In this article we outline how to value impressions and the role impression value plays in measuring event marketing ROI. You’ve done the hard work, collecting accurate data from each of the five categories of event marketing impressions that we listed on Tuesday, August 23, 2016 (Article).
Now we need to put a value on those impressions to include them in the event marketing ROI model.
Understanding the Role of CPM in Event Marketing Impression Value
Let’s say that we had 100,000 impressions.
What are they worth? They are worth a lot. They are worth what your Client would have had to pay to get the same information elsewhere. Understand “Elsewhere” as “Cost per Thousand” impressions (CPM). It’s the most commonly-used metric for media buying when talking about how much will be bought.
CPM varies by marketing channel. Typically, it ranges from a couple of dollars for online banner ads or free-standing inserts to $25 or more for floor graphics or shelf talkers. In the middle, you’ll find media like magazine spreads ($14 to $19 CPM, depending on targeting) or direct mail ($8 to $10). If your Client doesn’t have a CPM readily available, use $12 (0.012 cents per impression) as a reasonable average.
Using a $12 CPM, 100,000 impressions have a value of $1,200. Not chump change.
The impression value is only half of the equation. What about the revenue from new customers? How do we figure that? And what is the overall average ROI in experiential marketing?
Event Marketing ROI Benchmarks
Across 45 typical campaigns, we had an average of 136 thousand interactions per campaign. Taking into account the percent of non-customers and the average purchase intent, we identified upwards of 74,000 potential new customers.
(The calculations are a bit more complicated than that. For details, see Video 7 in our Event Measurement Training series.)
The question is, “How many of these 74,000 will actually buy?” In our post-event research, we often follow-up with participants at one, three, or six months after the event. We ask what they’ve actually done since the event. We have learned that 60% is typical for actual versus intended behavior. Academic research in this area is available in, “When do purchase intentions predict sales,” buy Morwitz, Steckel & Gupta, published in in The International Journal of Forecasting in 2006. Their work includes dozens of studies. Their findings agree that 60% is a reasonable estimate.
The result, in our example, is 44,000 people who, we can fairly assume, purchased as a result of the experience. When you take into account the average value per customer and average budget per campaign (again, see Video 7 in our Event Measurement Training series details), the average ROI for event marketing is fairly simple to calculate.
In addition to our coaching services, we provide access to a Benchmarking Database that details the ROI of dozens upon dozens of event marketing campaigns in multiple industries. If you are interested, we invite you to read more about our Event Marketing Benchmarking services.