Innovation is key for brands when looking at new ways to meaningfully connect with consumers in an ever-growing digital landscape. A recent study by experiential marketing agency Gradient has shown that 80% of companies have increased their experiential marketing budgets so that they now account for 10-30% of their overall marketing spend, highlighting the growth of immersive strategies.

What is Experiential Marketing?

Experiential marketing is a strategy that engages consumers through immersive, memorable experiences, creating a direct, emotional connection with the brand. Unlike traditional marketing, which focuses on conveying messages, experiential marketing allows customers to interact with a brand in a real-world setting. 

Examples include in-store events, pop-up shops, product demonstrations, or branded experiences at festivals. These experiences encourage consumer participation, fostering deeper loyalty and stronger brand awareness. 

For instance, a fashion brand might host an exclusive pop-up where attendees can try on and purchase limited-edition items, blending entertainment with retail to enhance customer engagement.

Pauline, Gradient’s CEO says: “Today’s exciting technology within experiential marketing gives consumers the chance to connect with a brand on a whole new level – building stronger and longer-lasting customer relationships; be it physical, digital, or somewhere in between.”

The Growth of Experiential Marketing

This recent evolution in marketing has enabled brands to craft deeply resonating, multidimensional experiences for consumers. The careful set-up of engaging, interactive environments can capture attention and leave positive impressions for the consumer, whether through branded installations, pop-up events, or even interactive digital journeys.

As part of a study into the growth of experiential marketing, Gradient conducted interviews with 15 C-Suite executives and surveys of over 750 senior brand marketers in an attempt to reveal its latest trends, challenges, and strategies. A significant change in marketing budgets was revealed, as 80% of companies had increased their experiential marketing investment by 10-30% within the last three years. 

Major brands from a range of industries are already implementing experiential marketing to keep their audiences engaged, as they now understand that when consumers experience products and services firsthand, it can act as a powerful differentiator to them.

• Lamborghini combined the excitement of test-driving their new Urus SUV with a luxurious après-ski experience. This winter driving experience allowed prospective clients to experience the Urus hands-on in a scenic mountain setting, to increase connection to the brand.
• Facebook engaged in experiential marketing when creating an interactive pop-up in New York City during holiday season. The aim of the initiative was to educate visitors on privacy controls and build trust with the consumer by allowing them to directly communicate with Facebook’s representatives. 
• Costco and Whole Foods Market have long been known to use experiential marketing to make shopping experiences more engaging. Costco’s use of food sampling stations and Whole Foods’ in-store cooking classes allow each customer to enjoy products in a hands-on, practical way that encourages repeat visits and brand loyalty.

Other Key Survey Findings

Gradient’s research also uncovered a number of other key statistics associated with experiential marketing, covering scope, budget, and ROI.

• 72% of marketers feel they are missing out on opportunities by failure to integrate experiential marketing more holistically as part of an overall marketing strategy.
• Over 20% of respondents dedicate as much as one-third to one-half of their budget to experiential marketing.
• More than 85% of respondents are satisfied with their experiential marketing ROI measurements, despite the misalignment between objectives and success metrics.
• The top KPIs for experiential marketing are earned media value, social engagement, and net follower growth. At present, there still isn’t a standardized method to calculate these.

Challenges Associated With Experiential Marketing Campaigns

Although experiential marketing can provide many benefits, major challenges must be navigated in order to successfully execute campaigns.

Timing: The introduction of experiential marketing can begin too late in the sales funnel for many brands, preventing opportunities to build connections from initiation. Incorporating these earlier on can create a more comprehensive journey for the consumer.

Collaboration: Seamless collaboration is required between internal and external teams to merge creative, technical, and logistical expertise. Bringing these elements together can be difficult, but they are essential to deliver a combined brand experience.

Measurability: The challenge associated with tracking and measuring experiential campaign success is significant. Whereas traditional marketing metrics are well-understood, experiential marketing often involves experiences that are harder to quantify.

As consumer trends continue to evolve, experiential marketing is becoming essential as part of an overall strategy. Gradient’s experiential guide brings light to this technique by providing insights and practical solutions to the challenges that currently exist, ensuring marketing efforts can remain impactful and measurable.