Advertising Agency EMV

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Advertising Agency EMV

Earned Media Value (EMV) is also defined as the "monetary value of media attention a brand gets on social media." This attention can be owned (organically) or paid (purchased). Despite exhaustive research, details on the formula used by the big six advertising agencies (WPP, Omnicom, Publicis, Dentsu, Havas, and IPG) to calculate EMV were publicly unavailable.
Below is an outline of the strategies used in order to gather the formula used by the big six advertising agencies to calculate EMV as well as a deep dive into main findings.

Methodology

We began our research by checking the big six advertising agencies’ official websites (WPP, Omnicom, Publicis, Dentsu, Havas, and IPG) in order to find any information about the formula used by the big six advertising agencies to calculate EMV. In pursuit of this strategy, we checked the agencies’ annual reports, press releases, and news articles. Our readings through these pages showed that these agencies did not report any details on the formula used to calculate EMV.
As an alternative research strategy, we expanded our research to cover credible advertising websites such as Adweek, WordStream, and Adage to find the requested information. On these websites, we were able to find some general formulas used by advertising agencies to calculate EMV but nothing specific for the big six advertising agencies (WPP, Omnicom, Publicis, Dentsu, Havas, and IPG).
Next, we deep searched for the number of brands referring to credible business and news websites such as Business Wire, Reuters, and Business Insider among others in order to find any press releases, news articles, and interviews from the big six agencies’ top executives. Again, this strategy was fruitless since it did not give any data about the formula used by the big six advertising agencies to calculate EMV.
Further, we focused on searching for the requested data on industry-related websites and blogs. We checked for companies/tools that calculate EMV in order to find any tool used by the big six advertising agencies then, find the formula used by this tool. Therefore, we came across many companies/tools that calculate EMV but no data about these companies’ clients and customers.
Lastly, information about the formula used by the big six advertising agencies to calculate EMV seems to be not publicly available. Despite a lack of data, we tried to find the common EMV’s calculation methods used by an advertising agency. In order to do so, we checked credible advertising websites (such as Adweek, WordStream, and Adage) and industry-related websites and blogs.
Below is a deep dive into our findings.

Earned Media Value

According to a survey report from Nielsen, 66% of respondents trust opinions given by consumers online while 83% trust recommendations from people they know. Based on facts like this, brands started to put more efforts on media advertising (paid or owned). Therefore, companies started to use EMV (earned media value) which refers to "any type of social media exposure gained through word-of-mouth, recommendations, or conversations about the brand."
Earned Media Value (EMV) is also defined as the "monetary value of media attention a brand gets on social media." This attention can be owned (organically) or paid (purchased).

Calculating an EMV for a brand helps determine how much it would cost to get more engagement and interactions from past or new consumers with paid media.

Earned Media Value Formulas

EMV formulas take data such as engagement, impressions, and reach across the brand's social media channels in order to determine their monetary value.
However, there is no one universal formula that is accepted globally for calculating earned media value because there aren’t any reliable benchmarks to base the EMV calculations on. Here are a few different formulas to calculate EMV:
EMV = non-paid impressions X default CPM
EMV = (organic and viral impressions over last 30 days X average CPM of ads) X average customer lifetime value
Direct revenue EMV = (percentage of customer with at least one touch on social media / average number of touches) X average customer lifetime value
EMV = reached users X CPM by vertical X conversion factor

Note: CPM, customer lifetime value, and conversion factor specific for EMV calculation are found in Ayzenberg Earned Media Value Index.
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