Making the case for ROI from experiential marketing

Jessica Twentyman Profile picture for user jtwentyman May 20, 2014
If there’s one thing that makes retailers and marketers leery of experiential marketing, it’s a lack of clarity on the return the can expect to see. Interactions Marketing is looking to set them straight and win them over.

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The term ‘experiential marketing’ may not mean much to the average shopper, but if they’ve ever sampled a new brand of cheese in a supermarket, or been handed a coupon for a particular laundry detergent in the parking lot, or watched a juicer being demonstrated, then they’ve certainly been the target of this kind of brand-building exercise.

In the US, if that experience took place at a Costco, Albertsons or Winn Dixie store, or involved a product from a large consumer packaged goods (CPG) company such as Kraft Foods, Nestle or Proctor & Gamble, then it’s likely that the company behind the campaign was San Diego-based Interactions Marketing.

Interactions Marketing runs some 1.7 million of these events each year, but it also operates in a highly competitive and fragmented market, where legions of firms compete to run campaigns that will introduce a vast range of products to millions of shoppers.

Executives at the company know that if there’s one thing that can make some retailers and manufacturers leery about dabbling in this kind of “experiential”, or “event”, or “engagement” marketing, it’s a lack of clarity on the return on investment (ROI) they can expect to see.

As a result, this is exactly where Interactions Marketing seeks to differentiate itself, according to Giovanni DeMeo, the company’s vice president of global marketing and analysis. These days, he says, it’s not enough for retailers and manufacturers to know the cost of running such a campaign and the volume of product they will shift as a result.

“They want the long-term view, too,” he says. “They want to know if, over the long term, did the campaign produce loyal shoppers and repeat purchases? They want to know whether they persuaded shoppers to switch brands and stick with the new brand. They want to know how frequency of purchase compares, before and after the campaign; how it impacted basket size; whether it triggered a ‘halo effect’ of affinity purchases - so did that campaign for a brand of cheese encourage add-on purchases of a particular brand of crackers, for example, and how did those sales play out over the long term?”

Persuasion tactics

Finding these answers for Interactions Marketing’s clients first involves persuading them to share huge volumes of their own data, gathered from point of sales (POS) systems, loyalty card databases, customer surveys and more. Then, the company runs that data through its own sophisticated data analysis environment, made up of a large range of different technologies, from its own in-house data warehouses to cloud-based data platforms from Google (BigQuery) and Amazon (Redshift), and various business intelligence tools for reporting and querying, DeMeo explains.

Giovanni DeMeo

When it comes to feeding its findings back to clients in a way that makes the most meaningful and compelling ROI case possible, meanwhile, Interactions Marketing has been using data visualisation tools from Tableau Software for around two years now. Each client, whether a retailer like Albertsons or a manufacturer such as Kraft Foods, has its own dashboard, designed to make it easy for staff to track key metrics.

The customisation part is extremely important, DeMeo explains: “Each client wants to see data in a different way - and they all want the ability to drill down into the data in order to view data at different levels.” A retailer with 2,000 US locations, for example, may need to present topline results to its board of directors; findings from 200 stores to regional managers; and store-specific results to individual store managers.

A live demo of one of these Tableau-based dashboards can be a powerful way to persuade a new client to invest, DeMeo explains. “And among existing clients, it’s often a good reason to reallocate more of their marketing spend to running events with us,” he says. In part, he adds, that’s because the RetailLogic platform can also be used by clients to compare the ROI from an experiential marketing event against the ROI from other types of advertising: a radio ad, a coupon campaign in a local newspaper or a temporary price reduction in targeted stores, for example.

“Our clients constantly challenge us by asking us for new ways to show and quantify ROI,” says DeMeo. In order to keep its competitive edge, Interactions Marketing has to continue to explore the frontiers of data analysis on its clients’ behalf. “We’re out ahead now in our market, but we need to stay there,” he says, in acknowledgment that other experiential marketing firms are also looking for ways to make a similarly convincing ROI case to big-name brands.

What’s key though, he says, is the way that the ROI case is presented to retailers and manufacturers. “Data visualisation makes the very complex insights we can provide easier to absorb. It’s a way for us to say, ‘Look, this is what we achieved for you”, and for them to be able to quickly answer, ‘OK - I get that”.

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