The X in marketing

29 Sep,2011

 

 

By Ritu Midha

 

Experiential marketing, or ExM, is not really a new phenomenon – even way back in the late 1990s and early 2000s, it was being used by a few savvy marketers. For instance, in 1996 HLL did a children’s connect programme in schools for Pepsodent, which led to high brand recall. In 1999, Reebok got people to try out its high-end DMX shoes – and converted nearly 10 percent of the people who tried the shoe into customers.

However, back then, examples were far and few, and the growth rate sluggish. No one predicted that in approximately 10 years it would grow to the size it is today. It is no longer being looked at as a futuristic strategy. It is here and now – and growing. Marketers have separate ExM professionals, while agencies, both media and advertising, have experiential marketing arms and divisions.

 

Understanding ExM

The USP of ExM obviously is that it enables the brands to connect with consumers, and engage in a two-way interaction, unlike print and television – where it is by and large a one-way street. As is known, it has a right brain bias, and seeks to fulfil certain aspirations and feelings of consumers – it seeks to appeal to consumer’s senses… a rich cup of coffee, a quick drive in a luxury car, hair care by a well-known stylist, two days free stay at a resort – but would it work for a bad brand? Ideally, it should not!

 

Global insights

Global Experiential Marketing Research Industry Trend Report 2011 (Experiential Marketing Forum’s Global Research study conducted with IMI) indicates that ExM is getting attention from marketers the world over.

A few insights from the study are:

  • Clients consider Experiential/Event agencies as ‘innovative, creative and engaging’
  • The client expectation, as per the study, is that experiential marketing agencies would provide better RoI and integration with overall marketing plan and strategy in times to come
  • Clients believe that Social Media, Digital Media and Experiential Marketing would see the largest market spend growth in the next two-years.

(The study was conducted among marketing professionals across the globe.)

ExM in India

If experts are to be believed, the scenario is not very different in India, as far as percentage growth goes. As figures for experiential marketing (which, as per some experts, is no different from BTL) in isolation are not available, here is a quick look at Below the Line market size facilitated by Spatial Access. States Ms Geetanjali Bhattacharjii, CEO, Marketing Services, Spatial Access, “The 2007 annual report of The FICCI-PricewaterhouseCoopers estimated BTL spending in India to be at Rs 900cr, It was expected to grow to Rs 2000cr by 2011. Today’s estimates place BTL spends across events, retail, printing at Rs 9000cr.” She adds, “The ATL: BTL ratio is at 70:30 now with the BTL pie increasing to a 40 percent of marketing budgets.”

Spatial Access is possibly one of the pioneering developers of The Activation Index.

 

It is certainly an interesting phenomenon. Even today, while the slowdown is showing its impact on media spends, digital, social and experiential are expected to be the least affected. What is more, digital and ExM are expected to work together – online activities culminating in ground events is the buzz among youth brands.

Experts believe that tradition media is not going anywhere, considering its reach, CPT and the place it already has in a consumer’s mind and household. But activity on it will increasingly be supplemented with ground activities to engage specific target groups.

 

Positive outlook

Mr Sam Balsara, Chairman and Managing Director, Madison World, believes that pace at which EXM is growing is phenomenal, “More and more companies are now focusing on integrated marketing and engagement. So directionally, it is the way forward. Marketers now know that they need to engage their prospective target group in a more meaningful and deeper way in order to convert them into customers and retain them. You need to seduce the customer in variety of different ways. Marketing spends in experiential marketing are substantially increasing.”

Mr Josy Paul, Chairman & NCD, BBDO India, endorses Balsara’s view wholeheartedly, remarking that a standalone TV commercial might not suffice in most cases now. As he puts it, “You need an action-oriented idea based on behaviour.” He adds, “We have proved the power of the action-oriented idea with campaigns like Women Against Lazy Stubble started on Facebook, Aviva Great Wall of Education that started as a wall on the road, Lemon Patalum in Tamil Nadu, which we did for 7up – a platform to invite kids to play light-hearted, lemony, rubber-ball cricket with their superstar CSK. Today you need to create multiple platforms.”

 

A few advantages

Consumer engagement is taking place at various touch points like colleges, housing societies, and events organised with the sole objective of providing customer with a brand experience. However, malls and organised retail outlets are the ones utilised to the maximum – be it sampling of a new tea, a shampoo or even a car. As there is less time between awareness and purchase here, the conversion ratio can be much higher.

Retailers, of course, are leaving no stone unturned in engaging the customer, in activities co-crafted with brands, or in isolation. States Mr Devendra Chawla, President, FMCG & Food, “We follow a toolkit including a multi-sensorial engagement with the consumer in the retail theatre. In food categories, where taste and palate play an important role in buying decisions, experience in terms of sampling is very effective. In the non-food category, testers are provided to help customers with decision-making. Promoters play an important role as in the case of beauty products through demonstrations.”

Another interesting fact that has come out in a few global experiential marketing studies is that an experience often leads to a lot of discussion – 90 percent of people, in fact, tell their family and friends about participating in the activity. Word-of-mouth does create a lot of buzz around the brand.

Direct engagement with a brand leads to emotional engagement, which increases loyalty and brand recall.

 

A few examples

Marketers are today generating tools and channels to make an effect on all the senses of the consumer, in 360-degree sight, touch and smell. However, one does wonder whether experiential marketing works for all product categories, or is it not-so-good a bet for low involvement categories. Explains Ms Bhattacharjii, “The types of companies that utilize experiential marketing tactics are typically contemporary consumer brands which are youthful enough to create the experience. However, the potential for such campaigns is currently growing, with a whole host of companies and brands hoping to gain the benefits from engaging with their customer base.” She also gives a few examples of Experiential marketing activity:

Pepsi organized an inter-school cricket event for 425 schools across 14 cities, which worked wonders for it. This was the exact age group they wanted to target. Mass advertising is more general in its appeal, whereas through BTL you can focus your efforts better, customize better.

Samsung discovered that BTL activities like product demonstrations and cookery classes helped in making people familiar with the concept of its microwave ovens and eventually helped in sales too. BTL helps you reach the audience on a one-to-one basis.

Vodafone and Fever 104 planned a “Vodafone Fever” contest where every 104 minutes, one had the chance to win Rs.104,000! Whenever the RJ called, the contestant was supposed to say “Vodafone Fever” instead of “Hello”. This way, both companies reached their target audience in a jiffy.

Kaya Skin Clinic finds it profitable to organize workshops and events on skincare for its customers. This way it generates more business from its existing customers.

 

Issues

Experiential marketing is growing but not without hiccups. Identifying the specific target groups, and the right place and activity to reach them, is one issue. One size fits all is not a workable model. Another issue faced is that consumer usually wants to participate in the activities for the brands they are already familiar with courtesy traditional media. The third and bigger problem is the absence of measurability and metrics. The argument by ExM agencies is that RoI for EXM should not be cost per reach but cost per conversion.

If current indications are anything to go by, ExM is set to grow. However, it can never be a substitute for traditional media. Brands will continue to build on traditional media, and will use ExM for better customer connect, and better sales – and they will do so more frequently now.

 

Picture Credit : Fotocorp

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