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April 4, 2008

An ad industry in crisis: why the smart money's on live marketing

“The era of building brands through mass advertising is over.” So said a Business Week article in August last year, and in the past couple of weeks the plight of media advertising has once again been brought into the spotlight by comments from Sir Martin Sorrell, chief executive of advertising giant WPP.

Although WPP has just announced vast profits, Sir Martin has been very public in his assertions that the performance of the advertising sector in the UK in the past 12 months, although buoyed by the World Cup, has been sluggish. This is nothing new as WPP has been very open about finding it difficult in the UK for the past two or three years, and industry experts believe things are unlikely to improve in the next 12 months.

So if the smart money from marketing is no longer going into traditional media advertising, where is it going?

The evidence suggests the answer is simple: experiential and digital marketing.

A wealth of evidence
In October 2005, Exhibiting magazine reported on George P Johnson Company’s research Event Marketing Trends 2005/2006. The white paper showed that events now hold a 26% share of marketing/communications spend, and that “event marketing is now front of mind at corporate strategy stage”. Some 91% of respondents said that spend on events would stay constant or grow within the next 12 months. The report went on: “30% will be spending more on events during the year ahead, specifically because of event marketing’s proven success.”

In April 2006, US magazine Tradeshow Week reported on American Business Media’s research on the flow of marketing money, and whether or not it was affecting the events market. The results showed that, although online spend was increasing, it was not to the detriment of events, but of media such as television, radio and print advertising.

The July 2006 issue of Exhibiting featured an interview with Kwasi Adjei, a marketing executive from British Gas Business. Adjei confirmed the company's increasing use of events. “Already, exhibitions are taking a role of growing importance within the company’s marketing strategy, due to the success it has experienced thus far... it's a great way to promote our brand, so it plays a big part,” he said.

However, while most commentators agree that client-specific events are likely to continue their rise in popularity, boosted by a more sophisticated measurement of value by the production companies, 'exhibitions' as a live platform will continue to have to battle for the same levels of spend, let alone an increase in real spend, or an increased proportion of the rejuvenated 'live' budget.

Changing times
Over the past five years there has been a huge change in the global marketing and advertising world. The proliferation of media channels, an explosion of commercial messages and more streetwise, cynical consumers have driven brands to adopt very different marketing strategies to get their message over to consumers. This has resulted in the growth of below-the-line and non-traditional forms of brand marketing.

Nick Adams, managing director of Sense Marketing Services and former founding director of Publicis-owned agency Lime, believes this is key to the power of experiential marketing. “Live events offer brands the opportunity to immerse their consumer in the brand, using multi-sensory devices that create a memorable, long-lasting impact on a consumer’s perception of a brand and future purchasing behaviour. Experiential marketing is a sophisticated discipline, it can inform and entertain, reinforce or change what consumers think of a brand. Reputedly the industry is growing some 35% year on year.”

Adams points to a study conducted by research agency 2CV in January this year, which claimed that over 33% of clients interviewed were likely to commission an experiential marketing campaign in the next 12 months, and of 54 client-side companies who were recommended experiential marketing, over 50% went on to commission an experiential campaign.

Live marketing delivers
If you want to add more weight to this assertion, a recent survey by Jack Morton into the effectiveness of experiential marketing found that it was the medium with the most impact, with 82% of respondents agreeing that they found participating in experiential marketing more engaging than any other form of communication. On top of this, 80% of respondents said experiential marketing was the medium most likely to give them information. (Click here for the full EVENTS:review report)

“In the current climate it is certainly the case that advertising is no longer seen as the sole solution,” says Lois Jacobs, president international, Jack Morton Worldwide. “Increasingly, we are seeing more integrated campaigns in which, as an experiential agency, we are consulted alongside other agencies with more traditional offerings, including those in advertising, from the very outset of the campaign. Our agency continues to grow revenue, which is a good indicator of a sector that is increasingly in demand.”

For Tom Treverton, PR manager for the Events Industry Alliance, the secret of the growing success of live marketing is in its name. “Live marketing offers a unique role to marketing, in that it is ‘live’,” he says. “Events offer multi-sensory marketing; the only business environment where your customers can see, touch, hear, smell, even taste your product!

Permission not interruption
“In addition,” Treverton continues, “event attendees ‘choose’ to be there, making our media the truest representation of ‘permission’ marketing available to brands, one far removed from the intrusive ‘interruption’ marketing alternatives, such as TV, radio, DM or pop-up advertising. At an event, the visitor is proactively choosing to come and see what brands have to offer. In the current marketing environment, where businesses and consumers go to great lengths to avoid media bombardment (be it by opting out of a direct marketing campaign, or fast-forwarding a TV ad break), there is no more valuable an accolade.”

So the future of experiential marketing looks bright. However, the industry cannot sit on its laurels. There are still areas where it fails to deliver – the most high-profile of which is return on investment, and for exhibitions the measurable delivery of qualitative value over quantitative reach. If the events industry is to continue to take advantage of this shift in marketing spend, then these issues need to be addressed. And not just by individual agencies or organisers, but by the industry as a whole.

The big questions are: Does the events and exhibitions industry have what it takes to deliver joined up thinking on live and experiential marketing, or will it be down to a few of the more savvy agencies, to drag the others with them and prove their worth? And will the savvy agencies redirect client spend away from exhibitions and into live events delivered by them by illustrating a more in-tune set of measurement criteria supporting such a move?

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