Measuring the Effectiveness of Marketing Events With Objective Ratios


Projektarbeit, 2016
24 Seiten, Note: 92%

Leseprobe

Content

1. Introduction

2. Theoretical Background
2.1 Theoretical Background of Effectiveness
2.2 Existent Methods of Evaluating Event Outcomes

3. Analysis
3.1 Conditions for the Event Evaluation Process
3.2 Definition of Used Figures
3.3 Process of Measuring the Effectiveness of Marketing Events
3.3.1 Limitations of Objective Ratios

4. Real World Examples

5. Conclusion

Reference List

Appendix

List of Figures and Tables:

Formula 1

Formula 2

Formula 3

Formula 4

Figure 1: Event

Figure 2: Event Effectiveness Measurement

Figure 3: Event Effectiveness

1. Introduction

The following statements are based on Bruhn (2004) and Holzbauer et al. (2002, p. 6-91). Due to globalisation, the competitive environment of companies has become faster and more complex. Companies have to choose innovative and disruptive solutions to differentiate themselves from their competitors in order to operate profitably. One of those solutions is the implementation of marketing events. These are a source of differentiation and create opportunities to present the business in a unique way. Furthermore, general marketing activity increased by a great extent during the past years, due to increasing needs of customers. Business representatives are of the opinion that events are more effective and tailored for customers than alternative marketing strategies as they involve specific target groups and create a unique experience which stays in the customer’s minds.

Research shows that marketing events are gaining momentum within the product and brand strategy of companies, and corporations spend millions of dollars on their execution. In Germany, companies spent more than 2,79 billion Euro on marketing events in 2014 (Statista 2014). A similar trend is present in the United States: According to the Conventional Industry Council 1.8 million corporate business events were hosted in 2012. This represents an increase of 10% compared to the previous year (Convention Industry Council, 2014).

Despite the growing importance of Marketing events, many businesses do not have a professional process of evaluating the effectiveness of events (Nanji, A. 2013). In fact, a survey conducted by Ayaz Nanji, Co-Founder of the marketing agency ICW content, showed that less than 50% of businesses within the United States have a standardized method to measure event outcomes.

As marketing events can generate short term buying impacts on customers, as well as change their consumption behavior and attitudes in the long run, it is necessary to evaluate the effectiveness of this marketing strategy (Sneath et al., 2005, p. 373-381), (Chattopadhyay & Laborie, 2005, p. 9-16).

Companies that are not investigating or measuring outcomes of their events, will not be able to reliably state whether an event was successful or not: at a certain point, there is a necessity for event measurement (Saget, A. 2006, p. 164). Furthermore, according to Laurance Yap, Marketing Director at Pfaffmotors Inc., it is difficult to justify budgets that are spent on events of which outcomes are not measured and written down (L. Yap, personal communication, 2016). Furthermore, he is of the opinion that the missing standardization of event evaluation creates difficulties to consequently compare the performance of events. (L. Yap, personal communication, 2016).

Often, companies that do measure the effectiveness of marketing events, base their evaluations exceptionally on soft facts like subjective opinions and impressions (Nanji, A. 2013)

When using objective methods to measure the effectiveness of marketing events, decisions for improving future events can be made. Similar to a person climbing a mountain, different paths can lead to the top, however, biased, subjective, and wishful thinking when evaluating those paths, can lead to a disaster. Carefully evaluating objective information is necessary to reach the top, as well as to achieve best results for marketing events (Buchanan, 1998, p. 10).

Based on the above highlighted facts, this paper states the thesis: “When using objective ratios besides subjective impressions, companies have the opportunity to increase the profitability and effectiveness of marketing events”.

The intention of this paper is to discuss the above stated thesis as well as the questions why it is important to not only concentrate on subjective impressions, known as soft facts but additionally use hard facts like objective metrics, for evaluating marketing events. Findings within this paper are underlined by scientific sources as well as interviews with different management representatives whose marketing strategy focuses on the execution of marketing events.

After this introduction, the following chapter deals with the theoretical background of the paper. Scientific literature which is relevant for understanding the analysis of the thesis, will be discussed. Furthermore, already existent evaluation methods will be presented.

Within the chapter: “Analysis”, the process of evaluating the effectiveness of marketing events will be explained. Moreover, different ratios for the measurement process will be described as well as interpreted. To conclude the chapter, the question as to whether it is sufficient to use objective ratios solely, will be investigated.

The fourth chapter of this paper links the theoretical part to practical reality, with describing a real live example based on information of my summer internship at Pfaffmotors. Inc., Canada.

A final conclusion of the paper will be drawn in the last chapter of this paper. Implications of the previous modules will be highlighted, an interpretation will be stated and personal recommendations will be discussed.

2. Theoretical Background

In order to understand the investigations of this paper it is important to be familiar with the meaning of the term “marketing event”. Marketing events address multiple senses of selected participants and are used as a platform for corporate communication (Bruhn 1997, Translated from German).

An observable trend during the last years is that traditional communication tools, such as sales and advertising promotions, face new challenges. Customers are overloaded with advertisement messages of companies and therefore are resistant to most of them. Marketing events, on the other hand, are an effective way of gaining customer’s attention and interest (Diehl, et al., p. 191). In addition to that because of companies’ ambivalence towards traditional advertisement, marketing events are highly favourable (Meenaghan 2001, p. 95-121). Now that companies draw more attention and spend a greater budget on the execution of marketing events, the importance to ensure marketing events to be effective has grown (Stevens, 2005).

Identifying a successful event is a difficult task compared to evaluating traditional approaches. Taking for instance a marketing strategy as the implementation of online- advertisement banners on a website, a business can clearly state how many people clicked on the ad and, with a proper customer relation software, even how many of those ad- clicks resulted in a sale (Ghasem et al., 2010, p. 2).

An event however, consists of many different components and is difficult to be precisely identified and evaluated (Saget, A. 2006, p. 125). Those components are for instance the general sentiment, resulting leads and sales or the conversion rate of invited people that result in actual attendants.

Without the usage of objective ratios, it is difficult to track the event execution process, as well as the success of events (Sprung, R. 2012). Many companies do not have an adequate evaluation method or base it on subjective impressions only. This can lead to wrong profit and success perceptions, as well as biased decision making by management (Sprung, R. 2012).

Management of a company is focused on evaluating which strategies are profitable and which are not. As soon as marketing events generate costs and do not create qualified leads or sales, management will not be willing to spent further resources on executing them (Saget, 2006, p.14).

Saget (2006, p.163) shows: undergraduate and graduate programs which managers are taking before joining a company, often cover the most important marketing classes, such as “Marketing Research”, “Promotion” or “Advertising”. Unfortunately, “Event Marketing” is not one of the standard courses covered within those programs. This creates even more difficulties to communicate the importance of marketing events to top management (Saget, 2006, p.163). Additionally, the need for developing a method to measure the event effectiveness, in order to present the factual outcomes to company leadership, is confirmed. Accordingly, one of the first steps to measure event effectiveness is to develop comparable metrics which are captured on a steady basis for every event (Saget, 2006, p.164). A common metric often used, is the “number of generated leads”. Before using this metric, it is essential to define it. A customer who has a general question during an event is not to be automatically counted as a lead. The marketer has to differentiate between an inquiry and a qualitative lead (Saget, 2006, p.164).

2.1 Theoretical Background of Effectiveness

Another important aspect to understand the investigations of this paper is the concept and meaning of the term “effectiveness”.

Effectiveness describes the degree to which objectives are met, as well as the extent to which targeted problems are solved, without references to costs. It is often described as “doing the right things” (Tangen, 2004, p. 726-737).

Referring to this, objectives are the goals predefined by a marketer before executing a certain marketing event. An example could be the generation of 30 qualitative leads. When all set objectives are met or exceeded the marketing event can be classified as effective. If the objectives have not been met, the event host has to question whether the event was effective and which factors caused this possible in-effectiveness.

Effectiveness also describes the ability to design a unique model of embracing business opportunities and is therefore related to a companies own “receipt” for generating profit and growth, within its surrounding business network (Mouzas, 2006, p. 3).

To avoid mixing up the term “effectiveness” with the similar but yet different word “efficiency” the following paragraph will highlight the differences between both expressions.

Efficiency describes the comparison between what is actually produced and what could be produced, using the same amount of resources (Businessdirectory.com). Furthermore, in contrast to the above stated definition of effectiveness, efficiency is about “doing things right” (Rämö, 2002, p. 569-574). As a matter of fact, a company or an event can be run efficiently, without being effective. This means, for instance, that an event, was run at very low costs and consumed little resources in general, however, the objective of generating qualified leads was not met. Therefore, the event was executed efficiently but ineffective, as it generated no additional value for the company.

Combining the above definitions, it becomes clear that measuring the effectiveness of marketing events is about identifying which values have been created for the company, by means of an increased market share or profit, bolstered brand awareness or others. Executing events efficiently, and using as little resources as possible in order to safe costs, is non-negligible. However, it is not focus of this paper.

Marketing events in general aim at the creation of emotional and experiential linkages between customers and the company, its products or a brand. It is difficult to measure emotions with objective measurements, this is why besides an objective measurement, a subjective evaluation should be implemented (Wood, 2009, p. 250-253). As mentioned before, a marketing event consists of many different components and touch points with the customer. Therefore, some authors are of the opinion that it is impossible to measure all those different components and, as a matter of fact, the evaluation is meaningless (Wood, 2009, p. 253). However, as budgets spent on marketing events are steadily increasing, the necessity arises to implement reliable and objective methods, showing the event’s return on investment (Wood, 2009, p. 253).

2.2 Existent Methods of Evaluating Event Outcomes

Different methods of measuring the effectiveness of marketing events do exist and are used by companies. The first tool of analysing the outcome of an event that can be classified as an objective measurement method, is the econometric analysis. With this method it is possible to identify causes of change in event outcomes through developed, quantitative models (Wood, 2009, p. 253). Using this model, a company is able to explain changes in “sales” by factors that have primarily been identified to influence the figure “sales”. A necessary condition for this evaluation method is the existence of accurate, historical data. Moreover, the marketer has to define which measurement is to be used for dependent and independent variables included in the model. Examples for this measure, can be attendance, leads, costs or others (Wood, 2009, p. 254). For performing a reliable econometric analysis Cook (2004, p. 37-40) suggests that:

1. all historical data have to be gathered,
2. the accuracy of those has to be ensured,
3. a clear specification to what expected outcomes are, has to be made
4. factors that are necessary and those that are supplementary, have to be categorized.

Econometric evaluation is very useful, however, its main focus lies on capturing quantitative data. For a proper marketing event evaluation, an additional qualitative evaluation is recommended, by means of capturing customer impressions and attitudes with interviews or surveys (E. Wood., 2009, p. 255).

Another method of evaluating events are stochastic systems. This tool is a combination of econometrical logic and realities of complex interactions. The core element is to describe relationships between different variables. Good judgement and versatile analysis are factors that determine the nature of those relationships (Archer & Hubbard, 1996, p. 22-26). Events are evaluated by using questions as:

1. How well is the target customer group reached and involved?
2. Which messages does the customer receive concerning the brand, product or business?
3. What are activities customers do perform on the event?
4. What do they prefer to perform as activities?
5. Why do they prefer to perform those activities?

In the long run, the evaluation outcomes are more holistically focused, whereas they are stimuli focused in the short run (Archer & Hubbard, 1996, p. 22-26). Using stochastic evaluation methods in combination with econometrical measurements is a powerful toolset to evaluate the performance of marketing events.

The third method highlighted in order to demonstrate the contrast between objective and subjective evaluation methods, is the measurement of event created feelings and beliefs. As mentioned before, emotional as well as subconscious feelings are difficult to measure. Zaltman (2003, p. 8 – 10), developed a method to identify underlying drivers which motivates customers to buy a product or to form an opinion of a certain brand.

Several established methods from cognitive neuroscience, psychotherapy, psychology and sociology are used to reveal fundamental attitudes, believes and feelings that influence the actions of customers by taking them through various experiments (Peter & Olson, 2008). The outcomes could lead to a significant understanding of event customers and could be useful for the optimization of future events. However, the presented method is not only time consuming but expensive. The event hosting company has to evaluate whether benefits of gaining those customers insights outweigh costs of conducting the evaluation method (Wood, 2009, p. 259).

3. Analysis

3.1 Conditions for the Event Evaluation Process

The following methods and procedures have been developed while working as an intern on analysing and planning different corporate events at Pfaffmotors Inc., an automotive company focusing on marketing events as core marketing strategy. The variety of Pfaff’s events includes: Sponsoring-, branding-, sales-, as well as experience based- events. All event evaluation methods that are presented are used to reflect general trends and to answer whether an event was effective or not. They are marginally limited in accuracy, since various factors can not be determined adequately. All data and figures highlighted are modified, in order to protect the company’s data principles. Presented statements are based on company internal knowledge.

Several conditions have to be fulfilled in order to properly measure the effectiveness of marketing events with objective ratios. One of the most important aspects is the constant gathering of accurate data. These are considered to be the basis of the measurement process. Missing or inaccurate data may lead to biased evaluations. Furthermore, it is difficult to reliably draw and interpret the event outcomes or compare them to other events (Wood, 2009, p. 254). A further condition is the agreement on evaluation metrics. Marketers have the responsibility to ensure that the same metrics are used for equally categorized events, otherwise those events can not be compared to each other. Sticking to a pre-defined time frame when different metrics are to be measured is the third condition that needs to be fulfilled. It can be of great difference, at which point in time the generated sales of an event are tracked. Measuring this figure during an event can be different to measuring it after the event. For drawing reliable interpretations, marketers should ensure to track the standardized event evaluation over a time frame of several years. Due to randomly occurring factors, as for instance a snow chaos hindering customers to attend the event, short term evaluations can be biased. The more evaluations are captured, the more reliable and comparable are the results.

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Details

Titel
Measuring the Effectiveness of Marketing Events With Objective Ratios
Hochschule
European Business School - Internationale Universität Schloß Reichartshausen Oestrich-Winkel
Note
92%
Autor
Jahr
2016
Seiten
24
Katalognummer
V346615
ISBN (eBook)
9783668361010
ISBN (Buch)
9783668361027
Dateigröße
675 KB
Sprache
Deutsch
Schlagworte
Marketing, Event, Measure, Effectiveness, Marketing Event, Objective, Objective Ratios, Measuring Effectiveness of Marketing Events, Financial Ratios, Marketing Event Measurement, Measuring Marketing Success, Measuring Event Success
Arbeit zitieren
Fabian Büngers (Autor), 2016, Measuring the Effectiveness of Marketing Events With Objective Ratios, München, GRIN Verlag, https://www.grin.com/document/346615

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