In an increasingly competitive business environment, companies are keeping a close eye on their expenditures. Before spending thousands or even millions of dollars on a meeting or event, companies want to know exactly what’s in it for them.

Historically, in promoting its product, the meetings and events industry has relied on the generic measure of return on investment (ROI) to demonstrate performance. Without such an objective measure, meetings and events can be a hard sell.

“Back in the day, it was inferred that there was no real way to accurately measure effectiveness in event marketing. It was more difficult to develop and get approval on budgets,” said Marilyn Kroner, marketing communications manager for Quantum Corporation. “Once we were able to incorporate some science into it, budgets were easier to develop and justify, and we had a basis from which we could determine success, and make adjustments accordingly,” she said. “I think it brought more respect to the industry in general.”

While ROI has helped the industry gain clout and further consideration when corporate marketing dollars are being doled out, some executives are finding that it is not completely satisfactory for an industry in which success does not always come in the form of money.

“Saying the only success metric is that which can tie immediately to sales is really unrealistic to use as our gold standard,” said Jerry McGee, COO of Ambassadors. For example, with a sales conference, McGee said companies would typically look at sales trends before and after the conference to determine ROI. But, he said, that does not work because sales fluctuate throughout the year for any number of reasons, which can lead to a false positive or negative success outcome.

Instead, executives are arguing that the industry measure return on objectives (ROO). “Return on objectives, I think, is a more meaningful term because return on investments conjures up immediately the though of, ‘what kind of sales did we get based on what we invested?’” said Skip Cox, president of Executive Survey, Inc.

Using ROO for the sales conference example, success would instead be measured by previously outlined objectives such as generating recall of the six selling features of the product and how it differs from the competition. Using ROO would put the meetings and events industry on a more level playing field with its competition for corporate dollars—advertising and public relations. In advertising, companies measure the reach, frequency and number of times customers viewed a particular ad. These statistics known as return on objectives (ROO) are the type of thing the meetings and events industry needs to use more.

Kroner believes both ROI and ROO can be useful tools. “Even if we are not able to measure ROI as accurately as other disciplines can, we are measuring, albeit differently, and that’s taken our profession to a different level,” she said.

Kimberley Gishler, NA marketing communications manager for ProCurve Networking by Hewlett-Packard, said she will sometimes use ROI, but believes ROO is more tangible. “I personally think ROO is a much clearer definition--I think ROI has been overused. It depends on what your objective is. If I’m totally doing it on awareness, you can’t really measure that awareness in dollars. But you can measure awareness in how many people saw a booth at a trade show,” she said.

Gishler thinks the key for the industry in competing for corporate dollars is to play to the larger goals. “I think people constantly want the dollar value out of something (meetings and events) are such a big dollar amount—it’s a huge investment.” Having a company, for instance, exhibit in a trade show could be a harder sell, because, “management doesn’t think of events as an integral part of a marketing and communication plan.”

“Management views tradeshows as a black hole, but you can actually measure more out of your tradeshow or event than you can via advertising.  It's more tangible,” Gishler said. “The meeting and event managers need to start saying, ‘I can’t be siloed. I need to be part of this more complex picture.’” She said the industry would then do well if companies look at ROO for the marketing plan as a whole.

McGee thinks the biggest challenge would be educating the industry and getting people to think not only of the logistics of events, but more strategically about the larger goals. By using ROO as a measurement will again help move the industry forward or, “we’re always going to be relegated to glorified wedding planner status.”

Tips for using ROO

1) Carefully develop objectives so they are not too broad, easy to measure and realistic.
2) Choose tangible objectives, easily understood by management.
3) Use some of the same objectives for different shows and events because annual ROO is helpful for the budget process.
4) Be honest and don’t make objectives appear successful if they were not.
5) Decide what needs to be done differently next time based on the results.