Here's how it seems to work: Someone estimates the total impressions generated by the free--er, I mean earned--media coverage of a company in the news. Then, they apply some estimate of the cost per thousand (cpm) impressions that would be charged in paid media. The they add the words 'at least' and, voila', the paid media equivalency.
So What?
There are smart media and PR people who've addressed this general topic in depth (here, here, here). But the Twitter story also raises a couple of very specific questions for anyone interested in measurement, media, and the value of 'buzz':
1. If Twitter got this coverage for free, isn't that the real market value?
2. Is $6.77 cpm the new 'media equivalency unit' ($48million of value divided by 2.7million cpm units)...beyond that, what's the net present value of an impression online or off (see Marketing Themes for 2009 here)
3. Is a Twitter user worth $0.43 per month in media as part of a retention campaign? (number of unique visitors in June divided by $48million 'value').
4. Would acquiring a new Twitter user be worth $16 for each new user in media spend? ($48million in media value divided by the number of new users acquired in June).
5. Do the media companies owe Twitter $48million in 'value' for providing them with something to report (presumably the impressions Twitter stories earned were also paid for by some advertiser)?
Not to dis' the attempt to place a value on media coverage, but I think we can do better than overstating the value of media coverage or creating arbitrary monetary values for earned coverage.
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