There’s a new and growing driving force in marketing. Pulling together recent statistics and expert comment, Alex Smith looks at the continued growth of experiential.
It’s no secret that there’s currently a sea change taking place across marketing and advertising. The good news is that spend is up – 10.7% in the UK, according to the IPA Bellwether report for the second quarter of 2016 – and has been rising for the past three years now. More interesting is what’s driving this trend. Perhaps surprisingly, the main catalyst is real world marketing (events and experiential), with an impressive 13.4% increase in investment. Unsurprisingly, digital marketing follows closely behind with 10.9%, then come main media advertising (9.3%) and PR (2.3%). No other specific discipline posted increased investment.
Is this just a blip; a random quarterly leap?
No, investment in real world marketing, as monitored through Bellwether, has been rising each quarter for over two years. Widen the research net and the sheer force behind experiential becomes astonishingly clear. According to the Pearlfinders Global Index 2016, the number of brands looking to investing in the discipline was up 40% on 2015, which itself reported a 56% rise in experiential activations over 2014. Meanwhile, 75% of brands admitted to growing their experiential budgets in the Event Magazine Power Brands Report 2016, with 50% anticipating further rises.
The Pearlfinders Global Index summed up the situation well, saying: “Experiential has come a long way from the sample-driven add-on it once represented. It has become a key player within brands’ marketing communications and this growth looks set to continue.” A long way, indeed!
As to where this extra experiential spend is coming from, 66% has transferred from other disciplines, while 34% is incremental, according to the Event Power Brands Report 2015.
Other signs of experiential’s continued rise include the fact that, since 2012, the number of agency start-ups has exponentially grown with a disproportionate number of these within the experiential space.
There is also a clear trend in agency positionings being updated to embrace experiential activation, from Leo Burnett’s ‘Acts Not Ads’ to AMV Live Experience, JWT Live, among others. What’s more, leading marketing and advertising bodies the Marketing Agencies Assocation, the Institute Promotional Marketing and ISBA now offer dedicated experiential training, an industry code of conduct is being planned and experiential award categories have doubled since 2013.
On the radar
So how has a marketing discipline that was fighting to be recognised as such only a decade ago suddenly found itself firmly on the brand radar above most others?
A key factor is the growth of its close marketing spend running mate digital. The rise and increasing sophistication of the internet and social media has enabled live experiences to be amplified exponentially in terms of reach, hugely increasing the discipline’s cost efficiency. Meanwhile, the content is perfect for consumers’ hunger for authenticity and ‘reality’ from brands. Technology and social have also made the effectiveness of experiential easier to measure. Plus the discipline fuels word-of-mouth recommendation, creating the advocates that brands currently crave more than ever.
This is reflected in research examining experiential’s effectiveness. It topped the poll for ‘most effective marketing tactic’ with 72% of the vote in the Content Marketing Institute’s Content Marketing in the UK 2015 survey. Furthermore, when brands were asked for their top three most effective marketing mediums for the Event Magazine Power Brands 2015 report, experiential came out on top.
One brand that has significantly increased its investment in experiential recently is The Economist.
“The real world is proving to be a key space for performance brand marketing,” says Marina Haydn, the publication’s Senior Vice President, Circulation and Retail Marketing. “I’m delighted that our experiential strategy. By using our content and turning it into a real-life activation we can speak to our potential readers in a more exciting and interesting way. Experiential has been a fantastic method of not only changing brand perception, but also converting to subscription. The success is that it’s a genuine experience, people are taking it home with them and talking about it, and there’s a conversation taking place.”
As well as growing its own spend levels, there is also evidence to suggest that experiential has had a hand in maintaining digital’s position at the top.
Experiential and digital channels are not mutually exclusive. There is a popular view that the growth in experiential is contributing to the growth in digital, because: digital/social mechanics are most commonly used to amplify experiential; digital strategies allow data-capture and enable brands to create an ongoing conversation with consumers; and many brands are using experiential to create content to drive digital campaigns.
What’s more, most of the statistics quoted above tend to be based on the more conventional definition of experiential, focused on live face-to-face interaction. By extending the discipline to encompass all ‘real world activations’ – brands creating or doing something in the real world – the growth is likely to be even more pronounced.
As the broader definition and understanding becomes more prevalent and accepted in the market, future reports and statistics are likely to paint an even more positive picture of experiential marketing.
So with investment predicted to climb further and experiential increasingly placed at the heart of many campaigns, it would appear the discipline is primed to go from strength to strength.
“We’ve been tracking the meteoric rise of experiential as an effective channel in recent years,” says Mike Thorne, editor at Pearlfinders. “Buoyed by sponsors’ increasing activation budgets and better ROI tracking, the number of brands investing in this area will continue to climb through 2016. More significantly, we predict that the scope and scale of projects will also grow.”
Alex Smith is Planning Director at real world marketing agency Sense.