Welcome to Event Business Intelligence, your weekly source for deep dive insights on growth, strategy, measurement, innovation and M&A for owners of event businesses and executives responsible for event P&Ls.

In today’s newsletter:

• Agency Acquisitions Increase

• Update on the ROO-ROE-ROI Debate

• Using Attribution Models to Drive the ROI Conversation

• Sample Attribution Model 1: Sales Incentive

• Sample Attribution Model 2: Client/Prospect Conference

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Notable News

• Agency Acquisitions Increase. Last week, Opus Agency acquired the Australian events agency The Company We Keep, expanding it’s footprint in the APAC region. I know of two other agency acquisitions that will be announced very shortly, and several others that are in the works. A number of the buyers in these transactions are private equity firms who are investing in the industry for the first time. This all points to increasing consolidation in the agency space. For decades we’ve been begging to be taken more seriously as a profession. Well, we’ve got people’s attention now.

• Global Eventprofs Cautious About U.S. A couple of weeks ago I attended a Linked In Live session on key trends & opportunities in the U.S. exhibition sector, hosted by Matthias Tesi Baur of London-based MBB Consulting Group. When he asked what to make of the rapid-fire pace of Trump’s executive orders, particularly tariffs, two things stood out to me. One, the level of concern held by those outside the U.S. about all the changes happening here. However chaotic it may seem from inside America, it’s even more so outside. The uncertainty is making people anxious about business decisions moving forward. Two, the U.S. panelists did a valiant job trying to offer a sense of calm, but struggled to provide a clear roadmap of what lies ahead, because there isn’t one. The U.S. exhibition market is still incredibly strong, and offers enormous opportunities for investment, but we may be in for a bumpy few years as the ripple effects of Trump administration actions work their way through the economy.

Update On the ROO/ROE/ROI Debate

I got some pushback on my last article on why concepts like “Return on Objective” & “Return on Experience” are meaningless terms (though not nearly as much as I was expecting). Most of it was semantic, with people mistakenly thinking I meant that using ROI only worked if you were making money at an event, and that many events can, and do, achieve non-monetary objectives, so let me clarify my point.

Return on Investment is not merely reserved for events that generate money. You do, however, need to assign some monetary value to the results, in order to evaluate whether the return was worth the investment. Granted, it’s not always an exact science, but it can be done by working with your client to assign a percentage of impact on achieving those objectives that can be attributed to the event, which I outline below.

What you can’t do, however, is calculate an actual return on objective or experience. Anyone who claims to do so is probably measuring ROI and calling it something else. The definition of return is the profit on an investment. Objectives are simply used to determine what kind of return you’re seeking. If the objective of exhibiting at an event is to raise brand awareness, than ROI needs to measure that brand awareness.

You can say, “did we achieve our objective”, but only ROI lets you know whether it was worth it, because it factors in your investment (whether that’s time, money, focus, etc.) ROO and ROE, by their definitions, do not factor in any type or level of input. If I spend $10 million on a booth at a trade show and give everyone free massages, a $2,500 bottle of Pappy Van Winkle bourbon, and a meet & greet with Taylor Swift, I sure as hell will have achieved my objective. But when I factor in my Investment (what I spent to achieve the objective) it's obvious the ROI is a disaster.

Attribution Models

Say you’re running an incentive event, where the top 100 sales people get to go on a cool trip to an exotic locale. The event isn’t making any money per se, but you can still run an ROI calculation. If your objective is to motivate the sales team to hit their revenue goals, the ROI conversation might go like this:

1. What level of sales could we hit without an incentive program?

2. How much could we increase that through the incentive program?

3. Is that incremental increase in sales, as a result of the incentive contest, worth the cost of the incentive event?

4. In other words, was there a more efficient way to achieve this same increase in sales? E.g. Could we have gotten the same results by taking half of what we spent on the incentive and simply giving it out to the top sales people as a bonus?

5. Are there other benefits of the incentive program beyond just hitting the sales goals? E.g. Does the incentive program improve sales person retention and/or customer service?

The X factor here is determining how much of an impact the incentive program has on increasing sales. It’s probably not 0%; that would be one shitty incentive plan. And it’s probably not 100% either; other factors could include the salespeople’s inherent talent, strong managers motivating the team, product improvements, better marketing, etc. The answer is somewhere in the middle. But how do you pick a number? The solution is to run several variations of attribution models.

Attribution models are used to assign a percentage of the credit for a sale to the various stages or touchpoints a customer goes through to get there. They’re most often used in digital marketing for new customers who may have multiple interactions with a brand (search results, paid search ads, social media posts and ads, website clicks, etc.) Google Analytics offers several types of attribution models to choose from (e.g. Last Interaction, First Interaction, Linear, Position Based, etc.)

Face-to-face events may be only one of many such touchpoints, but they are usually the most important ones, because of the depth - and duration - of engagement with the customer in an environment you largely control. Events are high-cost, but also high-touch. So we need to attribute some percentage of the sale credit to the event, however imperfect it may be. Only your client can agree on what that assigned percentage is, but you can help them by presenting several scenarios

Attribution Model for Sales Incentive Event

Circling back to the sales incentive example above, let’s assume the following:

• # Sales people going on the incentive trip: 50

• # All people going on the trip (including spouses & non-sales staff): 120

• Total cost of incentive trip: $750k

• Cost per sales person: $15k

• Total sales for entire sales team: $87.5 million

The grid below shows how we might calculate the ROI for this sales incentive program, with 18 different scenarios for discussion purposes with your client.

If you want the attribution model calculators used in this post, email me.

In Column B we have a range of % increases that the incentive could achieve, from 2.5% to 25% (the head of sales can give you these numbers to plug in). Columns E, F and G show three sample levels of attribution: 5%, 10% and 25%, meaning the sales incentive was anywhere from 5% to 25% of the reason for the sales increase. The shaded areas in red and green show the loss or profit for each scenario. So a conversation with the sales leader might go like this:

• If we only get a 2.5% sales increase, the incentive loses money at all three attribution levels.

• If we get a 20% sales increase, the incentive makes money at all three attribution levels.

• If we get a 10% sales increase, the incentive loses $437,500 at a 5% attribution level, makes $875,000 at a 10% level, and makes $2,187,500 at a 25% attribution level..

At this point the ball is in the client’s court to determine whether these assumptions and scenarios justify the investment in the incentive program. The whole reason for running this exercise is to have the data you need to conduct a business conversation with your client, positioning you as a trusted advisor [Ironically, it’s usually only when an incentive program is eliminated, due to cost cutting, that a drop in sales is felt and the ROI of an incentive program is proven.]

Attribution Model for A Client/Prospect Conference

Now let’s look at building an attribution model for a client-facing event, in this case a conference hosted by an investment bank with the following details:

• Average fee generated by a deal: $2 million

• Event cost: $600,000

• # of Deals attributed (in some degree) to the event: 2-12

The grid below calculates the event ROI with the number of deals closed ranging from two to 12, and attributing the event impact from 1% to 40%.

👉 You’ll want to have the far ends of the attribution percentages be somewhat unreasonable, to get your client to establish realistic parameters. In this example, your client might say “I know the conference contributed more than 1% toward getting these deals closed, but 40% seems way too high.” That’s good. Now you’ve got buy-in that a workable attribution percentage is somewhere in the middle.

Next ask your client how many deals could potentially have been influenced by meetings held at the conference, information she can easily get by talking to her team. For clarity, I’ve also used the Conditional Formatting feature to have the cells automatically highlight in green if the calculated attribution figure is greater than the event cost, and red if it’s less than the event cost. This doesn’t mean if the cell is green that the event has a good ROI. As I’ve said in a previous post, ROI is a relative concept, and used for comparison purposes. An event might deliver positive ROI and still not be repeated, if there are better returns from investing that time and money elsewhere.

👉 One other point: be prepared to have a conversation about defining event costs. Planners typically focus on external expenses like the venue, catering, audio visual, etc. However, the internal time of the planning team needs to be taken into account too, as well as the time the bankers will spend preparing for, and attending, the event. You don’t have to necessarily include these costs in your calculations, but it’s important to show your client that you’re aware of them.

Conclusion

Attribution models are useful in assigning how much value an event had in contributing toward a specific goal. They are never an exact science, but as with most event ROI, an imperfect model is far better than no model at all. More importantly, attribution models can be a vehicle to engage in a strategic conversation with clients about how the events you work on drive the broader business goals of the organization, which is at the core of being a trusted advisor.

To get a copy of the ROI calculators used in this post, email me and I’ll send it to you.

Here’s to taking your event business to the next level!

Howard Givner

Thanks for reading! Please give me feedback by hitting reply.

Catch up on recent articles:

• Why Return on Objective & Return on Experience Are Meaningless Terms

• How Much Is Your Event Agency Actually Worth?

• AI Is Creating Winners & Losers In Events: Which Will You Be?

• How to Help Your Clients Define, & Weight, Their Event Goals

If and when you’re ready, here are ways I work with event business leaders:

• Business Diagnostic & Company Valuation

• Measurement & ROI

• Growth Consulting

• Exit Planning

• Business Coaching & Owner Accountability

• M&A (Buy Side & Sell Side)

Wanna chat? Email me, or schedule an intro call.