How to Calculate Advertising Value

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A business has control over its advertising but can't dictate whether a news story will be negative or positive.
A business has control over its advertising but can't dictate whether a news story will be negative or positive. (Image: udra/iStock/Getty Images)

Calculate the advertising value of a news story by measuring the amount of coverage -- in inches for print publications and seconds or minutes for radio or television broadcasts -- and multiplying that count by the advertising rate. For example, if you received 30 seconds of coverage during a radio interview and that station’s advertising rate for a 30-second spot is $500, your advertising value equivalency (AVE) is $500. AVE measurement does not indicate effectiveness or profitability; it is simply a measurement of value.

Drawbacks of AVE

The Institute for Public Relations, an international industry trade group, joins others in the PR industry in opposing the use of AVE as an acceptable attempt to equate news coverage with advertising. If coverage of a client is negative, IPR reasons, its value cannot be comparable to a paid ad in which the message is controlled and favorable. Likewise, when the client is mentioned in a large article with several of its competitors, the reader may not remember a single mention of a client in an article that contains several names. Yet some PR pros suggest a news story is more credible than paid advertising and is “worth” more to the client; likewise, a news story may be placed where is no ad equivalent, such as on the front page of a national newspaper.

Support for Advertising Equivalency

Drawbacks notwithstanding, calculating ad equivalency can indicate the reach, or audience size, of a news story. Publications with high circulation typically charge more for ad rates; if a story appears in a major publication, you have a verifiable indication that it reached more people than a smaller counterpart with fewer readers and is thus worth more. Some PR professionals add a multiplier to the calculation based on how prominently the client is mentioned or to account for the perceived credibility of news versus advertising. There is no science to this weighted method; many times it is a judgment of the PR agency or professional.

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