Experiential Marketing: A Master of Engagement

April 2, 2008

The pressure on marketers to demonstrate the value of marketing continues unabated in today's business world. Successful CMOs need to be well versed in analytics, and introduce new techniques and metrics to demonstrate the value marketing represents to the company. In addition, they need to be able to fully integrate with sales and other functions of the organization. It is in this environment that the ARF study on B-to-C and B-to-B event, trade show, and sponsorship engagement emerged.

Events and sponsorships are tools for experiential marketing that focus on customer/consumer experiences, and treat people as emotionally and rationally driven within a holistic framework of experience. Experiences consist of sensory, emotional, cognitive, behavioral and relational elements that replace or enhance functional (product) values. Event marketing uses promotional activities designed to communicate with attendees and add value to the experience; events provide an opportunity to engage with a company, its brands, and the community/industry. Events also create a business/social setting for attendees and help raise their involvement level. Marketing wisdom tells us that attendees are apt to be more receptive to marketing messages and images associated with the event than they are to those presented via other methods.

An unending debate is whether sponsorships and events are primarily sales-building or brand-building tools. Ideally, they should improve profitability by increasing both short-term sales and long-run brand demand. Given that most sponsorships and events are time delimited, the tendency is to think they only have short-term impacts. On the contrary, the power of experiential marketing is shown in this study to go beyond short-term effects to generate a longer term brand value.

Brand demand, a positive response and outcome of brand engagement, is an overall indicator of the ‘goodwill' associated with a brand. This is reflective of past marketing performance and customers' experience with, and perception of, the brand. It has components that companies can study individually, to diagnose contribution to market share over time. Knowing a brand's equity relative to competitors - and what drives it - enables a marketer to develop and implement stronger marketing programs. By quantifying the direct and indirect impacts of a sponsorship or event specifically on brand demand, a marketer can develop a clearer picture of event and sponsorship's effectiveness as a brand-building tool.

In fact, many marketers believe that live brand events are highly engaging - potentially more so than other tactics. But sponsorship and event marketers have found their budgets increasingly scrutinized, and feel that other marketing activities are getting a larger portion of the budget. Last year, a group of event marketing executives, led by Dan Belmont of The Marketing Arm, concluded that experiential marketing lacked a comprehensive method for measuring the full impact of its effectiveness. They judged that this lack of measurement put events at a disadvantage when evaluated as part of the overall marketing strategy. They asked the ARF to help them find a more definitive way to:

Measure the effects of a live brand experience on target/prospect engagement with the sponsoring brand
Ensure the metric is feasible as an industry-wide standard for evaluating event effectiveness
Develop a scorecard of engagement to turn ‘research into action' in terms of creating, measuring, and evaluating the impacts on brand demand.

Through an extensive screening process, the consortium chose Harris Interactive to study the Business-to-Consumer sponsorship events, and a partnership between Gallup & Robinson and Exhibit Surveys to study the Business-to-Business events.

Here is what we found:

Event engagement is driven by a unique combination of emotional and brand elements that can create significant positive outcomes, such as likelihood to recommend and purchase intent.

In some cases this purchase intent is highly predictive of sales1

How people feel about the brand experience, their emotional connection to the brand, and aspirational fit or brand fit are impactful elements that work together in the event and sponsorship engagement experience.
Attendees may trust claims in ads, but they socialize and learn more at events to further enhance that trust and motivate their purchase consideration and decisions.
Specifically from the B-to-C studies, driving awareness of the brand/event is almost as valuable as driving attendance
Specifically from the B-to-B studies, trade shows contribute in important and unique ways to both customer retention and customer acquisition.

Event-related advertising activities provide more reach and event-related exhibit activities provide more lift. However at some point, both influences eventually manifest diminishing returns.
The Web is an increasingly important follow-up component of trade show effectiveness.
Reaction to the Exhibit is important to driving Purchase Intent, more so than reaction to the Show. However, both are important in driving the factors that influence Purchase Intent (e.g., Brand Fit and whether the participant is a ‘Promoter' of the brand).
Trade shows have a unique viral effect. They influence the attendees, large numbers of whom also influence their peers, something that most advertising does not do. Like passalong audiences in Magazines and out-of home audience in TV, event reach calculations should go beyond just direct attendees.

Action outcomes from the research reveal that the measurement of event/sponsorship efforts should:

Focus on capturing measures of emotional and engagement-rich activities that create awareness, attract and bring people into events

Intelligence: Develop metrics that proscribe the connection between brand, event, and experience
Strength: Capture the strength and variability of the connections, and develop multiple metrics for best results
Reach: Account for viral effects (even if they are estimates)

Capitalize on understanding socialization, learning and experience (to reinforce the emotional, self/cultural-fit, and brand elements) outcomes of the events and in follow-up contacts with event participants (as part of a repertoire of relationship tactics). Key scorecard metrics should include:

Likelihood to recommend and intent to consider or purchase
Brand demand measures
Exhibit and event experience, attitudes, and perceptions
Ad/brand awareness and customer/prospect ‘connection' measures

Specifically test the engagement-purchase intent link to ensure that it is sufficiently predictive for your industry, product(s), sales dynamics, and competitive situation.
Stress follow up and pricing/availability on the back end to develop the brand and make the sale.

Track sales conversion to relate post event metrics with predicted and actual sales
Dashboard/scorecards should generate a debrief for learning and improvement of events and sponsorships

The leading firms sponsoring this event engagement study included AOL, Cadbury-Schweppes, Carat, CEMA, Cisco Systems, Coca Cola, Ebay, Free-Car Media, Frito-Lay, IBM, Intel, Jack Morton Worldwide, Microsoft, Oracle, ProMotion, State Farm, Texas Instruments, Toyota, Xerox, and The Marketing Arm. The preliminary results were presented at re:THINK, the ARF annual convention in mid- April, 2007 and an update was given at the Audience Measurement 2.0 conference in June, 2007. This White Paper is the culminating document of this important research initiative, and will be available from the ARF in January.

About the ARF

The ARF is the premiere advertising industry association for creating, aggregating, synthesizing and sharing the knowledge required by decision makers in the field.

Founded in 1936 by the Association of National Advertisers and the American Association of Advertising

Agencies, the ARF leads key industry learning initiatives that increase the contribution of research to better marketing, more effective advertising and profitable organic growth.

The principal mission of The ARF is to improve the practice of advertising, marketing and media research in pursuit of more effective marketing and advertising communications.

PURCHASE

Copies of this research report may be purchased by contacting Inna Sokolyanskaya of the ARF by email

(inna@thearf.org).

Source

"Experiential Marketing: A Master of Engagement. Research on How Engaging Events Pay." Raymond Pettit, PhD, William Cook, PhD, Dan Belmont, Inna Sokolyanskaya. The ARF, January 2008.