Tuesday, December 1, 2009

ROI and Measurement: the future of activation & events

All of us compare benefit and cost of almost everything we do everyday. And not just in matters of money. But particularly, any kind of expense or investment is first-up analyzed in terms of the value equation. The specific analysis that is done may well be done in qualitative terms or quantitatively, that is often the only difference. Historically, Marketing communication has been an area in which the qualitative and subjective evaluation rules the roost. Even today, large parts of the established advertising industry is evaluated subjectively and at awards functions and processes the creative is given considerably more importance than the return in business terms.

As the activation and events business has developed over the past decade and a half, the qualitative and subjective evaluation process has been the primary path. Till a few years back very few clients (and even fewer agencies) felt the need to evaluate the activities that they were investing in, in ROI terms. To add to this the economy was booming and the question was not whether / how much you were spending but where you were spending. Most clients simply looked for agencies that would ‘efficiently’ get the job done rather than be concerned about the results of the job. This was never going to last, it was a myopic approach to the business and many a fly-by-night operator made money and has now fled the industry.

This has very quickly turned upside down in the past year or so. This has hastened the need for justifying spends for all concerned. Most clients are now being forced to ask some very uncomfortable questions off themselves and their agencies. “What do I get for the money I spend on an event /activation?”. Add to this, the fact that the industry itself has gone through a metamorphosis and as a result today the leading agencies are in a position to answer the question, something that may not have been possible a few years back.

The time is right. The time is right to develop a measurement / ROI tool for our industry. While the time is right, the path ahead is not entirely clear. This is primarily because our industry is a highly competitive and fragmented one. Unless a strong centrifugal force is created, the natural tendency is a strong centripetal force. And therein lies the problem. It is absolutely crucial that the industry stand together in the development of the tool so as to create a common platform.

A common platform is even more important in our industry because of the complexity of our industry. While we keep referring to the Events / Experiential Marketing / Activation industry as one industry, the reality is that the industry is actually an amalgamation of 4-5 mini-industries. Consequently, the process of developing a measurement tool becomes an even more complex business. Each particular business segment has very different drivers and thus measurement of outcomes needs to be approached differently. The challenge is to go down to the core of the process to understand what makes it tick and then develop the tool around that core. The process is complex – but not impossible, far from it. At the end of the day, a process-based tool developed by the industry for itself will take into account all the intricacies and complexities and prove the efficacy of events and Activation to clients / investors. This process of development of such a tool has been taken by EEMA, which is the national body for the Events and Activation industry in India. EEMA is already well on the way to developing such a tool which will deliver and ROI analysis and evaluation for clients to be able to measure results.

It is inevitable that an objective tool or rating system will come into being that will assess, measure and report the efficacy of events and activation to clients from a neutral stand-point. The neutrality of the stand-point is a no-brainer. Several agencies in the industry have attempted developing and implementing proprietary tools but I think such a move is inherently flawed. Having an agency evaluate and measure its own projects is a bit like making students evaluate their own examination papers. And while we would all have loved to do that when we were in school, it was never going to be! The neutrality of the tool is the reason EEMA took it upon itself to develop and eventually implement the ROI measurement process.

Moving forward, a neutral rating system developed by the industry as a whole is crucial to the growth of the Events and Activation Industry to prove itself as a viable and often better marketing communication option to advertising.

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