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How to gauge the ROI of an event

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At a time when the economy is really not looking up, budgets are being pinched and downsizing has become commonplace, seeing a quantifiable return on investment has never been more important. But how does one really calculate the ROI of an event? Are the lines really clear? How does one exactly measure the results? EE speaks to veterans from the event industry to explore their views:



“For every event that is carried out, the method of calculating ROI is different. In most of the cases it’s the client feedback that counts the most, especially in corporate events. If we are able to retain a client for future business, and judging by how smoothly the event was carried out, the number of events closed for the client, you can judge the ROI of your event” says Adnan Morbiwala, Head of Marketing and Business Development, Pegasus Events Pvt. Ltd. “If people sit through the entire course of the event, then the ROI is great. It all depends on what the consumer is looking for” says Adnan. “What do the guests or participants at meetings and events need to do, during and after the event, in order to create value for the stakeholders? The answers may well be different for different categories of participants. Some actions may be significant (e.g. buy the product) whereas others only make a small contribution to value, maybe increasing the probability of a purchase (e.g. ask for more information, share knowledge with colleagues, investigate alternative solutions, etc.). The behavioural change may involve to stop doing something, doing something differently, or taking some new actions as a result of attending the event. So it all really depends on the behavioural objectives” says Adnan. “At the end of the day it’s a very subjective topic” closes Adnan.



Avik Prabhu, Executive Director of The Showtime Group, says, “If you view calculating ROI as a simple mathematical problem then you are not really doing the topic justice. For starters, Return on Investment in an event really depends upon the nature or type of an event – whether it is product, brand or an internal conference.”



Measuring business or sales impact of any of the channels available to a company is one of the existing unsolvable mysteries that remain for most marketing managers. While many marketers tout proxy metrics to work around this, in a real world situation how does one isolate the effect on actual sales for a single channel? While there has been some progress on this issue on the digital & mobile front, for traditional one-to-many marketing channels this issue remains and will remain for the foreseeable future. For example, for a product driven event the end result is that your event should achieve an increase in sales. And if sales went up after a launch event, how do you know whether it was only because of the event and not connected to the advertising campaign which was launched at the same time?



"At the end of the day, it comes down to evaluating the marketing mix as a whole and then it becomes an art not science” says Avik.



When impact values are expressed in monetary terms and the total costs of the event are deducted, we have a profit or loss for the event. That profit or loss value as a percentage of the same costs is the ROI percentage figure. The Return is the sum of Impact values and the Investment is the total cost.



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