Making the Case for Event Spending

As more and more companies recognize the power of experiential marketing—and that term becomes a business buzzword—many marketers are launching increasingly ambitious event campaigns and expanding their event budgets. Here's a look at how companies are boosting their event strategies and expenditures.

July 5, 2006, 12:00 AM EDT

Xbox's recent event marketing efforts included several stunts for the launch of its new 360 console. The Microsoft brand invited 3,500 hard-core video gamers and 150 journalists to an airplane hangar in the California desert in November. Guests won their attendance privilege through international contests, and could purchase the Xboxes a few hours befoe they went on sale to the general public.

One evening last year, the W Union Square hotel in New York filled its ballroom for an event featuring a panel of independent filmmakers led by John Waters. But it wasn't part of a screenwriting seminar, or a publicity stunt surrounding a local film festival. Instead, it was part of an ongoing series of events called “W Happenings” run by the W Hotel chain.

Launched in 2004, “W Happenings” helped make the W the first hotel brand to market itself through a series of lifestyle and cultural events, according to Jane Glastein Lehman, W Hotel's director of public relations. The idea behind the series: give people a chance to experience the hotel without having to spend the night. The events “have become a driving force not only for the image of the brand but in discovering—and then catering to—the interests of our guests.”

W Happenings began with a handful of events in New York and Los Angeles; today the series has grown to approximately 50 events nationwide per year, and includes everything from wine tastings to film screenings to fashion shows and art exhibits in the public space of the hotels. “We are a marketing-driven company,” Lehman says, “and the events do meet an objective set by management, one that positions the brand as a lifestyle authority rather than just a hotel.”

It's a concept that's being increasingly embraced these days: Companies are recognizing the power of events as vehicles to build their brands and connect with consumers in a way that traditional advertising and marketing campaigns don't always achieve. And as a result, many companies are creating more events and other real-world experiences and spending more money on them.

Of course, events are hardly new, but the importance of events as part of a company's overall corporate marketing strategy seems to be growing. According to Jack Morton Worldwide's 2005 Experiential Marketing Survey, 70 percent of consumers surveyed said that participating in experiential marketing would increase their purchase consideration; 57 percent said participating in experiential marketing would result in quicker purchase. Seven out of 10 consumers surveyed said that participating in a live experience would make them more receptive to the brand's marketing. And eight in 10 consumers who have participated in a marketing experience told others about it.

“Across the board, our clients are recognizing that there needs to be a greater emphasis on events within their organizations,” says Liz Bigham, the author of the survey and the director of U.S. brand marketing for Jack Morton, which bills itself as an “experiential marketing agency,” using what has become a business buzzword. The firm has 15 offices on four continents and works with such clients as General Motors and Nokia. “Getting [events] aligned with your business and brand has terrific impact on your business's success. That's always been true—but it's increasingly true that people recognize that events are a very effective mechanism for achieving that goal.”

Another study, EventView '05, sponsored by the George P. Johnson Company and Meeting Professionals International, found that 96 percent of marketing executives include events in their marketing mix and 93 percent consider the importance of event marketing to be “constant or increasing.” (Respondents were in marketing management positions in the technology, health care, automotive, and finance industries in North America, Europe, and Asia Pacific.) Ninety percent of respondents reported that they were maintaining or increasing their budgets—up 10 percent from 2004. Those budget increases averaged 15 percent over 2004. And the proportion of marketing budgets for event marketing, at 27 percent, showed an increase from 2004, when it was 21 percent. In other words, events are getting a bigger slice of an even bigger pie these days.

And in a 2005 CMO Council survey of 189 chief marketing officers, 49.2 percent of C.M.O.s said that they were very committed to centrally managing and using events as a strategic marketing vehicle, while 39.2 percent said they were somewhat committed to that goal.

Companies are waking up to the importance of events in different ways: in March, New York-based fashion label Polo Ralph Lauren announced a multimillion dollar deal to become the apparel sponsor of Wimbledon and dress all on-court officials through 2010. Last year, the brand also became the official apparel sponsor of the U.S. Open tennis tournament. In November, L'Oreal signed a deal reportedly valued at around $5 million to sponsor all Weinstein Company and Dimension Films movies and have the opportunity to host the studios' premieres and events, including their Golden Globes and Academy Awards parties, for the next two years.

In late 2004, San Francisco-based Wells Fargo even created its own experiential marketing department. “It was important because consumers are much more difficult to reach, so brands need to explore new ways to interact with them,” says Tim Collins, the company's senior vice president of experiential marketing. “Consumers are bombarded with marketing, and it's increasingly difficult to sift through the clutter to find what is relevant. In a one-on-one setting, it is much easier for the consumer to get the information they need…and have a little fun along the way.”

“Cutting through the clutter” is a phrase marketers utter a lot these days when talking about events. “Traditional mediums have become so cluttered, there's a need to create a more effective way to engage the consumer,” says Erik Hauser, founder and creative director of Swivel Media, another “experiential marketing agency” whose clients include Wells Fargo and, and the founder of the International Experiential Marketing Association, which has an online forum that has attracted more than 3,200 members from 225 countries since 2004. Part of the appeal for many companies is an event's ability to build relationships and directly reach consumers—specifically, the right consumers, however a company defines them—in a way that offers measurable results.

Tracking results helped get the green light to expand upon the mobile marketing tour it began last year. The Chicago–based company worked with Swivel Media to produce a six-month, 43-city mobile marketing tour which complemented its popular Super Bowl TV commercial featuring a human working with a bunch of monkeys.

Event attendees had their picture taken at each stop and were given a code that allowed them to retrieve the photo from the Web site; then tracked how many people entered their code. It also presented event attendees with the chance to register for a sweepstakes contest, and tracked the number of people who registered for that—as well as the number of registrants who were new to the site. The tour was so successful that is not only doing it again this year, but adding more cities, says Andrea Winitsky, the company's event marketing manager.

Pairing the event with a successful TV campaign may have helped its success, says Allison Saget, author of The Event Marketing Handbook: Beyond Logistics & Planning (Kaplan Publishing, 2006). “The most critical part of any event plan is that it never, ever stands alone,” she says. “It is an integral part of the overall marketing strategy, which includes public relations, advertising, direct marketing, telemarketing, online communications, research, and most importantly, personal selling.”

For some companies, the power of events is a relatively new revelation. Take Triumph Motorcycles. The luxury British brand set out to re-evaluate its marketing programming and, in September, hired U.S. representation for the first time. One of the goals was to put the bikes in front of a style-conscious crowd. “In the past, we really didn't do many events, other than the big bike events like Sturgis [the famed annual Black Hills motorcycle rally in South Dakota],” says Todd Andersen, vice president of marketing for Triumph Motorcycles America, in Newnan, Georgia. “But over the last year we've been looking more for nonmotorcycling events where we can get in front of consumers with our products.” That has meant placing bikes at events like the Esquire House—the luxe bachelor pad created by Esquire magazine—and participating in a motorcycle-theme event at Bloomingdale's, where Triumph donated a bike as a prize.

The company has also created its own events; in September, Triumph presented new motorcycle models around the swimming pool of the W Hotel in Los Angeles, and invited motorcycle and lifestyle press to a cocktail reception. “It was more cost-effective than placing ads in 20 magazines, and it was a good, upscale environment that positioned our bikes the way we wanted them to be,” Andersen says. “And it was unexpected—you don't expect to go to a pool party and see 20 motorcycles on display, so it was unique.” Furthermore, the event generated measurable ROI in the form of editorial mentions that ran in more than 20 media outlets after the party. In 2006, Andersen expects to do four similar events in addition to participating in other companies' events. His marketing budget has increased accordingly: “Two, three years ago, we didn't spend anything on these types of events,” he says. “Now it's growing toward five to 10 percent of our marketing budget.”

That's not a lot, but it does follow the trend of increasing budgets for events reported by the EventView '05 study, and falls in line with 20 percent of marketing budgets, as reported by the 2005 CMO Council Survey. According to that study, 70 percent of chief marketing officers allocate more than 10 percent of their marketing budget to events.

Even companies with a history of aggressive event campaigns are adjusting their strategies and using experiential marketing in new ways. “We've always done a lot of events because we're a cyberbrand,” says Bennett Porter, Yahoo!'s senior director of buzz marketing. “Whenever we can do something that allows people to touch us and interact with us off-line, that's great.”

But as the company has grown, so has its events strategy. When Yahoo! Music launched in August 2005, Porter says the company wanted to “ratchet up the types of events we were doing.” With the help of New York-based marketing firm Strategic Group, Yahoo! got involved with major music events like the Grammys, setting up a viewing party and an after-party for key executives and customers; and the MTV Video Music Awards. Strategic Group also helped the company set up a concept called the ”Yahoo! Tenthouse” at the Consumer Electronics Show. “We're able to be press-worthy, and at the same time reach influencers,” Porter says. “We never want to do events just to do a party—they never meet anyone's objectives. [Instead] we create experiences and interact with brands. That's important to marketers these days because that high-touch [experience] is important to consumers, and reaching influencers has become more and more important.” Porter won't discuss budgets, but does say that the company did eight events in 1999 and has 66 planned for 2006. (However, the company's definition of events is broad—encompassing everything from promotions, streaming online events, and offline events that range from parties to street team efforts.)

While Microsoft's Xbox gaming system has increased its number of marketing events, the brand has actually narrowed its scope. Five years ago, the company participated in a select handful of large industry events. Now, Xbox is doing upwards of 50 events, but they're smaller and more focused, says John Ellard, group manager of global event marketing for Xbox. “Big industry events are not the places where we get our business objectives accomplished,” he says, adding that they tend to be cluttered (there's that word again).

Smaller events, like a recent new product showcase that took place in New York, San Francisco, and Toronto, were geared toward “a very distinct set of media and industry people to give them a specific message about specific products and services that we have.”

Like Triumph Motorcycles, Xbox's Ellard looks to editorial coverage when it comes to measuring ROI. “Everybody who produces events struggles with how [to] measure the ROI, but as we've gotten more focused, we're able to justify [events],” he says. “Getting the right stories written, the right message out?We're able to show that we're successful, and that makes it easy for the decision-makers to say, 'events work.'”

Indeed, events work. They build relationships, they cut through clutter. For guests and attendees, they're fun (usually) and informative (if they're done right). And as Strategic Group's Seth Rodsky points out, they're immediate. “At the end of the day, you can't TiVo a real experience like an event,“ he says. “It happens in real time, and it's something you can touch and feel and experience. It's becoming more and more important to marketers.”

Erika Rasmusson Janes


Photo: Nadine Froger Photography (Xbox)

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