Measuring return on investment in the Arts can be a straight forward process if done with the right tools.
I recently attended the Australia Performing Arts Centres Association (APACA) Conference, ‘Harvest’ (Hobart, Australia).
Assigning a value to art is essential when justifying grants, which often ask for an estimation of the return on investment (ROI) that would be the result of funding. The ROI is an important measure for the value of marketing costs and production costs. However, in the arts, the value of an output cannot be measured solely in terms of monetary profit. The criterion for assigning value might not be the number of tickets sold or the amount of financial gain. Consequently, arts organisations must find a more appropriate method to measure ROI.
At the Hobart APACA Conference, a way of measuring ROI was presented that went beyond revenues and attendance. In his presentation ‘Culture Counts,’ Chappell argued that ‘no consistent definitions’ existed to measure the value provided by works of art. Two people may both buy tickets to see a play, so both would have invested the same amount; for one, the experience he or she gets for the price of admission may have a profound impact, while for the other, it may not.
According to the Department of Culture and the Arts of the Government of Western Australia, impact in the arts should be measured in terms of (a) ‘the intrinsic value relating to the value of the culture to the individuals, which centres on how the experiencing arts and culture affects us in an emotional sense’; (b) the instrumental value relating to the economy and social goals; and (c) the institutional value that society collectively places on culture now and in future generations
The presentation by Michael Chappell showed the regional venues a technique for measuring impact by asking audience members to complete surveys using iPads. The ease of use the Ipad survey makes them a reliable tool for use and Culture Counts is investigating the best possible survey tools. These surveys can be distributed by foyer staff and art exhibition attendants at strategic moments as people depart or visit events.
Gathering the results electronically allows the companies to gauge the events’ impact immediately. Companies may find that some events may draw a smaller audience but have a higher intrinsic or instrumental impact. These data are all important when the marketers analyse ROI statistics on show and attempt to justify bringing certain shows to market.
The diagram in shows how value is calculated and is an important consideration when considering ROI, especially in the context of allocating funds to a project. The system is relatively inexpensive and can easily be assessed by the companies.
Australian regional arts companies play a unique role in their communities. They can use these tools to determine the value of an artistic event for the local people. Centres have a strong chance to create value for the communities, measure it in reports, and shape programs that best enrich all aspects of the community.
At Arts Marketing Australia we provide ROI information that accurately reflects your entities needs.