Agencies Everywhere See Experiential Marketing as the Next Big Thing, and Brands Want In.

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Clients invest more, and competition increases among creative shops.

Salesforce built a tech village for its Dreamforce 2016 mega-event in San Francisco.

Advertisers haven’t had to look too far for negative news lately. But as broadcast spending dips and clients question the safety and effectiveness of digital buys, more and more agencies are turning toward a rare bright spot in the ad world: experiential marketing.

“Experiential work is where the rubber hits the road—where advertising meets the Amazon review, quote unquote,” says Denise Wong, president of George P. Johnson Experiential Marketing. “We can not only go out with a brand’s message and promise, but give consumers a chance to try it.”

“Two or three years ago, clients saw it as an incremental spend. Now they’re moving dollars previously slated for media or broadcast into experiential.”
-Denise Wong, president of George P. Johnson Experiential Marketing

This sort of work sells both products surrounded by experiences and experiences doubling as products. And brands want in on it.

“Yes, brands are definitely starting to invest more in experiential projects, and you’re seeing more competition from highly creative smaller agencies,” says Debbie Kaplan, evp of experiential marketing at WPP’s Geometry Global. “Ad and PR agencies are all jumping on the bandwagon.”

“Two or three years ago, clients saw it as an incremental spend,” Wong reveals. “Now they’re moving dollars previously slated for media or broadcast into experiential.”

One might attribute this change to basic human nature. Consumers can easily skip, mute or block TV and digital ads, but attending an event or absorbing an experience is a decision. In many cases, it also constitutes a purchase—even if the currency is time or the sort of behavioral and demographic data marketers crave.

“I’m not here to say that traditional channels are dead, but 89 percent of ad content is ignored by the consumer,” says AgencyEA co-founder Fergus Rooney, whose Chicago firm has seen clients increase their experiential spend by 10 to 14 percent year over year. Wong attributes much of this change to the “value of sharing an experience with somebody, which you can’t really do when you’re watching an ad,” as well as the wide range of content that springs from each event.

Giant Spoon project manager Patrick Jong puts things a bit more succinctly: “No one is tweeting or posting about a billboard.”

At Comic-Con in San Diego, the Blade Runner 2049 Experience presented by Johnnie Walker had fans chasing VR replicants.

In almost every case, that’s true—but MullenLowe Open global CEO Anthony Hopper also sees experiential complementing conventional creative rather than displacing it. “The line between traditional and experiential is becoming blurred,” he notes. “More often than not, our events can be turned into ads and broadcast through either digital platforms or TV.”

Rooney, who got his start in catering, now handles projects that range from planning the annual MillerCoors Distributor Convention to setting up a temporary tattoo booth for Clif Bar at the Pitchfork Music Festival. Hopper’s team at MullenLowe Open recently livestreamed a five-man Royal Caribbean cruise to Times Square tourists via Periscope. And for the past eight years, George P. Johnson has managed Dreamforce, a three-day tech spree in which 175,000 would-be thought leaders descend on San Francisco, bringing traffic to a halt while bonding over the not-so-dark arts of IT and email marketing. Past attractions have ranged from a Tesla raffle and a street covered in astroturf to a life-sized bust of Salesforce CEO Marc Benioff made of Legos.

You’re invited to a VIP-only private party

The pivot from party planning to brand experience design didn’t happen overnight. Los Angeles-based lifestyle marketing agency Cashmere organizes star-studded activations for brands like Adidas, Universal Pictures and Uber Eats, along with promos for longtime client Snoop Dogg. But the group started with what evp and chief creative officer Ryan Ford calls “street teams” hired to design and distribute flyers promoting area hip-hop shows.

“It’s experiential marketing on a very small level,” Ford says. “You have to know where these people you’re trying to target are hanging out, and you can design the flyer in a way so that they will still look at it even when it’s on the sidewalk.” All marketers can relate to this endless search for impressions.

“I’m not here to say that traditional channels are dead, but 89 percent of ad content is ignored by the consumer.”
-AgencyEA co-founder Fergus Rooney

“For a long time it was seen as ‘we’re gonna set up a booth in the mall with a Toyota Camry and let people experience that,’” says Ford, who ties the rise of experiential marketing to festival culture and, of course, the internet as a great equalizer. Today, an agency like GPJ can drive a brand-new Dodge Demon from a flaming cage onto a drag strip in the middle of the Hudson River as Vin Diesel, Wiz Khalifa and 55,000 remote viewers look on.

“When I first worked on experiential, it was immersive brand events without the ability to connect to a broader audience,” says Hopper. Then Red Bull blazed a trail in sponsoring motocross and cliff-diving stunts rather than blanketing the airwaves with ads. “Now it has trickled down,” says Ford. “You’d better include an experiential element in your marketing or it won’t have that 360-degree effect.”

Jong compares this evolution to the music industry, where streaming has forced artists to double down on concerts and merchandise to make up for steep drops in record sales and paid downloads.

That looks great, but how much will it cost?

Experiences may draw more dedicated eyeballs than most TV spots or banner ads. But CMOs feeling the budget crunch want more proof that their millions are paying off.

The need for numbers is nothing new, and Rooney cites old-school offerings like AmEx points and hotel loyalty programs, saying, “A customer who spends $1 outside the loyalty program will usually spend $9 within the program. That is experiential at work—the measurement of that experience and the conviction of the customer saying, ‘I want more.’”

Measurement remains more art than science, but nothing speaks louder than statistics, and simply listing shares and hashtags or basic attendance totals isn’t going to cut it for a major brand.

Speed is also an issue. “The difficulty for us is in just how quickly the client expects the activity to pay back,” Hopper notes. “Now we have more agile or popup activations, because they deliver the numbers more quickly.”

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