practice of AVEs.

The primary reason advertising value equivalents exist are because they are perceived to be a way to attribute value to programs that would otherwise be difficult to value directly. They are a path of least resistance approach to return on investment calculations, but not a valid one.

via AVEs don’t measure the value of media coverage; they sensationalize it | Articles.

There are many reasons why this assertion by Don Bartholomew over at Ragan is right (Click on the link above to read the entire post–well worth it). But  the main reason I see is a simple one:

Buying an ad doesn’t render the same credibility as earning a positive story or mention in the media.

Some may say this is naive, as getting a story on the news doesn’t necessarily mean it has merit, but it certainly is more likely to have greater weight with most consumers than a glossy ad.

Simple question: what impresses you more, an ad about a company during the local news or a positive story about that company on the local news? If you agree that a story is worth more than an ad, then a cash equivalency is a ridiculously useless concept.