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.
Let’s take a deeper dive into the three specific examples in the WSJ story, ask the tough questions and discuss more valid ways to think about value attribution and ROI.
You can enjoy both questionable valuation techniques and hyperbole in this article. American Airlines stands to “make boatloads of cash” and “the airline company could gain as much as $95.9 million of exposure.” Oh, really? Let’s take a closer look.