Designs of Experiments - Optimizing Investments in Real Time

One of the strengths of Experiential Marketing or Event Marketing is its ability to deliver measurable results in real time.

This lends Experiential Marketing to a Six Sigma process called Designs of Experiment, or DOE.

A well-constructed DOE allows you to “test drive” a tactic or series of tactics before committing all your resources. This type of objective comparison allows you to select the best option, and best of all, to know what type of result to expect from your program.

I have seen cases where two ideas that both sounded equally brilliant on paper achieved dramatically different results in the field at the DOE stage.

So how do you create an Experiential Marketing DOE? It must start with these two questions:

• -       What do we hope to achieve?
• -       How will we define success?

From there, you can brainstorm activities that could potentially drive consumers toward the desired response. There may be many options, and your experience and insights will help to identify those with the best chances of success.

However, the beauty of the DOE is that it lets you test some ideas that may seem far-fetched or at least less obvious than your normal approach.

Since you are not going to dedicate a large budget at the DOE stage, your risk in trying these ideas is very low.

With several possible winners in hand, it’s time for field testing.

Here are other important considerations:

• -       Clearly define the data you will be gathering.
• -       Target quick returns – after all, this is the strength of Experiential Marketing.
• -       Control the independent variables where possible, so that you feel comfortable making comparisons. You don’t want to be at the mercy of capricious weather, for example.
• -       Use your weighted objectives to compute Return on Objectives scores from each project.
• -       Be ready to quickly roll out whichever tactic performs the best.

Gather the data, compare the weighted results against the execution cost in order to determine Return on Investment, take your Return on Objectives scores into account, fine-tune if needed, and roll out the winning plan as quickly as possible.

Then bask in the admiration of your peers.

 

How Experiential Marketing Fits Into Your Plan

Let Upside Dictate Your Experiential Marketing Budget

Armed with an understanding of Experiential Marketing, which brings your brand into close, personal contact with consumers, you next must decide how this tool fits into your overall marketing program.

These factors should be taken into account:

• -       Whether you will be able to leverage a Sponsorship investment and/or other elements of your marketing program
• -       How long your messaging has been in place (maturity)
• -       Potential budget range
• -       Potential benefit to your brand

Of these, the most important factor to consider is the potential benefit. In many cases, the dollar-for-dollar benefit of experiential marketing can outperform all other elements of your marketing program.

It’s important to recognize that Return on Investment, as important as it is, should not be the only factor in consideration. For example, it is comparatively difficult to reach and influence mass audiences with meaningful Experiential programs. This is where mass media shines.

But once that mass awareness platform is in place, whether via mass media or Sponsorship, Experiential can often be the best way to turn a consumer’s interest into purchase and loyalty.

Analyzing your marketing performance at this fairly granular level allows you to make informed decisions on budget allocation, based on performance and Return on Investment.

Some of the best Experiential Marketing programs I have seen share one or more of these elements:

-       They turn passion into action. If there is no passion, what is the consumer’s motivation? Hint: You don’t want it to be price discounts.

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      They place the product or service into direct, emotional contact with the consumer. Literally allow your potential customers to embrace what you have to offer.

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      They generate positive energy and enthusiasm. This is a magnet, drawing other consumers to your event, and eventually into your brand circle.

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       Create brand ambassadors, armed with the tools they need to generate word-of-mouth (both literally and virtually) for your brand. Make it easy for your new fans to spread the word.

The more of these components you can build into Experiential Marketing, the more results you will generate. Let the potential for results dictate your budget.

What is Experiential Marketing?

Experiential Marketing – Your Most Valuable Tool

Sponsorship marketing has many moving parts, each of which must complement the others:

• -       Brand association, commonly called “the sponsorship”
• -       Media marketing support
• -       Sales activity support
• -       Experiential marketing

For a marketer, perhaps the most valuable of these on a per unit basis is experiential marketing, sometimes called “event marketing,” because it most frequently is associated with one or more events.

It’s more valuable simply because it’s far more impactful for a consumer to experience a brand than to hear or see information.

This goes back to that old adage:

Tell me, I’ll forget.
Show me, I’ll remember.
Involve me, I’ll understand.

The better you can help your target customer to understand your brand, the more value you create. This is reflected in the Return on Investment calculations we use.

When planning an experiential marketing program, ask yourself these questions:

• -       Does the activity complement the sponsorship?
• -       Are we exposing not only our brand, but our specific products and services?
• -       To what degree can consumers get hands-on with our offerings?
• -       Can we use the consumer’s affinity with the sponsorship to create an ongoing relationship?
• -       Is it possible to extend the impact beyond attendees using social and other media?
• -       As a consumer, what’s in it for me?

The better you integrate these elements, the more value you will realize from each event.

Therefore, static signage will have less value than an interactive kiosk, which will have less value than a display staffed by professional marketers, which will have less value than a display which provides each participant with real, tangible value that is directly related to the products and services you are offering.

Higher numbers of people may see the static signage, but it is nearly impossible to make up the reduced value in sheer volume.

However, since signage can be a relatively small line item in the budget, and can both extend the exposure to those who couldn’t attend your display and reinforce the experience for those who did, it can provide positive value.

Mine all of the value you can, and you’ll realize a strong ROI on your experiential marketing investment.

How much should you pay?

How Much Should You Pay For a Sponsorship?

Too often in the world of sponsorship marketing, value and asking price seem to have little in common.

As an enlightened marketer, you must take control of this relationship and determine first whether the sponsorship is worth pursuing, and second, at what price.

Here’s my rule in determining how much to pay for a sponsorship:  You should never pay more than the value that the sponsorship delivers to your Marketing By Objectives plan.

This puts the onus back on you, because the party marketing the sponsorship generally will have little insight into your specific goals and objectives.

(That insight, by the way, may develop over the course of a long-term relationship and is one of the power tools of sponsorship marketing, when done right.)

Starting with your weighted goals and objectives, identify the value elements that the sponsorship in question could bring to the table. Then apply value based on:

• -       Reach to your desired demographics or target customers (quantity).
• -       Level of engagement with these target groups (quality).
• -       Cost and difficulty of reaching these target groups at the same level of engagement in other ways (alternatives).

Bear in mind that the fees you pay are only the beginning, and must be supported by activation, as discussed in previous blogs.

This approach puts you in the driver’s seat at the negotiating table, allowing you to craft a sponsorship package that meets your needs and your budget.

You may find that the sponsorship cost is quite reasonable, given its unique ability to deliver value to your MBO plan.

Conversely, you may find that the sponsorship is not worth pursuing at any price. In that case, both sides can move on to greener pastures.

Individual Sponsorships Require Balancing Risks, Rewards

Individual Sponsorships Require Balancing Risks, Rewards

My last blog talked about whether sponsorship of a team, such as Team USA in the World Cup, constitutes ambush marketing. The answer was – it depends.

Certainly some sponsors use it that way, while others simply find it makes better sense to target a specific market by going the team route.

There are similar considerations when it comes to individual sponsorships. An athlete or entertainer may actually resonate more strongly with your target consumers than a team or league does.

In some cases, a very popular athlete may allow you to address multiple markets much more efficiently than either sponsoring a selection of national teams or becoming a global sponsor.

A good example of this is Argentine star Lionel Messi, whose face has been ubiquitous in television and Internet advertising during the World Cup.

And he’s done pretty well on the field of play, too.

By contracting for personal endorsements or sponsorships with Messi, a host of global companies are capitalizing on the World Cup in multiple markets without having to deal with FIFA or any of the teams directly, or perhaps after having been shut out of those sponsorships by competitors.

Some of these Messi-centric campaigns have the distinct feel of ambush marketing.

The Return on Investment of such a personal sponsorship can be very attractive, because it may allow you to reach the same or even better potential customers at a lower price. You negotiate only the benefits you intend to use, and pay accordingly.

However there is a risk-reward aspect to this strategy.

While it’s highly unlikely that a World Cup primary sponsorship would disappoint, given the event’s long history, established popularity and the spread risk of multiple teams’ involvement, an individual sponsorship can go bad in a hurry.

Your company becomes linked with the athlete or entertainer’s behavior, both on and off the performance venue. If he gets drunk and drives his sport utility vehicle into a tree, you are faced with damage control.

With a team sponsorship, the worst that can happen is early elimination. In the case of Team USA, sponsors were elated to see the team exceed expectations this year.

With a league sponsorship, the worst case would be an unattractive matchup in the finals.

Either way, your corporate president isn’t fielding media calls asking for comment on some salacious scandal.

Peace of mind comes at a price – and that should be factored into your plans.