Research from Professor Tom Watson of Bournemouth University in England places the emergence of AVEs to about 80 years ago. He recently published his research in Public Relations Review from where you can obtain a full copy of his paper. This is a summary of how AVEs emerged and became part of PR practice.
As soon as press agents and publicists started work, they ran into conflict with media owners and advertising agencies. Richard Tedlow’s discussion of the relationship between advertising and public relations in the 1920s and 1930s indicates factors that helped form AVEs. He says there was tension between advertisers who bought media space and the pushy press agents/publicists. The advertiser could “be absolutely certain that the message appeared therein. When he hired a publicity man to concoct a stunt, he could not be sure whether or how the papers would carry it” (Tedlow, 1979, p. 171).
Media owners really disliked press agents, whom they called “space grabbers.” These entrepreneurs were not only recruiting their journalists to better-paid jobs but coverage in their pages at one- third of the cost of advertising space. “One estimate was that if a press agent could deliver equal lineage to an advertisement at one-third the cost of paid space, advertising would end and with it newspaper revenue and reader confidence” (p. 177).
This tension between media owners and press agents was also given considerable color by Lee Trenholm, a ‘public relations counsellor’ in his Public Opinion Quarterly article, ‘Press Agents Irritate The Press’ (Trenholm, 1938). After using a broadsword of criticism of press agents and their “pufflicity”, he turned to their claims of effectiveness:
It would be salutary for us to reflect occasionally upon this proposition that the press-agent is commercially a competitor rather than professionally a collaborator of the press and to gauge our press relations accordingly. Almost any publicity prospectus or reports this theory by pretensions to deliver or to have achieved fabulous values in advertising for fees representing a small percentage of what the same space would have cost the client at usual rates (Trenholm, 1938, p. 673-674).
This shows that in the first 40 years of the 20th century in the US, that in the minds of advertisers, media owners, press agents and publicists there was a relationship that expressed value equivalence between media coverage and advertising; whether it is in the fears of the media owners or its promotion by press agents and publicists seeking business from clients.
One of the first explicit examples of AVE calculation came in a 1947 book, ‘Blueprint for Public Relations’ written by Plackard and Blackmon. They provided a concrete example from a named clippings agency about the dollar valuation of media coverage, using the advertising value equivalence method:
From the results of his publicity thus obtained in the form of newspaper cuttings, he can much more effectively measure its value.
Translated into dollars and cents value to Company X at a column-inch rate of $1.06 (an average for large and small daily papers throughout the nation), the 169,629 column inches of material published in 1 year would be worth approximately $179,806.74 if purchased as display advertising. Even eliminating 50 per cent of this amount to allow for unfavourable mentions (of which there were very few) and stories not wholly devoted to Company X, the projection would result in a value of almost $90,000 being ascribed to the editorial space (p. 295)
It is notable that this example uses a single national average metric for the calculation of AVE, which was a considerable task in the late 1940s when data collection was much more difficult than it is today. Another point to note is that no multiplier is added to the calculation.
In the UK, two years later in 1949, an article in the Institute of Public Relations’ Journal warned against the use of advertising equivalence. This showed that AVE was already well-established in its nascent PR sector. F. Murray Milne wrote that there “should be no rivalry between public relations and advertising. It was a grave mistake for the PRO to try and evaluate his work at so many column inches calculated at advertising rates” (IPR Journal, 1949, p. 4). Later in the same edition, Milne again advised against the method:
Press cuttings are never measured in column inches and assessed at advertising rates. This practice has done more to undermine public relations than any other (IPR Journal, March 1949, p. 7).
Some 68 years later, that advice is still valid although ye olde AVE is still very popular.
The full article, Advertising Value Equivalence – PR’s orphan metric, can be found at http://www.sciencedirect.com/science/article/pii/S0363811112002056