How Much Should You Be Spending on Experiential Marketing?
According to AgencyEA, “One in three brand-side marketers struggles to prove ROI and secure sufficient budget for experiential programs.” The ability to prove ROI is hugely important for organizations to increase their experiential investment, however, in the past, experiential programs have been viewed as a bit of a gamble. Therefore, it’s difficult for experiential marketers to legitimize spending thousands, or sometimes millions of dollars, on a campaign that might not generate the expected ROI. But times are a changin’, and marketers have a not-so-secret weapon to help them leverage their experiential budget: and it’s technology, of course.
How Technology Helps Prove ROI
Marketers have adopted automation and data tracking for the majority of their daily tasks – and now that data reporting is supporting experiential marketing initiatives. For example, NFC wristbands can be used to track check-ins and collect information about event attendees as they pass through your activation. This is just one of the many ways marketers are measuring their experiential programs, and also proving that the ROI is significant. Recent reports indicate that 98% of users feel more inclined to purchase after attending an activation and 65% of brands say that their event and experiential programs are directly related to sales.
Now that marketers are proving the value of experiential programs, they are also reporting that their experiential budgets are growing; 38% anticipate a 10% or greater increase within the next 18 months and 25% expect a boost of 5-10% in budget growth. Given this growing investment, the question remains: How much are experiential marketers spending on these programs?
After looking at the numbers, we found that marketers are willing to bet quite a bit on experiential programs.
How Much Are Marketers Really Spending?
In fact, customer activation spending is set to increase by $560 to $740 billion U.S. dollars by 2020, which may have something to do with the reported revenues generated by experiential marketing. Since last year, revenues for experiential marketing jumped 7% to $50.6 billion, while brand activation revenues are expected to reach $357 billion this year alone.
Does that mean your brand has to dump millions of dollars into experiential marketing for it to be successful? Probably not. As long as you’re strategic about where and how you spend the money, it’s possible to run a campaign on a fairly modest budget.
75% of companies with event budgets between $50-100 million say they expect an ROI of more than 5:1 for live event and experiential programs. So, if the math adds up, you can expect to generate approximately 5x what you spend on experiential marketing programs. The trick, however, is to invest in programs that drive consumers to action. Without proper engagement tactics, even the most expensive campaigns can fall flat.
Case Study: Sport Chek and Edmonton Oilers In-Arena Activation
In a recent WILY success story, Sport Chek activated its NHL sponsorship with the Edmonton Oilers, by driving fans to retail during a live game. However, the Oilers have executed this promotion in the past and had issues with the website crashing. Therefore, it was important for Sport Chek to optimize the experience and ensure the website did not crash to increase sales. The outcome? All prizes were claimed onsite at one of three prize stations operated by Sport Chek Advisors. Download the case study to see how WILY was able to execute the program successfully.
The key takeaway: When spending on experiential marketing programs, it’s important to invest in technology that not only works but also includes reporting. You can then tweak and repurpose those same campaigns for different target audiences and have confidence in your investment.
To see how the world’s most trusted brands are maximizing their experiential marketing budgets, join us for a live demo. Also, check out our latest eBook, 75 Fascinating Facts About Experiential Marketing, for the latest facts, case studies, and innovations in the experiential marketing space.
Many brands struggle to connect with and influence their target audience. However, there is one marketing approach which many experts say is the most effective when it comes to motivating people to action…and that is Experiential Marketing.
Download the report to uncover the latest facts and key findings from across the XM industry.
- The ROI of Experiential Marketing
- How Technology Improves the Brand Experience
- The Impact of Shareable Experiences
- Experiential Marketing Success Stories
- Plus So Much More!