It’s been widely believed that most consumers—not just millennials—value experiences over things. In fact, there’s even evidence that those people live happier lives.
Now, a global study from experiential agency Freeman shows that marketers are also subscribing to the idea. The 2017 Freeman Global Brand Experience Study found that more than one in three CMOs expects to set aside 21 to 50 percent of their budgets for brand experiences, including "events, trade shows, sponsorships, exhibits, permanent installations, virtual or augmented reality experiences and/or pop-ups."
"Audiences have fragmented, and it’s become more about narrowcasting—like finding your exact audience that you’re needing to market to and getting to those folks—versus a broadcast message," said Freeman EVP and CMO Chris Cavanaugh.
The findings of the study show greater investment plans for experiential programs than recent research from the Event Marketing Institute, which cites that experiential marketing spending will increase by 11 percent in 2017.
The study also discovered that 59 percent of global CMOs recognize brand experience as a way to formulate ongoing relationships with their core audiences, and 90 percent of marketers worldwide think that brand experience delivers strong face-to-face interaction and more compelling engagement.
When drilled down by industry, B2B marketers are more likely to invest in brand experiences (28 percent) compared to 18 percent of their B2C counterparts. "B2C has always had broadcast to rely on, but from a B2B perspective, they came to the party early," hosting demonstrations at trade shows among other hands-on experiences, explained Cavanaugh. Plus, 54 percent of B2B marketers and 53 percent of brand managers saw experiences as an effective method to generate leads.
"Audiences spend more time with the brand at live experiences versus a 15-second commercial," Cavanaugh said. "As a result, it’s really an opportunity to deliver the company’s point of view on the market."
But not every experience is as robust as it could be, the study revealed. Only one in four marketers is engaging all five senses in its experiential marketing and just 22 percent of those surveyed said they’re using some form of touch screen technology.
Marketers in Asia are at the forefront of the practice. The research indicated that Asian marketers were early adopters of immersive, interactive technology, like virtual reality (31 percent) compared to their North American (9 percent) and Western European (7 percent) counterparts.
"Much like how Asia-Pacific adopted the smartphone technology ahead of the rest of the world, I see the same analogy with North America and Western Europe," he said. "I do think it’s coming, but I think Asia is leading the way."
And 32 percent of Asian marketers said they will spend more than one-fifth of their total budgets on experiences, versus 23 percent of their European colleagues and 27 percent of North American marketers. Together, more than 50 percent of both Asian and North American marketers agreed that experiential marketing helps increase sales.
CMOs from every continent surveyed believe that brand experiences showcase thought leadership (48 percent) and increase advocacy (58 percent). But brand managers and event planners don’t agree. Only 33 percent of brand managers and 28 percent of event planners said their companies’ point of view is expressed adequately through experiences, and 13 percent of brand managers and 18 percent of event planners think experiences build brand advocacy among consumers.
"They’re the practitioners of the events. They’re there on the ground as it’s unfolding, and it seems like there’s a different point of view," Cavanaugh said. "My expectation is as CMOs see the value and are putting more money behind brand experiences, I would expect that gap would shrink over time."
Survey firm SSI conducted the online survey Nov. 2-16, 2016. More than 1,000 event planners, CMOs and brand managers from Asia, Western Europe and North America participated in the study.