Most Event Marketers live and die by their marketing budgets.They are mostly under tremendous pressure to prove the effectiveness of every little activity that they spend the budget on. Every expense – booth, floor space, internet connection, meeting room rentals, etc. – counts against the event budget. Event Marketers tend to spend countless hours worrying, planning and reconciling these expenses. In spite of all the efforts, the impact of marketing on event ROI remains elusive and difficult to measure.
But what if event marketing budgets were eliminated? What if event market budgets were infinite?
It sounds too good to be true, right?In fact, it sounds impossible.
But it’s not. Take a step back and look at the evolution of online advertising with the rise of Google. There’s a lot that event marketers can learn from how Google transformed the definition of success metrics and redefined online advertising.
In the early days of the internet (1996-2000), there were many early websites that sold banner ads based on impressions – or more specifically, Cost Per Thousand impressions or CPM. Early search engines like Excite, Alta Visa, and Infoseek also sold banner ads based on CPM.
Then came Google. At first, Google was just focused on building a better search engine with more relevant search results. They actually had no viable business model prior to 1999.
All that changed in 2000 with the introduction of AdWords – the digital advertising game changer. First, Google charged a flat monthly fee to manage an advertiser’s campaigns on its platform. Then,it allowed marketers to target their ads to specific sites on a cost per impression basis. Finally, Google allowed advertisers to bid on very specific keywords on a Cost per Click (or CPC) basis.
The rest is history. After about 15 years of this, Google (now Alphabet) now has a market cap of over $500B and is one of the most valuable companies in the world.
What just happened?
Google AdWords revolutionized advertising in 2 important ways:
- By allowing advertisers to buy very specific keywords, Google made online advertising much more trackable. Suddenly, online advertisers could see exactly which keywords were resulting in clicks to their websites.
- By allowing advertisers to buy on a Cost per Click basis (and not on a Cost per Impression basis), Google eliminated risk and uncertainty for advertisers. Advertisers could precisely measure not only the Cost per Click for ads on Google but also the Cost per Sale for those keywords and ads.
The economic impact of these changes is best described in an Economist article entitled “The Ultimate Marketing Machine,” printed in July,2006:
“If you can track the success of advertising, especially if you can follow sales leads, then marketing ceases to be just a cost-centre, with an arbitrary budget allocated to it. Instead, advertising becomes a variable cost of production that measurably results in making more profit.”
In other words, AdWords almost single-handedly made internet advertising a variable cost of production instead of a budgeted cost center. Today, any online advertiser (especially in the B2C world) will tell you that online advertising budgets don’t exist. As long as the cost of acquisition is lower than the average gross margin of a sale, they are allowed to keep on spending.
Back to Event Marketing
What lessons can the average Event Marketer learn from the rise of Google and internet advertising? Here are the top 3 ones:
- Make everything more trackable: Eliminating online advertising budgets didn’t come from making things less trackable – it came from making things more trackable. Event Marketers need to invest in solutions that can measure and quantify everything that happens at an event. Tracking cost is necessary but not sufficient. It’s also important to…
- Link the event to sales metrics: .Many companies think that event marketing is just for lead generation, and the number of leads is a sufficient success metric. The problem is, not all leads are created equally and they take quite some time to convert into opportunities and ultimately sales. The more you can link your marketing events to actual sales meetings that happen at the event, the more likely it is that your organization will see event marketing as a necessarily cost of sale, rather than a frivolous expense with an arbitrary budget.
- Measure the value-add of the event: Measuring the number of sales meetings at an event is necessary but not sufficient. You need to measure the increase in the pipeline as a result of those meetings happening at your event.
To illustrate all of the above, imagine if your CEO comes to you and says, “We spent $5M at that event. What did we get out of it?”
|If…||Your response would be…|
|You only measure brand||“We had a big booth and generated a lot of buzz…”|
|You also measure leads||“…and we generated 600 leads…”|
|You also measure Sales meetings||“…and we had 200 Sales meetings at the event, representing $100M in pipeline…”|
|You also measure the impact of those Sales meetings||“… and those 200 Sales meetings caused estimated pipeline to grow by another $150M.”|
In the first 3 scenarios, you can imagine your CEO saying, “Yeah, but was it worth spending $5M on this event?”
In the last scenario, you can imagine CEO saying, “Wow! That’s incredible. How many more events like this can we go to?”
And that is the equivalent of an infinite event marketing budget.
Head of Products,Jifflenow