ROI formula: how to calculate the investment return of a trade fair
Measuring the investment return of any budgeted action put forward with the will to promote ourselves is not a given, and so it requires plenty of time to crunch the numbers, something of increasingly difficulty when the campaign is offline. In this case, it won’t deliver measurable direct records as it will in online campaigns.
In the case of trade fairs and congresses participations, our numbers won’t stand out even months after the fair, which we find out after putting aside the profit made from direct sales from the tailored-made designer stand during the fair
Should we then refrain ourselves from calculating the ROI in the case of a participation in a corporative event? Far from it. Any campaign that requires significant investment, unless the objective is other than economic, must be measured. Not only to find out the expenses and benefits, but also to establish parameters to help us know the effectiveness of a campaign and therefore, be able to rerun it and rectify it accordingly.
Thus, although the results are nothing but a number to take into account among many others, we should never ignore how to measure the investment in a fair. We should not dread this detail either, since as we will see, it is easier than expected when the inputs are the right ones.
For this purpose, We, Contemporanea Eventi, and as part of our commitment to help you beyond the design and assembly of a stand, would like to outline in this article how you can measure the success of a trade fair marketing campaign.
How to calculate the ROI in trade fair marketing
Regardless of the use given, first, we should be very clear on how the investment return is calculated. To this end, the following formula must be applied:
(Net profit / investment) x 100
Let’s consider an investment of €150,000 for our participation in a trade fair, which would include stand design, logistics, promotional material, and staff, to name a few; three months after the fair we calculate that new contracts are worth €450,000. The calculations to be made months after the fair, with the objective of correctly assessing its impact, indicate that there is a net profit of €300,000 (€450,000 – €150,000), which we will divide by the invested €150,000 and multiply the result times 100. This way, we get a ROI of 200%, or in other words, we would have doubled the investment.
Factors to include and exclude when calculating the investment return of a fair
What should be born in mind when using this formula in trade fair promotional campaigns is that the result is not the final grade that will determine if our fair or congress participation has rendered or not a profit. As we were pointing out earlier, measurements based on exact data delivered by for example, Google Ads, where these specific sales come from this specific ad, are not the same as measurements based on more abstract data that could arise from either offline or online sales after a trade fair.
When should I stop calculating those contacts made at the fair? Have all fair contacts been properly identified, or have they been diffused by the word of mouth? Are there other related benefits such as partnerships or free media exposure that could not be included in the formula? The answer to these and other similar questions gives us an idea of how abstract this type of exact measurements are when assessing the ROI after a congress or a fair.
Therefore, as a phase prior to calculating the ROI, we should determine the factors, to be included and excluded, that will help us achieve a more or less positive resulting amount different to what it has initially delivered, if compared to our final objective.
Do not stop at the point of profitable or unprofitable: reach a conclusion
Following with the example given above, we can sense that a 200% return is in itself a positive fact, and therefore, we should get a positive experience from being part of the fair. However, in the case of all efforts being focused on achieving contacts over direct sales, a low or even negative ROI could be easily compensated by the success of gaining 1,000 new contacts, which consequently would deliver revenue later on, rising our net profit.
In this case, the profitability of our participation will be determined by our own capacity to take economic advantage of these 1,000 new contacts by monetizing their value. To this end, a posteriori, you could calculate the cost-effectiveness of these contacts by calculating the average of the benefits provided by each one of them in a certain period.
But as we have been slowly examining on this blog, trade fair and congresses marketing is not only about earning money directly. For instance, those attending the MWC should not only think about increasing their sales, but also about the excellent reputation and impact acquired by being part of the world’s largest mobile technological fair.
Check, explore and assess all factors beyond the direct ROI
We could sum up by saying that the return on a fair investment is rather abstract, however, neither should it be ignored nor considered an absolute value.
As a result, we should try to avoid the mistake of equaling the end of the fair and profitability, and continue to reap and measure its possibilities. How many more contacts have I made in the first month after the trade fair? Do I have the opportunity to ask and know if the sales are linked to my participation in the fair? Has my online positioning improved thanks to my online promotion or that congress promotion undertaken by third parties?
In short, what this is all about is to level the ROI and your short-term and long-term objectives and consequently, be able to know if the experience has been positive or if we should try again. Would you let us help you improve it year after year?