Is AVE (advertising value equivalency) a reliable success metric?
I love watching Breakfast on TVNZ with my morning coffee. It’s a lovely mix of the latest political news and fascinating stories like the Australian surfer who takes his snake to the beach and the highly contested race for New Zealand’s best public toilet (Sam Sutton’s WC advocacy for the Okere Falls Scenic Reserve will remain forever in my memory as pure TV gold).
One story that really caught my attention was about a recent WellingtonNZ campaign, part of which ran for just 24 hours (!) in New York City. It used a giant Escape key that people could press to get more information about the advantages of moving to live and work in Wellington. On the creative side of things, that’s a great stunt. But it comes with a pretty steep price tag. The blitz installation of the button in NY cost $130,000, and the overall campaign (globally) reached $470 000.
Yes, it is a really creative approach to poaching potential Wellingtonians from the streets of New York. And it comes in a visually appealing package. But Breakfast’s Anna Burns-Francis asked the question I myself have: Do the results justify spending so much ratepayers' money?
Even before considering the results, is it setting the right goals and targeting the right people? Wellington is undoubtedly a great place to enjoy nature and work-life balance and many Americans love it. But are New Yorkers the best target, given their substantially higher average weekly wages and the significantly different lifestyle associated with living in a global megacity (see Infographic below)?
More specifically, the campaign Escape to Wellington is meant to address critical shortages in the city’s workforce. But does it? Is it reaching doctors and other in-demand professionals? And even if it is, what evidence is there they are ready to consider work-life balance in exchange for a massive pay cut? Glassdoor lists the average salary of a medical doctor in the U.S. at $1,65,347 a year (NZD 2.8 million): substantially higher than doctor salaries in the Wellington region. Why not focus on others with a better incentive to come?
There is also a bit of a missed opportunity in not highlighting that the campaign is run by the city’s economic development agency. As a result, it has left some online users wondering double-checking it is legitimate.
AVE (advertising value equivalency) of 15 million?
One of the quoted impressively sounding metrics for the campaign is its “$15 million worth of value from media coverage”, deemed to be “far more than the $2m-$3m range expected”.
The problem with both the expected and the final AVE is that both numbers are arbitrary estimates. With little to no consequence in real life.
AVE can be traced back to the measurement of mid-20th-century press relations (PR) efforts. Back then, it was a popular way to calculate a campaign’s equivalent cost of placing print and broadcast advertisements. It made sense in a world with uniform rate card prices for advertising. But especially in an online context, there are no longer such uniform rates. Just like consumers are exposed to dynamic pricing (based on a range of things, from browsing history to whether they are currently logged into their loyalty account), so are advertisers subjected to dynamic CPC and CPM pricing.
As a result, AVE ends up not only a “holdover from the print-centric era”, but its calculation (just like potential viewers/audience/circulation) can be subject to a lot of arbitrary decisions. This often leads to artificially inflated estimates with bogus calculations that defy mathematical logic (and our basic knowledge of the size of the world’s population).
AVE is still ubiquitous among practitioners because it has been around for so long. However, it has been criticised for decades by measurement experts in the industry. In fact, Global communication trade associations AMEC, IPR (Institute for Public Relations), PRSA (Public Relations Society of America), PRCA (Public Relations and Communications Association), the Global Alliance and ICCO (International Communications Consultancy Organisation) all agree that AVEs are not a valid metric. Many in the industry have rejected its use as far back as 2009.
Show me the people
Let’s paraphrase the famous “Show me the money” line. If the goal of a campaign is to bring not just tourists but skilled US migrants willing to live and work in Wellington, AVEs, video views, reach (how many people potentially saw your content), and impressions (how many times the content was shown, whether people actually clicked on it or not) are not really informative about how close you are to reaching that goal.
It is not surprising they are often called vanity metrics.
At best, metrics like these are just a proxy. People cannot decide to move to Wellington if they have never heard anything about it. So, a PR/communications campaign with a lot of views and impressions can help to bring it to people’s attention. That is important because it can then enter their so-called consideration set. In classical marketing, that is the long or short list of options you end up considering when making a decision.
The logic behind impressions is that the more you spread your message, the more likely it is that some of the people it reaches will take the desired follow-up steps.
These follow-up steps are the more meaningful thing to measure. One such metric is the number of people who have filled an expression of interest (EOI) on the Escape to Wellington website. But how many of these 2800+ people are skilled in the in-demand jobs? Also: if that is the result of 1.26 billion impressions, that would mean only 0.0002% of the impressively sounding impressions actually lead to something slightly more tangible.
Going even further: out of those who submitted EOIs, how many are taking actual steps to move to Wellington and in what timeframe? That is the real metric of interest, but it remains obscured by all the big numbers.
