No matter what industry you’re in, or what your to-do list entails, there comes a time when you have to prove that your work is having a positive effect on the bottom line. Measurement strategies can vary widely from company to company, but one of the most meaningful is return on investment, or ROI. ROI is a versatile performance metric used to understand how much return, or profit, you’re getting from how much you invest.
It may surprise you that many organizations that utilize media and AV teams aren’t utilizing this key metric. Despite the explosion in data analytic tools available, the results from our 2016 Media & AV Insights Survey show that only four in ten media and AV organizations are currently tracking the return on investment (ROI) of projects. That’s a significant amount of companies who aren’t proving their impact on the bottom line.
A big disconnect exists, however, as CEOs have made it clear that more effective use of data and reporting is expected. Seventy-five percent of CEO respondents to our survey want their team to report each project’s return on investment.
Is tracking ROI in this industry challenging? Yes. But, with the right perspective, cost analysis and performance metrics in place, media and AV organizations can take advantage of this tremendous opportunity to prove their value, and get the executive buy-in they need to grow.
To effectively measure ROI, first you have to understand how your team, and its specific goals, fit into the overall company’s corporate goals. This means it’s time to zoom out.
While you may measure each of your media and AV project campaigns cost against your own success metrics, you also have to be aware of how this rolls up into overall corporate revenue goals. For example, your team may know how much an internal email blast costs, and how many opens you want it to receive, but how does this translate into the company’s overall revenue goals?
This type of integration requires thoughtful planning, but is a strong step toward having a better understanding of how media and AV ROI fit into the big picture.
What Does Success Cost You?
To put it simply, you can’t accurately measure ROI unless you have a clear picture of how much you’re actually spending. It’s important to consider:
- On what specific items are my resources being spent?
- Do I understand the basic accounting and economics of my team’s operations?
- How much does each line item cost?
Media and AV teams need to diligently capture the costs of their projects before they are able to understand if their efforts are having a positive impact. This means tracking everything from equipment rental prices to post production facility costs to workers’ hourly rates.
When it comes to the people on your team, whether they’re full-time or independent contractors, tracking their ROI is challenging. How do you track the “return” on people? Especially those whose jobs focus on being creative, offering fresh ideas and producing intangible results (e.g. feelings or emotions!)? While talent-driven metrics like these can’t easily be rolled up into a pretty ROI package, sometimes as a media and AV leader you too may have to get creative.
Can you present more qualitative results alongside hard numbers? How can you make sure you’re keeping track of all the subtle creative efforts your team is making on their way to delivering a final media and AV product?
KPIs are key
Establishing Key Performance Indicators (KPIs) for media and AV projects ahead of their kick-off is a solid start to understanding ROI. Often, deciding on what KPIs to measure depends on how creative or technical the operation is. Then, you can strategically balance what measures you want to include from both sides.
It’s important to note that KPIs are most effective when all teams involved mutually agree on them before things get underway. By knowing ahead of time what you’re trying to achieve relative to what you’re spending, your team can prove the value of key deliverables.
A few examples of meaningful KPIs for media and AV teams to measure against cost include:
- Audience reach – How many people did a video, for example, reach? Do you have the ability to track impressions, views or opens?
- Allocated project time vs. actual hours worked – Did the estimates you made for how long a project would take come in under the amount of time it took to execute?
- Technical discrepancies – If you outsourced a media and AV team for a conference, for example, did you keep a running list of any errors or miscues?
Or, if you support your organization’s conference and meeting room operations, are you tracking technical issues that occur against the total meetings supported?
- Innovation offers –Does your media and AV team consistently offer innovative solutions for complex problems? If so, are they able to do so in a cost effective manner? Think about how your creative people provide counsel and guidance under pressure.
Unfortunately, there isn’t a magic bullet formula for tracking ROI. All organizations are vastly different, with many moving parts, people and projects. While measuring ROI can be challenging for media and AV teams, the extra effort is worth it; executives are hungry to see media and AV value in terms of the bottom line. From entry-level PAs to those in charge of whole departments, it’s time to seize the opportunity and prove how their work moves business forward.