Return OnWhat?

Posted on by Chief Marketer Staff

The excitement and buzz surrounding event marketing has forgiven many of its shortcomings — specifically where it misses one of promotions’ greatest strengths: quantifiability.

“We have clients who are very bullish on event marketing, and who are eager to make a lot of noise and create excitement,” says Brad Bryan, president, U.S. Concepts. “Measurement is just not as high a priority for them as it may be for others.”

When U.S. Concepts does gather dataon the events it stages, it is keyed to client and retailer priorities. “Wal-Mart, for example, is very sales-volume driven. For its management, ROI equals sales,” Bryan says. Transactional data extracted from events held on its premises can be a powerful motivator for the mega-store. As a result of sales from the Coty/Rimmel bus tour staged by USC last year, Wal-Mart has now given Rimmel more shelf facings and in-store visibility that it never had before. (The Rimmel Bus Tour is due to repeat in 2004 in Wal-Mart parking lots across the USA).

USC’s approach is typical of most event marketers: it measures sales volume in the weeks after the event, it conducts direct questioning as attendees are leaving the event, and in many cases, it does an e-mail follow-up in the succeeding weeks.

Most event marketing agencies will go farther if the client can be persuaded to. “Measurement is high on everyone’s agenda right now,” says Michael Westcott, VP Marketing, George P. Johnson, Detroit, MI. Westcott advises clients to use at least seven ways to measure their event marketing: track lead quality and quantity; calculate total audience size and the quality of impressions; assess the overall effectiveness of the brand message; gather competitive intelligence (from a trade show floor, for example); gain a better understanding of audience behavior; find specific sales opportunities at the event where an incentive is given; and the evaluate impact on public relations. “Marketers and the agencies that support them should build in programs that measure as many of these parameters as possible,” Westcott says.

And why? Because it will lead to more effective event marketing and more of it. In recent research by GPJ, 33% of respondents reported they want to do more events, while of those already measuring impact, a full 51% plan to do more events. “Those marketers already understand the value of event marketing, and will therefore do more,” he says.

Like Bryan, Westcott has learned that different clients have different measurement priorities. In the high-tech sector, he says, sales opportunities are the most important measure. For consumer brands, impressions tend to be more relevant.

And then there are clients who can’t get enough data on any of these querstions. For them, event marketing specialists have tried to push innovation. For example, this past year, AMP developed its Brand Ambassador Tracking System (BATS). The Web-based reporting tool “let’s us make better decisions for our clients through real-time access to information,” explains Myles Kleeger, VP AMP Designs, a division of Alloy based in New York City.

BATS captures estimated tour attendance figures and demographics on the crowd, as well as the numbers of samples, premiums and coupons distributed. It allows field staff to transmit consumer quotes, photos and event highlights back to the agency. AMP edits the data, then releases it to a secure Web site where the client can review. Depending on the retailer involved and the client’s needs, BATS can add a transaction data link with sell-through and coupon-redemption data, uploadable daily.

New paradigm: ROE

But for all the data being generated and crunched, are any of these lines of inquiry on the right track?

While she’s cautious to phrase her opinion diplomatically, Pam Batalis doesn’t think so. “Transaction data is a statistically valid answer to a meaningless question,” she says.

Batalis is VP-business development for Brand Keys Inc., a New York City-based research and brand consultancy. She is also the co-chair of the Promotion Marketing Association’s new ROI Sub-Committee (John Palumbo, president of DVCX, New York City, is her co-chair.)

“More than ad spend, more than direct mail, events touch the consumer and impact the brand — but brands have not helped themselves by accurately measuring the impact of them,” Batalis says.

Batalis went to the Promotion Marketing Association and its Event Marketing Council last year with a proposal that more study be done on measurement standards.

She found a receptive audience. “The new PMA ROI Sub-Committee wants to raise the caliber of measurement by challenging metrics that have gone before — not discard them. But the same old-same old won’t cut it,” Batalis says. Instead, metrics have to be that will quantifiably assess all aspects of an integrated campaign.

“ROI [return-on-investment] has become a worn-out phrase. We’re beginning to encourage people to think about ROE: return-on-equity. We want people to ask how their promotions and events drive brand equity,” she explains. That process begins by documenting and quantifying the equity increase resulting from a promotional effort.

As Batalis outlines it, the switch to equity measurement goes far beyond the transaction data that has traditionally been tallied and scoured to measure the success of an event promotion. Under that model, the numbers of widgets moved at a county fair was the indicator of long-term loyalty or a tendency to buy widgets in the future. The problem is, it’s not, she says.

But clients, and therefore their agencies, have a hard time letting go of the traditional metrics. Batalis says the PMA ROE Sub-Committee is trying to respect the “metric needs” of all of its constituents as it brings together a standard for industry best practices.

Supporting her position, Batalis uses case studies of certain brands that she says have bought the ROE gospel: KeySpan (an energy utility in the competitive Northeast market), Avis (which does not compete on price, but keeps growing its profit), and Cendant Car rental (which eschews loyalty programs).

These brands hit the wall about five years ago or more, and then switched over to a ROE marketing standard. “They learned that they could not build their brands on the basis of price,” Batalis says.

Nowadays, more brands are hitting that same wall, and crumbling under price pressure. Brand extensions fail more often as compared to five years ago, because the same strategic measures and decision-making practices are being applied, she argues.

Complex consumers

Adding to the pressure, during this same period, consumers have changed, and become more complex. Communication access points have proliferated. There has been a splintering of media, and an overall increase in the volume of marketing messages assailing the average American.

As consumer complexity has increased exponentially, so the evolution of consumer attitudes has become more complex in response. Brands need to understand the role of factors other than price that inform consumer values and impact their purchasing decisions.

“Again, this is about return-on-equity — not return-on-sampling or return-on-couponing,” Batalis says. “If you enhance your brand equity, you then enhance loyalty, which in turn enhances profitability. And which brand manager, or CEO, doesn’t want enhanced profits.”

While the ROE model has substantial support among event marketing agencies, even those agency execs serving on the PMA’s ROI Sub-Committee are realistic about the alacrity with which brands may adopt the mind-set. “We may be some time away from the adoption of the ROE model because of the expense involved. The exception may be perhaps for the largest events,” Westcott says. “Until there is a research product or evaluation tool that makes ROE more affordable, brand marketers will go slow.” He notes that there is also a behavioral and education challenge that must be met by agencies before their brand management clients will realize the value of the ROE model and adopt it.

Laura Shuler, executive VP for event agency Jack Morton in New York City, has explored the ROE model with Batalis, and she endorses it. But Shuler also agrees that the expense of implementation will mean adoption will be gradual.

And Bryan echoes the hesitancy. “The return-on-equity approach makes a lot of sense, but not every client needs that much validation to run an event,” he says.

Batalis recognizes that spending is the stumbling block to wider acceptance of the ROE model. More sophisticated questioning and analysis, both before and after the consumer has the experience, will cost more but also yield more, she says. “Spend wisely to build brand equity, and you’ll be right more often,” she says.

Evolution by necessity

Product sales data and yes-no exit quizzes on future intent to buy are the old-school measures of event success. According to Pam Batalis, VP, business development, Brand Keys Inc., marketers should consider investing in new methods of evaluating a consumer’s response to an event. “Rethink the line of questioning and the statistical analysis of those responses. Direct Q&A will not tell you what you need to know,” she advises. In addition, she suggests: Don’t rely solely on direct or indirect data — effective analysis emerges only from the appropriate mix of both. Find out what consumers really think vs. what they say they think. Use weighting algorithms, factor and statistical regression analysis. Use queries based on clinical psychology models to unearth emotional and logical consumer responses. Assess the value trade-offs.

Brands that get it…or not

EQUITY-ORIENTED PRICE-DRIVEN
KeySpan (utility) K-Mart (retailer)
Avis (car rental) McDonald’s (QSR)
Cendant (car rental) Burger King (QSR)
Target (retailer)

Return OnWhat?

Posted on by Chief Marketer Staff

The excitement and buzz surrounding event marketing has forgiven many of its shortcomings — specifically where it misses one of promotions’ greatest strengths: quantifiability.

“We have clients who are very bullish on event marketing, and who are eager to make a lot of noise and create excitement,” says Brad Bryan, president, U.S. Concepts. “Measurement is just not as high a priority for them as it may be for others.”

When U.S. Concepts does gather dataon the events it stages, it is keyed to client and retailer priorities. “Wal-Mart, for example, is very sales-volume driven. For its management, ROI equals sales,” Bryan says. Transactional data extracted from events held on its premises can be a powerful motivator for the mega-store. As a result of sales from the Coty/Rimmel bus tour staged by USC last year, Wal-Mart has now given Rimmel more shelf facings and in-store visibility that it never had before. (The Rimmel Bus Tour is due to repeat in 2004 in Wal-Mart parking lots across the USA).

USC’s approach is typical of most event marketers: it measures sales volume in the weeks after the event, it conducts direct questioning as attendees are leaving the event, and in many cases, it does an e-mail follow-up in the succeeding weeks.

Most event marketing agencies will go farther if the client can be persuaded to. “Measurement is high on everyone’s agenda right now,” says Michael Westcott, VP Marketing, George P. Johnson, Detroit, MI. Westcott advises clients to use at least seven ways to measure their event marketing: track lead quality and quantity; calculate total audience size and the quality of impressions; assess the overall effectiveness of the brand message; gather competitive intelligence (from a trade show floor, for example); gain a better understanding of audience behavior; find specific sales opportunities at the event where an incentive is given; and the evaluate impact on public relations. “Marketers and the agencies that support them should build in programs that measure as many of these parameters as possible,” Westcott says.

And why? Because it will lead to more effective event marketing and more of it. In recent research by GPJ, 33% of respondents reported they want to do more events, while of those already measuring impact, a full 51% plan to do more events. “Those marketers already understand the value of event marketing, and will therefore do more,” he says.

Like Bryan, Westcott has learned that different clients have different measurement priorities. In the high-tech sector, he says, sales opportunities are the most important measure. For consumer brands, impressions tend to be more relevant.

And then there are clients who can’t get enough data on any of these querstions. For them, event marketing specialists have tried to push innovation. For example, this past year, AMP developed its Brand Ambassador Tracking System (BATS). The Web-based reporting tool “let’s us make better decisions for our clients through real-time access to information,” explains Myles Kleeger, VP AMP Designs, a division of Alloy based in New York City.

BATS captures estimated tour attendance figures and demographics on the crowd, as well as the numbers of samples, premiums and coupons distributed. It allows field staff to transmit consumer quotes, photos and event highlights back to the agency. AMP edits the data, then releases it to a secure Web site where the client can review. Depending on the retailer involved and the client’s needs, BATS can add a transaction data link with sell-through and coupon-redemption data, uploadable daily.

New paradigm: ROE

But for all the data being generated and crunched, are any of these lines of inquiry on the right track?

While she’s cautious to phrase her opinion diplomatically, Pam Batalis doesn’t think so. “Transaction data is a statistically valid answer to a meaningless question,” she says.

Batalis is VP-business development for Brand Keys Inc., a New York City-based research and brand consultancy. She is also the co-chair of the Promotion Marketing Association’s new ROI Sub-Committee (John Palumbo, president of DVCX, New York City, is her co-chair.)

“More than ad spend, more than direct mail, events touch the consumer and impact the brand — but brands have not helped themselves by accurately measuring the impact of them,” Batalis says.

Batalis went to the Promotion Marketing Association and its Event Marketing Council last year with a proposal that more study be done on measurement standards.

She found a receptive audience. “The new PMA ROI Sub-Committee wants to raise the caliber of measurement by challenging metrics that have gone before — not discard them. But the same old-same old won’t cut it,” Batalis says. Instead, metrics have to be that will quantifiably assess all aspects of an integrated campaign.

“ROI [return-on-investment] has become a worn-out phrase. We’re beginning to encourage people to think about ROE: return-on-equity. We want people to ask how their promotions and events drive brand equity,” she explains. That process begins by documenting and quantifying the equity increase resulting from a promotional effort.

As Batalis outlines it, the switch to equity measurement goes far beyond the transaction data that has traditionally been tallied and scoured to measure the success of an event promotion. Under that model, the numbers of widgets moved at a county fair was the indicator of long-term loyalty or a tendency to buy widgets in the future. The problem is, it’s not, she says.

But clients, and therefore their agencies, have a hard time letting go of the traditional metrics. Batalis says the PMA ROE Sub-Committee is trying to respect the “metric needs” of all of its constituents as it brings together a standard for industry best practices.

Supporting her position, Batalis uses case studies of certain brands that she says have bought the ROE gospel: KeySpan (an energy utility in the competitive Northeast market), Avis (which does not compete on price, but keeps growing its profit), and Cendant Car rental (which eschews loyalty programs).

These brands hit the wall about five years ago or more, and then switched over to a ROE marketing standard. “They learned that they could not build their brands on the basis of price,” Batalis says.

Nowadays, more brands are hitting that same wall, and crumbling under price pressure. Brand extensions fail more often as compared to five years ago, because the same strategic measures and decision-making practices are being applied, she argues.

Complex consumers

Adding to the pressure, during this same period, consumers have changed, and become more complex. Communication access points have proliferated. There has been a splintering of media, and an overall increase in the volume of marketing messages assailing the average American.

As consumer complexity has increased exponentially, so the evolution of consumer attitudes has become more complex in response. Brands need to understand the role of factors other than price that inform consumer values and impact their purchasing decisions.

“Again, this is about return-on-equity — not return-on-sampling or return-on-couponing,” Batalis says. “If you enhance your brand equity, you then enhance loyalty, which in turn enhances profitability. And which brand manager, or CEO, doesn’t want enhanced profits.”

While the ROE model has substantial support among event marketing agencies, even those agency execs serving on the PMA’s ROI Sub-Committee are realistic about the alacrity with which brands may adopt the mind-set. “We may be some time away from the adoption of the ROE model because of the expense involved. The exception may be perhaps for the largest events,” Westcott says. “Until there is a research product or evaluation tool that makes ROE more affordable, brand marketers will go slow.” He notes that there is also a behavioral and education challenge that must be met by agencies before their brand management clients will realize the value of the ROE model and adopt it.

Laura Shuler, executive VP for event agency Jack Morton in New York City, has explored the ROE model with Batalis, and she endorses it. But Shuler also agrees that the expense of implementation will mean adoption will be gradual.

And Bryan echoes the hesitancy. “The return-on-equity approach makes a lot of sense, but not every client needs that much validation to run an event,” he says.

Batalis recognizes that spending is the stumbling block to wider acceptance of the ROE model. More sophisticated questioning and analysis, both before and after the consumer has the experience, will cost more but also yield more, she says. “Spend wisely to build brand equity, and you’ll be right more often,” she says.

Evolution by necessity

Product sales data and yes-no exit quizzes on future intent to buy are the old-school measures of event success. According to Pam Batalis, VP, business development, Brand Keys Inc., marketers should consider investing in new methods of evaluating a consumer’s response to an event. “Rethink the line of questioning and the statistical analysis of those responses. Direct Q&A will not tell you what you need to know,” she advises. In addition, she suggests: Don’t rely solely on direct or indirect data — effective analysis emerges only from the appropriate mix of both. Find out what consumers really think vs. what they say they think. Use weighting algorithms, factor and statistical regression analysis. Use queries based on clinical psychology models to unearth emotional and logical consumer responses. Assess the value trade-offs.

Brands that get it…or not

EQUITY-ORIENTED PRICE-DRIVEN
KeySpan (utility) K-Mart (retailer)
Avis (car rental) McDonald’s (QSR)
Cendant (car rental) Burger King (QSR)
Target (retailer)

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