Creative Transformation Festival now Live

Explore our new sections and topics

Moving toward a sustainable future: The innovation and transformation of the food industry

Kees Kruythoff

chairman and chief executive officer

Sir Martin Sorrell

founder & executive chairman

‘A year like we’ve never had’: agencies’ relief as ad budgets return to experiential

Bombay Sapphire’s first IRL activation of 2021

As the lockdown restrictions lift in the UK and US, marketers are mulling a return to experiential marketing.

For over a decade, experiential marketing had seen exponential growth as marketers pumped budgets into big-ticket sponsorship and local activations to bring their brands to life. Over $84bn was spent globally on the medium in 2019. Then Covid struck.

Sporting events were postponed, festivals shut down and high streets deserted, leading the sector to plunge 15% overnight according to stats from PQ Media.

“We didn’t think it would last the year – we thought there would be a V-shape in 2020 and we would be back up in Q4,” recalls Elena Klau, global chief strategy officer at Momentum Worldwide. That was not the case, and the sector has continued to struggle into the first quarter of 2021. However, as lockdown restrictions ease, experiential is once again attracting brand budgets.

“There is pent-up demand to go back to live experiences, make no mistake,” says Klau of the trend she’s seeing in the US. “We are anticipating a year that we have never seen in the agency’s lifetime.”

But there is hesitancy across the pond. In the UK, Appear Here helps companies to book vacant retail space to use for as little as a day to several months. It’s partnered with Transport for London, for example, to manage empty stores in tube stations like Old Street, where it recently worked with Netflix on a series of activations for its show Stranger Things.

Its chief marketing officer, Gaston Tourn, says this month he has seen a surge in clients keen to pick up where 2019 left off, though mixed communications from the government have left an element of uncertainty and hesitancy to pull the trigger on any activations.

“From June 21, the government said all legal limits on social contact ‘will be removed’, but at the same time, they mentioned they will lead with ‘data, not dates’. In this unpredictable scenario, brands are trying to figure out the best time for experiential that makes the most of ‘the moment’ and is at a time when footfall is guaranteed,” Tourn explains.

“At the moment, it looks like the end of June feels like the starting point for seasonally relevant products. Lots of brands are trying to take advantage of the ‘staycation’ summer madness. For aseasonal brands, September looks like a more common start.”

Budgets per activation are in the same place as pre-pandemic, he said, but the frequency is down.

Though some advertisers pulled budgets completely at the start of lockdown, a significant cohort pivoted to digital. Momentum Worldwide had been building its virtual capabilities for some time, but Klau says Covid accelerated this division.

“Consumer adoption and appetite never made the ROI make sense pre-Covid as the adoption rate was too low. But Covid was an accelerant. Behaviors like attending virtual events, doing screenings, attending virtual panels – they skyrocketed. We saw massive participation as people were used to it. That was all possible because of Covid.”

For example, it created a virtual ‘campus’ for American Express to host events for business owners and saw a triple-digit increase in people attending versus what it would typically see for a similar in-person event. The agency was also behind Verizon’s work for the Super Bowl earlier this year, where it created a virtual stadium within online game Fortnite.

Covid acted as a springboard for adoption, and Klau predicts that brands will now look for both a physical and digital element to all experiential activities.

Like many businesses, Santander embraced virtual activation. It pivoted in-branch events and ran a series of online fraud and scam awareness events instead. A national virtual Careers Fair replaced its usual in-person event and attracted 2,600 attendees. As lockdown progressed, it partnered with Twinkl, an online education platform, to create a digitized version of the Numbers Game that has reached over 120,000 teachers, parents and children since June 2020.

“We saw it as an opportunity to learn and try new things,” says Melanie Noakes, head of sponsorship and events. She adds that it plans to have a blended approach to its experiential marketing going forward. “We’ve also trialed new virtual event formats for colleagues that have had encouraging results and feedback.”

Appear Here’s Tourn says we will see a focus on local ‘neighborhood’ activations from advertisers. “Brands are increasingly renting storefronts next to places where people work, eat and seek entertainment. You don’t need to be in central London to get people’s attention. Most savvy brands are launching in neighborhood spaces to connect with local communities.” Demand for stores in ‘cool neighborhoods’ versus city centre high streets has gone up by 56% compared to pre-Covid.

Tourn also predicts that brands will focus experiential activity in public spaces, rather than creating closed-off events. “People want to congregate outside in parks and restaurants. That’s an experience where brands are looking to see how they can help and play a role in even those in-between spaces. It’s really a pretty broad spectrum in terms of how brands are looking to come back.”

Bombay Sapphire is one such brand experimenting with a return to experintial with small, local, activations. The gin brand has been a major investor in experiential marketing as part of its long-running ‘Stir Creativity’ campaign tying the brand to cultural trends in the art world.

“It has always been a very important part of our brand,” Natasha Curtain, the global vice-president, told The Drum, pointing to various experiences around the world where it has worked with artists to create immersive installations.

It recently returned to experiential on a smaller scale, in partnership with the Design Museum. It took over the museum’s high street shop for a week, stocking its shelves with essential items packaged in artworks created by a line-up of emerging artists.

It is keen to get back to the larger-scale events it hosted previously, but Curtain admits consumer behavior has changed in such a way that it will have to blend experiential activity: “Emerging out of Covid, we’ll look to be present both live and digitally.”

Santander’s Noakes is upbeat about the return to experiential. “I’ve genuinely never been more excited for our industry. People globally have understood and felt the importance of face-to-face engagement, the richness of experiences and the value that they bring. While coming out the other side of the pandemic brings many challenges and complexities as we navigate both the emotional and physical reality of hosting events in a post-pandemic world, event planners have always been creative, adaptive and flexible,” she says.

“We are masters of human connection and reinvention and those skills are all going to come to the fore. Yes, planning will offer some new challenges, some new scenarios we need to consider and plan Cs and Ds rather than just plan Bs, but I think as an industry we’re constantly proving we can adapt to change and find new solutions. I loved seeing the creativity through lockdown and I’m excited to see what comes next.”