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What exactly is experiential marketing and how can brands effectively utilize it to increase consumer engagement?
According to a recent survey, one in three CMOs is expected to allocate between 21 and 50 percent of their budget to experiential marketing over the next three to five years. This surge represents a fundamental change in how marketers of all industries should approach their campaign.
Ironically, experiential marketing is the industry’s attempt to overcome its own weight: consumers are so bombarded by constant advertising that they usually filter it out as noise. Content overload has shrunk the average human attention span to a measly 6 seconds. Experiential marketing, utilizing 360-degree physical environments, cuts through this noise to create a lasting impression.
Another contributing factor is the convenience of ecommerce, which continues to be the growth engine for many industries. As sales move online, physical brand stores are taking on a new purpose: in addition to being points of sales, they are becoming places to differentiate through experiential—fully realized and all-encompassing spaces to convey each brand’s essence.
Spawning from these trends, experiential has grown to become an essential part of the marketing mix that leads to stronger differentiation and impact.
That sounds great except only brands with massive marketing budgets can bankroll the expensive stages, props, actors and MCs required for an experiential marketing initiative—and all of these costs are often spent on a one-night affair, to be torn down the next morning. So what about the rest of us (without overblown marketing budgets)?
As it turns out, there are several lessons that we can take away from the rise of experiential marketing, actionable by smaller brands and marketers of other practices. Because the truth is that experiential marketing isn’t effective just because it utilizes all 5 senses—it actually goes one layer deeper. It’s the mental engagement of a personal experience that creates a lasting experience, and this is something that all digital campaigns can (and must) capitalize on.
The low-hanging fruit for digital marketers is technological innovation like AR and VR. MADJOR launched the new Logitech G29 Driving Force with a VR experience, placing guests in the passenger seat of a car being driven by legendary Drift King Keiichi Tsuchiya. Viewers could experience the thrill of owning the new driving wheel in an immersive environment—one far more compelling and on-brand than an informational. As the wheel was made for gamers with proclivities toward technology, VR was also fitting format for the target audience.
Oculus, the American technology company founded in 2012, specializes in virtual reality hardware and software products. The company was acquired by Facebook for a valuation of $2 billion in 2014.
The key, then, isn’t that experiential formats should be novel, though that does help. Rather, format needs to reflect the brand and its audience.
For instance, user generated content is hardly a new invention, but its usages constantly evolve to bring strong engagement. User generated content is, by definition, a form of engagement. Anytime a user creates a piece of content, they are engaging in it. But most brands simply implore viewers to “leave a comment” on a social media post. These open-ended calls to action reveal a superficial understanding of user generated content and its benefits.
On the other end of the spectrum, Starbucks’ campaign “Say it with Starbucks” (用星说) allowed guests to gift coffees to friends with a personalized message after being primed by the selection of a standardized holiday message. This input, however small, forced users to examine their relationship with the coffee receiver. In doing so, Starbucks was able to enhance its brand image as a relationship facilitator and avoid becoming a commoditized present.
The "Say it with Starbucks" Campaign Visuals. (Photo source: Starbucks China)
Digital marketers can also leverage new data points to contextualize their content and add value to customer journeys. MADJOR conceptualized a system of context-based reminders for the travel company Thomas Cook. Using this system, if a Thomas Cook guest was A) a seafood lover and B) near a restaurant C) around dinner time, Thomas Cook would send a text about the restaurant’s current deals on its seafood selection.
Had the same text been sent indiscriminately to all Thomas Cook travelers, it would have been just another noisy advertisement. But through temporal and spatial contextualization, a simple informational text takes on greater meaning; it drives the customer journey forward and gives it more value. As for the Thomas Cook brand, the text exemplified one of its core values: inspiration in travel activities.
This example delineates the fundamental exercise of digital experiential: to find the brand’s unique value proposition within the customer journey and seamlessly integrate. And on this front, many experiential campaigns fail, and they end up wasting their budget on things that are off-brand (promoting attributes not unique to the brand) or customer journey-deaf (registering too clearly as marketing material.)
MADJOR's system of context-based reminders created for Thomas Cook. For more details, visit "Cases" on our official website.
Fatefully, experiential marketing is not just a reaction to digital trends but a utilizer of them. The direct effect of most experiential campaigns is limited by the size of the venue and its hours of operation (as constrained by budget). But these costly set ups are justified by the amplification of each brand experience through social media. Experiential marketers are well aware of the fact that recommendations from friends are the most credible form of advertising (with an 84% rate of trust).
And as consumers’ social media content becomes more incessant (in China, the average consumer spends an average of 8 hours per week on social media), this trend will continue. Traditional, centralized marketing will no longer be effective because it will be crowded out by friends’ content.
The upshot is that brands will be forced to think only in terms of what is “shareable.” While this question has been constant fodder for brainstorming sessions since the rise of social media, the definitive answer is more apparent due to the rise of experiential: people will only share brand content that has affected them, things they have a connection with—personal experiences. It’s incumbent upon brands to provide these experiences to stay relevant.
For digital marketers, this paradigm shift is especially important as it could make or break a campaign, even as it does not necessarily call for an increased budget.