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Insight/ Branding & Communications

A New Era For Experiential Marketing

by Mercedes Cardona
Contributing Editor
CMO.com

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Article Highlights:

  • Demographic changes and new technologies have brought marketing back around to one-to-one experiences.
  • The rise of social media has given marketers new ways to tap into the voice of the consumer.
  • Technology has it possible to measure experiential marketing more effectively.

Experiential marketing has been around since the days of the traveling salesman. But with a strong assist from technology, it now it is re-emerging as the backbone of many branding plans.

“It’s been around since the medicine man, if you think of the basics around sampling,” said Charlie Horsey CEO of MKTG, INC., an experience-marketing specialist. In a way, the most basic marketing was experiential marketing, he told CMO.com.

The growth of paid media took some of the focus away from experiencing a product live, but demographic changes and the development of new technologies have brought marketing back around to one-to-one experiences. Mobile, social media, and a more empowered consumer are leading marketers to develop plans that give consumers the proverbial 360-degree product experience they can’t get from traditional media alone.

“Experiences are two-ways, and the tools we have are all over the place,” said Laura Davis-Taylor, senior VP, managing director of BBDO/Proximity ShopWork. “Samples, the trade shows, and that pop-up stuff [are] still important. It is the price of entry, but ignores the fact that people today are living in a world of virtuality. It’s not only about touching something, but touching something digitally, virtually.”

Experiential marketing has evolved from event sponsorships that were little more than venue signage and sampling to a full immersion in the product and deeper consumer engagement–sometimes with consumers creating content themselves. It’s quickly being enabled by the growth of technology, said Steven Cook, CMO of FanKix, a platform that enables marketers to amplify experiential marketing online.

“It’s an explosion of content with consumers being able to be a part of it,” Cook told CMO.com. “It’s going from push content to participative content.”

And that’s putting marketers a step closer to the Holy Grail of relationship building.

“It’s become much more legitimate. It’s not just banners around the stage,” Kevin Meany, founder and CEO of promotions specialist BFG Communications, told CMO.com. “It really has become a key component in the 360-degree marketing.”

Added Steve Stoute, founder and CEO of marketing agency Translation, effective experience marketing needs to involve the consumers before, during, and after an event: “In order for something to be an experience, it needs to have texture,” he told CMO.com.

Social Experience
The rise of social media has also given marketers new ways to tap into the voice of the consumer, insiders say. “The leverage we can get out of social media is just tremendous,” Meany said.

For example, Meany noted a recent BFG promotion with Coca-Cola and Buffalo Wild Wings; it included a location-based mobile game that generated 118 million social impressions. Forty-five percent of the players who check into the game shared content on social networks, he said.

Indeed, LiveNation, the event and e-commerce company, knows more than 60 percent of the audience at its events have smartphones, and more than 70 percent of them are sharing content from the venue in social media, said Russell Wallach, president of LiveNation Network.

“When we’re able to take brands and be part of that experience, all of a sudden we’re able to create an experiential marketing opportunity that lives beyond the event itself,” Russell told CMO.com.

LiveNation recently launched a new Web site, livenation.com, that uses geofencing. The technology curates all social media generated at an event so the experience extended to an online environment.

 “It extends the pre- and the tail. Events used to just happen. Now technology is about ongoing communications,” MKTG’s Horsey said. “It enables us to aggregate consumers, and amplify and promote advocacy.”

Translation’s Stoute noted that his agency’s Made in America tour for Anheuser-Busch worked in three stages across various media: anticipation with a commercial starring headliner Jay-Z, celebration during the two days of the music festival, and the upcoming amplification when a performance movie shot by director Ron Howard opens this spring and sets up a second stage of the promotion.

The empowered consumer has made experiential marketing a necessity in some areas, such as retail and electronics, where showrooming is turning products into commodities. And with the rise of online and mobile shopping empowering consumers to commoditize products, a tactile experience becomes a good way to set one product aside from another.

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Adding To The Experience
Demographics are also factoring in, insiders said. The rise of the Millennials as a consumer cohort appears to be powering the growth of experience marketing. The “aspirationally young” is the sweet spot for experience marketing, Wallach said.

Meany noted that BFG conducted extensive demographic research on Millennials in 2012 and found 78 percent prefer a brand experience that also gives them information. “They want a face-to-face conversation,” he said. “They felt better about a brand or product when someone would talk to them.”

And the experience has to be useful and relevant to the target audience, insiders said. “It can’t be the afterthought of the party at the Super Bowl. It can’t be the afterthought to the experience at the Academy Awards,” Stoute said. “It needs to feel bespoke.”

It can be as simple as offering event participants something they need. BBDO’s Davis-Taylor noted Federal Express offered charging stations to attendees of the South by Southwest festival so they could power up their mobile devices. That’s an excellent marketing idea for such a plugged-in group, she noted. Those little gifts are things that build “emotional glue” with consumers, she said.

“These consumers are very motivated by brands that enable them to achieve what they want—experience is a big part of that,” MKTG’s Horsey added.

But to do that right, experiential marketing has to start with deep dives into consumer research and account planning, insiders said. Wallach said every LiveNation effort starts with mining its database of ticket holders.

“We have to know where this consumer lives and breathes and how they conduct their lives,” Horsey said.

Thanks to technology and social media, it has become easier to draw up the profile of the target consumer. You can pretest a sample effort and follow up online, Meany said.

“Most consumers are more than willing to give you a name, address, and email and allow you to market to them online, so that makes them very trackable,” he said.

And with good data comes teamwork, insiders said. Experiential marketing efforts have to be put together across channels, not just by an event-planning group.

“The last thing you want to do for experiential planning is do something in a silo,” Davis-Taylor said. “There’s an opportunity to create beautiful things across home, life, store, and shelf. But you have to bring in experts around the table right up front.”

Marketers need a clear plan and vision, or else the effort becomes about the next big, shiny thing; sharp consumers–especially young Millennials–will see right through it, experts said.

Cook compared the process to the learning curve marketers have been on to comprehend and start spending money around social media.

“Experiential marketing is another area where senior marketers are going to have to be educated,” he said. “But it will happen if people see a return on investment.”

Experiential ROI
Luckily, marketers have heard the gospel of experiential marketing as a new generation of chief marketing officer moves up. Davis-Taylor noted the rise of chief experience officers at some companies as a good sign.

“A lot of the folks who are moving into the CMO positions grew up with event marketing, where before a lot of the people in those positions grew up with advertising and media,” Horsey said. “Before, they couldn’t wrap up their heads around ROI for it.”

Technology has also added to marketers’ capacity to measure and analyze efforts after the fact. While old-school experiential marketing had a “spray and pray” component based on counting media impressions, mobile, and social media generate data that can be analyzed to better peg the return on investment.

But start by agreeing on some metrics of success up front, Stoute said: “A lot of times you see brands using things like impressions as a way to satisfy a metric,” he said. “I don’t know if those were engaged impressions or were empty eyeballs.”

Luckily, technology has also made it possible to measure experiential marketing more effectively, thanks to social media and mobile analytics. What marketers are still working out is the way to bring the real and digital world metrics together.

“Right now we’re missing that physical cookie,” Davis-Taylor said. But with the growth of loyalty programs and location-based technology, such as near-field communications, soon it will be possible to get an even clearer picture of experience marketing across channels, she said.

Experiential marketing can be expensive to execute, so showing ROI is crucial, LiveNation’s Wallach added. The additional earned media on social channels can contribute to bringing down the CPM cost, he said.

“We can demonstrate it can be better on a CPM basis,” Wallach said. “What’s more valuable: You talking about your brand, or having your customer talking about your brand favorably?”

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