Here’s a well-written and well-reasoned article on the measurability of experiential marketing, and I’m not just saying that because I’m quoted in it.
I think it is a good estimation of some of the leading thinking around the subject, one which is bound to get people talking for some time to come. In fact, if the nut of measurability is cracked soon, then experiential marketing will help to augur in a completely new mindset for marketing and advertising. (But they said the same thin about traditional media advertising and its capacity for engagement and effectiveness, and we all know the jury is still out on that.)
Here’s my favorite part of the article (and yes, it’s because I said it.):
But there are others, however, that believe that the concept of measuring ROI isn’t even applicable to experiential marketing. Lenderman, for instance, views present ROI measurement as obsolete and archaic; a short-term measurement that is largely based upon the sales that occur after a campaign runs.
“There is a common misperception that experiential marketing has to be tactile in nature. What they don’t understand is that experiential is a methodology that is applied equally to every media. So asking for ROI on experiential is an impossible question.”
Lenderman highlights the studies of retail specialist Paco Underhill, who has demonstrated that two-thirds of retail purchases are unplanned. “Two-thirds of purchases have nothing to do with that ad that you ran – but still traditional advertisers and marketers are saying that if they see a blip on the screen in sales after their ad runs then that is their ROI!” Lenderman explains.
“We are not Pavlovian dogs nor trained monkeys,” he continues. “We tend to internalise messages and make a concerted and rational decision at a later time.” As such, Lenderman proposes a new term on which experiential firms base their measurement: return on experience (ROE).
“ROE is a much more long-term perspective,” he explains. “After a consumer has participated in an experiential area, sure we can measure the first month, but why not measure the six months after that? Or a year? If it is a test drive, for instance, perhaps the customer wasn’t even going to buy a car for a few months. Or maybe a year or two later they remember the great experience they had in the test drive. The measurement of ROI is focused on short-term, and that is a totally different mindset than when you are talking about marketing experiences.”
And there are other points to consider in the experiential marketing business case according to Lenderman, not least that it contracts the purchase cycle. “Customers could have months and months of seeing the same TV ad before they go out and buy the goods but with experiential you are wowed at that moment and are more likely to buy it there on the spot,” he emphasises. “The Smart car launch in North America is focused on test drives to allow people to buy it there and then and they are finding that 85% of people are intending to buy the car after the test drive. It shrinks the time it takes between marketing message and purchase. I think any CEO would be interested in something that contracts your purchasing cycle by 10-20%, rather than comparing how many widgets they sold before the campaign versus after.”