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Special Report on Event Marketing
No longer a bit player, event marketing moved to the top of the bill in 2003. At one time, marketers might have thought of events in terms of a stand-alone mobile unit parked at Wal-Mart to introduce new hair care products, or a guerrilla team working the streets of New York or Chicago to pass out coupons for a cellular phone. Now, events are integral to the marketing mix — not necessarily always the centerpiece — but an element in an orchestrated promotional mix that boils down to success.
Marketers dropped a total $132.3 billion into the event marketing bucket in 2002, a 15% jump over 2001, and the numbers continue to rise. Last year, budgets for event marketing reached an average $827,911, according to PROMO’s 2004 Event Marketing Study, the first time the study has been conducted. (See Chart 1.) Agencies reported budgets of $1.2 million for the year, compared to manufacturers at $885,083 and retailers and the service industry at $574,297. Budgets are expected to rise another 15% to 20% this year, with 36% of respondents planning an increase compared to 45% who expect budgets to stay about the same and 8% projecting a decrease. (See Chart 3.)
Funding for event budgets, and promotion in general has been siphoned away in recent years from traditional media advertising as promotion takes the marketing lead, and plenty of funds are being earmarked specifically for events.
“It’s not just a shift out of advertising [dollars] anymore,” says Jay Lenstrom, CMO of the Radiate Group, New Berlin, WI. “These budgets are being built from the ground up and they’re coming in quite a bit larger than they were two years ago.”
As budgets grow, so too does the interest of top-level executives, especially CEOs and CFOs.
According to the survey, 39% of owners, CEOs and other executive-level management and 33% of directors want a say in the decision-making. The stakes are higher too. With more money being invested, the call for return on investment (ROI) has reached near-deafening levels. Marketers want to know exactly how much bang they’re getting for their buck.
“People are looking at every nickel,” Lenstrom says. But measuring ROI can be tricky. Just ask the Promotion Marketing Association’s Event Council, which is working on a number of initiatives to demystify ROI, says Claire Rosenzweig, president of the New York City-based PMA. It is developing guidelines on how to measure the impact of events on brands (see p. 40 for related story) and is offering a Web seminar Feb. 10 called “How To Measure Event Marketing.”
Developing pre- and post- event measuring attributes has become of full-time job for many brands. Financial services company ING developed a full-scale research process three years ago when it began branding in the U.S. and continues to evolve the process for every sponsorship and event in participates in.
“It’s vitally important,” says Steve Baskin, ING’s head of advertising and sponsorships. “We wouldn’t be able to justify the sponsorships without some level of effectiveness. We measure every move we make.”
ING was the title sponsor of last November’s New York City Marathon, the first time in the city’s 34-year history that it had signed a title sponsor.
PROMO’s survey found that counting heads (67%) was the favored method of determining ROI, followed by sales (49%), the number of samples or coupons distributed (35%) and hits or other measurable activity on the the Internet (28%). (See Chart 2.)
Among other methods used by respondents were: feedback from attendees and clients, new clients, number of leads, premiums distributed, redemption, registrations and retailer satisfaction.
“With an increased awareness of accountability at all levels of corporate behavior, [ROI] is an issue that is always up for discussion and evaluation,” says Lisa Holland, a partner with OPTS Events in Sausalito, CA, and New York City.
The standards by which the success of an event is measured vary widely, of course, depending on whether it was intended to create brand awareness, introduce a new product or generate sales or trials. According to the survey, the No. 1 goal was to boost sales (79%), followed by raising brand awareness (at 74%) and capturing market share (at 64%). Marketers also indicated a desire to meet customers face-to-face, capture customer data, generate trial, introduce a product or service or brand, and foster retail relationships.
When planning an event, 79% of respondents worked with an in-house marketing or event department, as compared to a full-service promotion agency (22%), event marketing agency (19%) and independent event planner (17%). (See Chart 5.)
The invitation
Getting the word out about an event is a key component that can make or break the event’s success. Marketers reported that direct mail (64%) was the top method used to drive attendance, followed by local radio (46%), in-store promotion (43%), and guerrilla marketing (41%). Local TV pulled up the rear with 24% of respondents saying was a preferred traffic driver. (See Chart 4.) Experts say integration is key and that a mix of direct mail, radio and in-store merchandising proves a great recipe for success.
“Direct mail is by far the best mechanism, because it can be so targeted,” says Clint Pierce, CEO of Pierce Promotions & Event Management, Portland, ME. “Databases allow you to select a group within a particular area and be very targeted, but it’s really about integration. We know that’s the most effective way to drive attendance because you’re reaching people in different ways.”
Traditional advertising often plays a part as well. “Advertising allows us to force the issue and events allows us to get on the ground with the consumer and be more a part of their consumer’s neighborhood and community,” ING’s Baskin says. “Both are very important to us.”
Tag on or go it alone?
An inevitable question is whether a brand should initiate and host an event or “tag along” with a partner as a sponsor. Sponsorship can be attractive for a number of reasons. It offers a lower entry point than hosting an event as a solo player, and places a lower burden on internal staff. Partnerships can easily be fostered. “It allows you to put your toe in the water and see if this is something that provides return without going to the full expense of hosting,” OPTS Events’ Holland says.
Of the 72% of respondents that indicated being involved in event sponsorships last year, 45% reported increased participation over 2002, compared to 19% who reported a decrease. Forty-two percent indicated a jump in sponsorship spending last year, a number that falls slightly to 38% this year. However, fewer respondents plan a decrease in spending, with only 9% planning a drop this year compared to 21% in 2003. (See Chart 6.)
The downside to sponsorship may be the spotlight-sharing that is central to good partnering. Brands can get lost in comparison to the main sponsor and the event may not provide sufficient resonance with attendees; or, since the brand may have little or no control over content and marketing, the event may not match brand attributes, Holland cautions.
Hence the 60% of respondents who reported hosting an event. When hosting their own event, brands can create an original program to align with its character, marketing message and target demographics. “It can provide a boost over the competition in specific market segments where competition is high and advertising is not enough,” Holland says.
Forty-seven percent of the respondents in the PROMO survey pool increased their participation in hosted programs in 2003 over 2002. This compares to 33% of respondents who said hosting spending stayed about the same, and 13% who indicated a decrease. Spending on hosted programs jumped in 2003 for 46% of those surveyed, compared to 32% who said it stayed the same and 14% who decreased expenditures. As for this year, the number of respondents planning an increase in hosted event spending drops off to 37%. (See Chart 8.)
Staffing up
Finding field staff has become a high-wire act in itself. Many agencies have built elaborate established networks of staffers throughout the country (and beyond) eager for work. Experts say the time is ripe to find hard-working employees after years of corporate downsizing left an abundance of talented marketers without a job. The survey found that the most popular ways to find field staff were from an internal database (41%) or through an agency (34%).
Staff is most often trained in person (78%), or via the Internet or CD-ROMs (11%). A surprising 19%, however, provided no training to field reps.
Compensation can vary depending on who is doing the hiring. Field reps earn an average $12 per hour, with agencies offering the highest pay at an average $14 per hour versus $11 for those hired by retailers and service firms. Staff paid by the day earns an average $83, with agencies paying $97, compared to $76 for the retail and service sector. (See Chart 7.)
“If you have enough scale and enough clients, you can keep these people working, and that’s a huge advantage,” Radiate’s Lenstrom says.
Leading Role
WHEN EXPERIENTIAL and event marketing “burst” onto the marketing scene a few years ago, it was much like the overnight Broadway star who had actually been in show business for years. Event marketing isn’t new, but it is newly recognized for its potentcy and still-untapped potential. In this special report, PROMO editors take a fresh look at the directions in which event marketing is evolving, how it is viewed by consumers and where its impact is seen most strongly. And because quantifiability of this tactic remains elusive, we also share our first-ever Event Marketing Benchmarking Study. We plan to build on this research, so let us know what you think by emailing us at [email protected].
METHODOLOGY
A questionnaire developed by PROMO editors was e-mailed Oct. 22, 2003 to PROMO subscribers selected on an nth name basis. The base list included readers from corporate brand, agency, retail and service companies. Ultimately, 305 surveys were analyzed by an independent researcher, resulting in a 8.4% response rate.
Among Other Survey Findings
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ADDITIONAL marketing goals for events included creating good will, game education, increased retention and loyalty, leadership by example, opportunities to mix with sales channels, relationship marketing, rewarding largest customers and satisfying retail customers.
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MEASUREMENT of ROI is top of mind for all marketers. Written comments about how ROI is measured at events included anecdotal, custom research, evaluations, event call-backs, feedback from attendees and clients, fundraising revenues, the number of leads generated, questionnaires, ratings, redemption rates (coupon or premium offer) and registrations.
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TRAINING field staff can be a challenge when events take place across the country and staff is pulled regionally. Some respondents noted that field staff may be trained by both a “classroom” meeting and printed material, by the client, in-house, on the job and via written instructions.
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AS FOR HOURLY field staff pay, 3.6% of respondents paid the minimum wage of $5.15; 3.6% paid from $5.16 to $5.99; 19.6% shelled out from $6 to $8.99; 35.7% offered from $9 to $12.99; 17.9% paid from $13 to $15.99, 7.1% anted up from $16 to $19.99, and 10.7% paid $20 or more.
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WHEN PAYING by the day, respondents reported the following pay for field staff: 11.3% offered less than $50; 27.8% paid $50 to $74; 15.5% paid $75-$99; 17.5% paid $100-$124; and 16.5% offered compensation of $125 or more for a day’s work.
Network
