The corporate jolly has long been a part of the fabric of business life, but today corporate entertainment is as subject to close inspection by the purchasing department as any other area of business spend. As a result, marketers have begun to obsess about getting the best return on investment (ROI) on their events – mainly because they think having ROI figures will make the purchasing department and the accountants happy.
But that is simply not the case, according to Eventia, the trade association for corporate events organisers. According to Izania Downie, executive director of Eventia, procurement departments are not actually that fixated on ROI: they just want to make sure they are getting the best price for the best service.
And that is a good thing because ROI is not actually a very useful metric for measuring the performance of an event, adds Downie.
She says: "One of the key stumbling blocks in effective measurement and evaluation of events has been that people have been hooked on the holy grail of ROI. While many corporate organisations will state that they are looking for ROI on events, very few have worked out an effective mechanism for calculating it."
Downie adds that corporate event activity that is well planned will usually be part of a larger integrated marketing campaign. As she points out, if the sales of a new product dramatically surpass expectations, it is almost impossible to know what proportion of that success is owed to the advertising campaign, direct marketing initiatives, retailer incentive schemes – or the big party that was thrown to launch the product to buyers.
Downie argues/ "In the past couple of years there has been a move towards return on objectives (ROO). Even hard-nosed purchasing professionals agree that it makes sense to clearly delineate objectives for an event from the outset, and then to put in place mechanisms to measure its effectiveness."
If an event has a dedicated website created for it, then clearly the number of visits and the downloads from it can be measured – and thus the degree of audience engagement from the outset.
But whether you are using ROI or ROO, organising an event must start with a brief that sets out all the salient factors, including budget, target market, resources and how results will be measured. Measuring impact must be thought about before the planning process starts – it cannot be added at the end as a "bolt on".
Obviously, planning and forethought are vitally important to the success of any corporate event – just as they should be with any marketing activity.
As Reader’s Digest advertisement director Flora MacMillan says: "We host at least three major hospitality events each year for key client and agency contacts. We aim for our trips to be that bit different, to reflect the magazine. We want to encourage busy people to take a second look at Reader’s Digest."
She adds: "I wouldn’t say that one type of event is more profitable than another, as results can vary hugely. However, we do find it more effective to tailor our events depending on our guests’ background and personality.
A "one-size-fits-all approach" is unlikely to work. The solution to that problem, according to MacMillan, "is to invite everyone along and make sure we hold our events at a suitable time. For example, we took invitees and their families skiing in Switzerland during the Easter holidays this year. Our guests really appreciate this extra gesture and we make sure they get the chance to relax with their families and make new friends."
MacMillan is very happy with what she gets for her budget: "The investment is significantly bigger, but the event has a more lasting impact and strong relationships are made."
Belinda Chambers is director of experiential and events company Closer. She says: "There must be brand reasons for doing whatever kind of activity you are running. You can’t just have a big party."
Closer tells all its clients that they need to work out some way of measuring the success of an event. The three that tend to be most used include getting attendees to rate the event, usually via a questionnaire; brand attitudinal tracking pre and post-event (more usually, but not always, used by consumer goods companies running experiential events for consumers); and actual results, which could be sales uplift, new accounts opened or a range of other factors.
But Chambers warns: "The event organisers must agree the key performance criteria with the clients as early as possible."
Samantha Jameson is a director of events company Organza Events. She says: "Ultimately, the type of event that a company chooses to hold will depend on what the company wants to achieve, the industry they are in, the client in question and the objective of the actual event."
But event organisers and their clients must remember one cardinal rule, Jameson argues: "The purpose of the event is not to directly sell the company or product to the clients, but to combine business with pleasure and get the balance right, which is likely to be a far more successful method of maintaining long-term business relationships."
2012: Olympics offers key corporate oppertunities
Last year saw a surge in corporate entertaining due to the FIFA football World Cup, and the next big drivers for corporate entertainment spend will be similar-sized sporting events. For UK business, the biggest corporate entertainment event on their horizon is the London Olympics in 2012.
A survey of senior business people conducted by Continental Research found that 50% of businesses in London and 25% of businesses in the rest of the UK were planning some kind of corporate entertainment involving a trip to the Olympics. That equates to 75,000 businesses in London and 279,000 businesses outside London.
As yet, though, the London Organising Committee for the 2012 Olympics (Locog) appears to have no mechanisms in place for businesses to start pre-booking individual tickets or corporate entertainment packages.
A spokeswoman for Locog says that as there are still five years to go: "It’s not something that has yet been finalised. We have to work on the whole ticketing strategy."
About 8 million tickets will be available for the Olympic Games, with another 1.5 million for the Paralympic Games. Locog says details of how to purchase tickets will be announced nearer the time.