Measuring return on investment appears to be a daunting task, so many companies do not know where to begin. The good news is that even the simplest measurement can go a long way to creating a more effective event. In the long run, providing metrics will help prove to investors and CEOs that the event as a marketing tactic is key to the future success of their business. The first and most important step in this process is to realize that the time to begin measuring is now.
"No matter how insignificant your budgets or your resources are, find a way to start measuring," said Ian McGonnigal, senior director of services worldwide at George P. Johnson Co., which specializes in experiential marketing. "I like to say that if someone hasn't come for your results yet, they will be [coming]. It's not a question of if, it's when. You will be held accountable for your results, [especially] in this new environment where everything is measurable. More and more we're finding through our own surveys people are looking to their marketing tactics to prove ROI."
McGonnigal and his company realized this when it teamed with IBM Corp. to build a system for measuring ROI. After nearly five years of planning, Steve Waugh, head of global events at IBM, said he believes they have finally worked the kinks out of the system.
"We do about 5,000 events per year," Waugh said. "[We were going to] trade shows like PC Expo, we were spending millions of dollars and we just didn't know if we were getting anything out of it. We learned a lot; and I remember having the results of postevents in my hand, and going to a financial stakeholder and saying: `This does not make sense to invest in anymore.' That's when we started to change the conversation. We were spending so much money and just assumed that going to [an event like] PC Expo was a good thing."
After the system was finalized, Waugh recognized there was no need to make assumptions about what was working and what wasn't—he had solid numbers to give them those answers. "The game changed," Waugh said.
According to McGonnigal: "Regardless of what companies you work for, the game is changing. It's important to understand that [your measurement system] needs to be flexible and it needs to adapt."
So how did they do it? The key was to design a system that was specific to IBM. Every company must consider "external influencers that will make it difficult," McGonnigal said. "There are internal [influencers] as well—what kind of company you have, what products you sell, your systemic infrastructure. All of these things are going to impact what metrics [you choose]. There are some generalizations: Measurements should be based on your objective; any company can apply that. The purpose is to understand if you're successful or not. Measure significant things, and make sure your measurement is used for change."
Waugh admitted that while the idea of change can be difficult, it is necessary. For this reason, some marketers are reluctant to confront results. "When you go into measurement, it brings about whether your event was effective. It can buck conventional wisdom. Sometimes people are happier not knowing."
McGonnigal said IBM made major changes to its events program once measurements were in place. "We canceled 20% of our campaigns worldwide when they didn't show results," he said. "The 20% was low-hanging fruit, but it made a huge statement," Waugh said.
So what specifically can a company do to put together a system of measurement? Companies that have been successful with measuring ROI advise that you set your goals ahead of time and make sure every aspect of your event is geared toward accomplishing those goals.
Carrie Freeman Parsons, VP-marketing at Freeman, a com-pany that manages and produces events, said, "For a typical trade show, what we have seen customers do is consider all the constituencies that are involved in an event. You might have the opportunity to recruit new people. You might have the marketing view of brand enhancement; you may have the sales view of closed deals, the executive view of how much press do you want, how many meetings with high-end customers do you want. All those discussions have to be agreed upon in advance. At the end of the day, all of that strategy is what will drive the tactics that you execute down the road. Documenting how each of these groups [meets the agreed-upon goals] would measure success."
Waugh said IBM's success has also resulted from breaking the event into parts. "For tactic efficacy, we will look at it individually and measure things like how do we get the list of attendees, how many people did we invite, how many responded and how many came. Depending on the event type, which sessions did they go to? [We look at] the tactic-specific measurement. [Then we look at] awareness—did we impact people's impressions of IBM?"
The best way to determine how people feel about an event is to ask. Dax Callner, VP-communications strategist at experiential marketing agency Jack Morton Worldwide, said "Advocacy levels [are] based on one single survey question: `[From 1 to 10], how likely are you to recommend us to a friend or colleague?' Based on the scores, we can measure changes in advocacy levels as a result of our activities. It's been tied to actual action."
Measuring the quantity and quality of leads generated during an event, Callner said, can help determine ROI. "We do a hot/medium/ cold evaluation. Based on formulas, we can predict incremental revenue of our time. If out of 10,000 [leads], 500 are hot leads, and we know that hot leads are equal to $1,000 of revenue, then we can predict how much we are going to make."
Callner and his team make sure to survey as many event attendees as they can. "We ask a number of questions," he said. "We monitor their behavior onsite [using RFID swipe cards]—how they are participating—and based on that data we come up with some kind of analysis that says we delivered the right level of experience. ...We want to make sure that it maps back to the brand."
Finally, McGonnigal said the most important aspect to take into consideration is the cost of measurement. Determining ROI, he said, "takes time, resources and money. All these things need to be understood." Do not, he added, spend more on measuring your results then you do on the event itself.
If a company can take away one thing from this ROI call to arms it's if you're looking at ROI not just as a dollar amount, then it's certainly measurable, Parsons said. "You can quantify whether or not you accomplish your goals."