Monetizing the ROI of Free News Impressions

People ask about how to measure the bang for the buck when it comes to obtaining free news coverage for organizations. Public Relations and Advertising firms need to have an answer to these questions for their clients. One consensus method for doing this has been the Advertisement Value Equivalency (AVE) model. But, in the age of social media, can this model even be used any more?... especially when it's becoming more and more condemned by editorialists and academics. Where's the research that incorporates social media into the equation?

Where the AVE model could be applied to assigning a value to traditional news impressions, is there a model that can do the equivalent when incorporating social media? Nothing made this question more poignant to me than the McCain/Obama race. McCain went traditional, where he could measure "If I put these dollars into getting this kind of news coverage, then my polls will rise about this much." It is actually very scientific and calculated. Obama, on the other hand, took what, at the time, was a huge unknown risk and focused on new and social media. No one could predict the outcome, let alone, give a specific known ROI. So what happened? Obama's coverage exploded, both in new and traditional media outlets. He really didn't care about measuring the bang for the buck ... as long as the bang was happening on its own.

This scares a lot of people ... because how can we utilize a massive tool if we cannot predict the outcomes from using it? And, the truth is, for now, we cannot predict how news coverage affects ROI. The rules have changed so much in the last two years. Simply consider Twitter and Facebook. A large number of educated people younger than 30 will go to these two outlets before anywhere else when they want to know what's going on in the world. If your story is not on these two sites, you are missing a major financial demographic.

Example: The United Breaks Guitars song that was posted on YouTube and massively proliferated on Facebook and Twitter. United Airlines could have simply given the guy his money back instead of dragging his claim out a year and then denying it. But since that's what they did, the guy wrote a song expressing his feelings and it exploded. Many using Twitter and Facebook heard about it and have watched it. United's stock dropped 10% in a couple days and there are those who attribute up to $180 million lost by United because of this song. The guy ended up having countless appearances on traditional news outlets, but it took social media to make it happen.

How in the world can a major company calculate ROI on phenomena like this? And, by extension, how in the world can PR and Ad agencies quote an ROI on Free News Impressions to their clients?