With the huge budget allocated to experiential marketing comes rising expectations for experiential marketing to deliver tangible results that directly impact the bottom line. This makes the return on investment (ROI) a key metric to Experiential Marketing or brand activation budget approvals.
Marketers now need more than ever to justify what incremental their experiential marketing investment will deliver on sales during the activation period versus if the company does not invest in the activation at all.
Experiential Marketing ROI is the cost of your experiential marketing versus the return it generates, usually expressed as a percentage. It has two parts, Pre and Post. Heads of Marketing and Marketing Directors now request for pre-ROI calculation as part of experiential marketing proposal approval to determine the potential profitability of the marketing investment and post-ROI calculation to compare actual profitability delivered by the marketing investment vs plan (as detailed in the pre-ROI calculation).
However, ROI calculations have been a topic of discussion for marketers for some time. Two of the questions marketing professionals always ask are “Do they need to calculate ROI for every experiential marketing investment?” and “Does every experiential marketing expense deliver a positive ROI?”.
My answer to these two questions is always “yes” especially when the Experiential Marketing campaign has a sales leg. With more than 20 years of brand management experience, I have clearly discovered that when marketers make the effort to calculate the core ROI metrics, they can easily determine where to put their marketing budget and then execute the effort correctly. My advice to Marketers “Invest where you can achieve the biggest difference”!
Return on Investment (ROI) Formula
To maximize your ROI, you need to consider the following:
1. Give your activation the best possible start:
What do you think are the critical elements to put in place before commencing your experiential marketing event or brand activation to ensure your activation kicks off on the right note? Always have a checklist for your experiential marketing activity and tick off all critical elements to the success of your activation. Ensure all your support materials, communication, point of sales, etc. are ready.
2. Monitor the effectiveness of your experiential marketing closely:
To maximize your ROI, monitor your experiential marketing activity or brand activation closely, know what is working and what is not. Is the Agency complying with the agreed activity plan? Can the Agency take learnings as the activation progresses and apply ASAP? For this to happen, have a clear approval and feedback process and ensure close collaboration between all stakeholders, in most cases marketing, sales, and Agency.
3. Review experiential marketing performance vs. agreed KPIs regularly:
For your experiential marketing to deliver on its objectives, you need to keep an eye on the key metrics in the Agency report to ensure you are on track. Is the Agency delivering agreed results? Through consistent reviews, you can identify performance trends and make decisions on them. Also, track your company sales performance trend before and during your experiential marketing activity, to identify changes in sales during the activation that can be attributed to your experiential push.
4. Include digital amplification in your experiential campaign plan and analyze the impact of your digital amplification on offline activities:
Review the data for each digital channel to determine whether each channel is improving or enhancing your activation performance. The real value of your digital amplification is to increase your activation reach beyond those who experienced it. So, make sure it’s doing just that.
5. Carry out the post-activation review:
To determine the longer-term effect of your experiential marketing activity on shopper behavior and company sales, carry out a post-activation review. To determine the continued positive impact of the activation on sales even after the activation has officially stopped, this will assist to determine your Total activity ROI. You can do the post-activation evaluation from 4 weeks to 12 weeks post-execution.
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