I just came across my Bachelor thesis from 2014 on “Measuring Return on Investment (ROI) of Hosted Buyer Programs for Exhibitors” and thought that would be a shame not to share some of the findings here, focusing on how to measure event ROI.
How to measure event ROI
The financial ROI measurement for events can be calculated in two steps (Event ROI Institute at the Square Meal Venue and Events Show, 2014):
Event ROI Institute at the Square Meal Venue and Events Show, 2014
ROI is presented as a percentage, being positive, negative or break even (or 0 – indicating that the gross margin is equal to marketing investment). From literature, Lenskold* presents three key principles for ROI which are essential to understand to guide marketing investments and strategies:
- Measures should be aligned with decisions: That refers to instances where multiple campaigns are interrelated and there are interdependencies between the different campaigns.
- Financial values are necessary for all returns: Company objectives are related to profit and every investment in marketing is intended to generate sales leads.
- Performance metrics should be used to estimate financial value but cannot be converted to financial value: That is the initial performance metrics which can be translated into future sales. This can help to estimate financials and be used in the decision making process.
According to O’Toole and Mikolaitis** corporations regard events as a communication channel to communicate their corporate message and initiatives, generate leads, educate employees, reinforce behaviour and introduce new products. The corporation expects an ROI on these activities and has different ways to view them.
Each time company is involved in a business activity, such as an exhibition, they should evaluate thier opportunity cost – the missed business opportunity of the company while attending the event. In return, the company will consider the goodwill of the contacts gained at the exhibition against missed business opportunity.
But event ROI shouldn’t be measured only on financial basis. According to Kevin Jackson, many things that are done in the event space are not about the cash and that the ROI if much bigger than that. There are several ways to increase the ROI on event spend. Their definition does not include financial metrics but focuses on audience engagement and brand loyalty. The tips and trends for increasing ROI on event spend include:
- See the audience as new, not having previous information about them.
- Plan event strategy in detail.
- Identify the Key Performance Indicators (KPIs) and be clear that they are tight to measure.
- Create a lasting event experience.
- Extend the event to social platforms to engage audience that doesn’t attend.
- Be patient to achieve results, it takes time.
- Marketing campaigns can be executed on smaller budgets while at the same time reaching out to large audience.
- Involve everyone in the plan.
- Compare results over the years.
To demonstrate the statement, Kevin Jackson brought the example of Secret Cinema and their partnership with Warner Bros on their new film releases. The audience was small but the amount of buzz they generate on social media increased ticket sales.
Haigh (Event ROI Institute) gave a talk on event ROI at the Square Meal Venue & Events 2014 exhibition. He emphasised that nowadays the job description of event planners is shifting from merely logistical to strategic planning and customers expect that event organisers will be able to achieve customer’s objectives effectively. On the other hand, only 5% of events get measured. This is because of two reasons, firstly not all events have to be measured in first-place and secondly, measuring events require resources such as for data analysis and HR.
When setting up event objectives, event organisers have to answer the following questions: Who is attending the events? What do you want to accomplish? And do you want the attendees to do something differently? If you want your attendees to do something differently, you have to ask yourself why the attendees are not doing it already.
In addition to that, Haigh discussed that event organisers have to create value by asking two questions: why are you holding this event? And what are your objectives? Asking what event objectives are will help to put content input. Examples of objectives include satisfaction and reaction objectives, learning objectives, impact objectives and application objectives.
To demonstrate his argument, he concluded with the ROI pyramid, showcasing the process of how event organisers shall measure their ROI.
*Lenskold, J., D., 2003. Marketing ROI: The Path to Campaign, Customer, and Corporate Profitability. New Your: McGraw-Hill
**O’Toole, W., Mikolaitis, P., 2002. Coporate Event Project Management. New York: John Wiley & Sons