• by Laurie Sullivan , January 30, 2008

Lacking measurements to prove return on investment could derail experiential marketing strategies, but marketers still plan to increase spending on campaigns this year. So say results of a recent survey from Jack Morton Worldwide, an experiential marketing agency within Interpublic Group of Companies.

The survey suggests that 79% of participants say a means to measure ROI for experiential marketing was identified as the top obstacle to its use. Sixty-six percent point to funding as the second most significant roadblock, closely followed by integrating experiential programs with other marketing initiatives at 65%.

Eighty-seven percent want to know more about measuring ROI to help them justify programs to top-level executives.

So why the headaches proving ROI? Advertising and direct marketing are mature categories, with history and metrics that support programs. "Experiential marketing is evolving and maturing, and therefore it's not surprising metrics are evolving too," says Liz Bigham, senior vice president/marketing at Jack Morton Worldwide.

"We try to combine ROI with what we call ROE, return on experience, which measures the quality of the audience participating in the campaign. We also look at how long we had their attention, and how many participated rather than passively observed."

Other ROI measurement that marketers can consider: How did the campaign impact behaviors and perception? What did people do differently beyond leads and purchase? How did consumers perceive the brand or product?

About 200 of the 277 survey participants across the United States, the United Kingdom, Europe, China and Australia affirm that they will spend between 5% and 10% more on experiential marketing this year. Notably, 12% will increase spending between 11% and 25%, and nearly one in 10 says spending will be increased by more than 25%.

Survey respondents agreed that experiential marketing has several positive benefits, especially in driving both word-of-mouth advocacy and building brand awareness and relationships. The results reveal the significance placed on marketing functions by industry professionals. Seventy percent say experiential marketing is extremely or very important to their organizations, and 71% report experiential marketing will become increasingly important this year.

Experiential marketing's unique ability to reach, engage and make relevant connections with audiences has contributed to its growth. Emphasizing this point, 93% of respondents agreed that experiential marketing generates advocacy and word-of-mouth recommendations, which Jack Morton Worldwide calls "the ultimate user-generated content" in an era of increased consumer control and hunger for authenticity. About 92% agree that experiential marketing builds brand awareness and brand relationships, and 77% state that it generates sales and leads.

The survey also reinforced the need for brands to "do" more and "talk" less. Ninety-eight percent of respondents agree that brand experiences that deliver on promises are central to building commitment and loyalty, and 99% concur the delivery method proves to be as important as the message.

Meanwhile, C-level executives look for ROI as the key criterion for success. Launching a new campaign, experiential or otherwise, can become challenging when lacking historic data to back the project. Marketers also can either find published industry data or take existing benchmarks from past projects to support the claim, says Bonnie Carlson, president of the Promotions Marketing Association (PMA).

When launching a new strategy, there are other measurements related to ROI that marketers want to consider. "Does the campaign build awareness and brand equity, create better relationships with marketing partners like retailers and banks and improve consumer perception and loyalty for the brand?" Carlson asks. PMA, an industry trade association, also plans to release a study on experiential marketing in April at the PMA Annual Integrated Marketing Conference & Reggie Awards in Chicago.