A new report from the Association of National Advertisers and PQ Media proves once again that experiential marketing shows no signs of slowing down.

According to their study, brands spent more than $560 billion on activation marketing in 2015. That figure represents 59.8 percent of their total advertising budgets and is a 5.5 percent increase over spending over 2014. Brand activations are expected to grow by six percent in 2016, putting the total spend on experiential close to $600 billion.

This information reflects consistent data from the EventTrack survey, the longest-running survey examining the experiential marketing industry. Data from that study shows experiential marketing increased by 4.7 percent in 2013, 5.4 percent in 2014 and 6.1 percent in 2015. Part of the reason for this growth is that brands find experiential marketing so valuable their funding it out of their corporate budgets, not just their marketing budgets. One reason survey participants said they liked experiential marketing was that the return on investment was so high. Twenty-three percent of brands said their ROI was 3-to-1; 16 percent said it was 5-to-1; and 12 percent said it was greater than 20-to-1.

“Experiential Marketing is arguably the most exciting discipline in the entire marketing mix today,” says Michael Fernandez, founder of the widely-respected experiential marketing agency Factory 360. “It’s the only high quality brand connection that you know for sure is connecting to an actual consumer vs. a bot, an empty living room or an otherwise disengaged audience. The future is experiential marketing bringing new consumers to your brand in the most personalized way.”

Do an online search of “experiential marketing” and you see that new brands – even whole new fields – are getting into experiential marketing all the time. Hotels have been slow to adopt event marketing but are starting to use it to engage with consumers more. Cell phone companies are moving beyond event sponsorships and planning really fun events. Banks are breaking out of their conservative shells and finding new ways to interact with consumes in a meaningful way.

You also see that brands are doing incredibly creative things with experiential marketing. Over the past three years Kraft eschewed the product sampling that’s so popular with food companies (and rightfully so, we should add) and ran a more in-depth experiential marketing campaign that increased sales and provided a meaningful reward to consumers. Entertainment companies such as MGM and TNT have used movie action and special effects to create highly memorable events that later received millions of YouTube hits. And then there are companies like Red Bull and Bud Light, where experiential marketing has become an integral part of their whole business model.

Why are so many brands turning to experiential marketing? Because it works. Experiential marketing does a great job of capitalizing on the things that make any marketing campaign successful. It appeals to people’s emotions. It allows consumers to experience products with some or all of their senses. It creates a positive association between consumers and brands.

Experiential marketing also works well with changing values, demographics and resources available to brands. Many people (especially Millennials) place more value on having experiences than buying things. More people are attending things like music festivals, fashion shows, community fairs and trade shows, which means there are more opportunities to engage with people when they’re ripe for new experiences. Social media can greatly expand the reach of even a single experiential marketing event, which makes them more worth the investment.

So what do we expect to see from experiential marketing in the next few years?

  • As event or live marketing becomes more common, we see more brands partnering to extend the reach of their activations.
  • Many brands realize the best way to grow their audience is to appeal to recent immigrants to the United States or emerging markets elsewhere. As a result, we’ll see more experiential marketing events that appeal to multi-lingual and multi-cultural people.
  • Emerging technologies have great potential to change what happens at experiential marketing events. Things like virtual and augmented reality, 3D/4D experienced, holograms, robots and wearables have great potential to make experiential marketing activations even more successful.

As far as we’re concerned, the sky’s the limit for what can be done at experiential marketing events. But that doesn’t mean brands should throw together any old event and expect people to flock to it. Here are some common pitfalls we see brands encounter, and our advice for how to avoid them.

Pitfall: Market saturation

It seems unlikely that people will get tired of events anytime soon. But at some point there may be so many experiential marketing events that another trend – the one toward a “staycation” rather than a vacation or day out – will take hold more than it already has.

What’s more likely is that at some point, there will be so many music festivals, sporting events, sampling events and fairs in one weekend that consumers will have to choose which to attend and which to skip.

Solution: Make your experiential marketing event unmissable

Experiential marketing is popular enough that some consumers have a certain “been there, done that” attitude about it. Most people have been to enough rubber chicken dinners, community festivals, huge concerts and wine/beer/spirit tasting events to feel a bit blasé about going to another.

But what if instead of a dinner, you host a food truck festival that features cooking lessons from celebrity chefs and “Iron Chef”-like cooking contests? What if instead of a standard community festival or fair, you create several interactive experiences that allow people to explore the world (and your brand) in a whole new way? What if instead of a stadium concert, you invite some of your best clients to an intimate concert with a popular musical act? Consumers won’t be able to pass up the promise of your once-in-a-lifetime event.

Pitfall: Doing experiential marketing poorly

Sometimes when brands hear about new trends, they jump on them without putting much thought into them. Just look at all the poor companies that started incorporating the term “Netflix and Chill” into their campaigns without knowing what it meant.

Solution: Don’t do experiential marketing because you have to, and don’t do it at the last minute. Sit down with your marketing team (perhaps even your executive team) and think about your goals, desired outcomes, what audiences you want to reach, and how you’ll measure your success.

Then put together an event that’s high quality, authentic and provides consumers with a meaningful experience. Experiential marketing isn’t just about putting on an event. It’s about putting on an event that represents every aspect of your company’s culture and values. If your event is light-hearted and fun, consumers will remember your brand as light-hearted and fun. If your event demonstrates your commitment to environmentally sustainability or helping children, consumers will remember that your brand’s values align with theirs.

Pitfall: Trying to plan an experiential marketing campaign by yourself

Everyone is trying to save money. And no one knows your brand as well as you and your marketing team. So it makes sense to plan all aspects of your experiential marketing event yourself, right?

Wrong. Experiential marketing events can be extremely time consumers and complex, especially if you’re planning a multi-city campaign. Your staff likely doesn’t have the time to put a high-quality event together. It’s unlikely that they’re familiar with things such as hiring brand ambassadors and utilizing the latest technology to create highly memorable events. They aren’t experts in the field, so they don’t know what’s already been done, and what types of campaigns have succeeded or failed.

Solution: Hire an experiential marketing agency

The great thing about the growth in the experiential marketing field is that there are now hundreds of agencies that specialize in it. A good agency will have tricks and relationships that can save you money on your event. They can give you a fresh perspective on the best ways to portray your brand’s mission, values and products or services.

The bad thing about the recent boom in experiential marketing is that many of the agencies don’t have a lot of experience. Make sure you hire an experiential marketing agency that’s been around for several years and has plenty of good references to share with you. You should also make sure they offer the range of services you need (for example, a brand ambassador program, social media expertise and experience with sponsorship activations). An agency, just like a good plan, can make or break your experience with event marketing.

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