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Blog
July 12, 2021
5
min read

How to Acquire Gen Z Customers via Experiential Growth Marketing

Introduction

In 2020, digital advertising still dominates the marketing world. And according to eMarketer, it’s a $330 billion industry with no signs of slowing down. Ad spend on digital channels is growing exponentially as brands continue to prioritize achieving measurable returns on their investments.

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Source: Digital Ad Spending Worldwide, 2018-2023 (in billions); eMarketer, 2018

Over the past two years, brands have increased their digital ad spend by a whopping 42 percent. The key advantage of digital advertising is the ability to tap into rich audience data to target vast consumer segments -- but advertisers are constantly falling short of deliverability. According to Nielsen’s Digital Ad Ratings service, nearly half of online ads fail to reach their intended audience, so digital advertising may be considered a poor investment for brands spending millions of dollars on online ads annually.

Further, the growth of digital advertising costs is outpacing ROI and forcing successful direct-to-consumer brands to move away from saturated digital performance marketing channels. Instead, they’ve opened in-house content studios to focus on building brand equity. For Zak Normandin, founder and CEO of Dirty Lemon, customer acquisition costs on Instagram increased from under $50 to over $100, resulting in the brand pulling all Instagram advertising in 2018. High demand is driving the high cost of advertising on popular digital advertising platforms, as you can see below. The highest cost-per-click (CPC) appears in younger age groups such as 18-24 and 25-34.

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Source: Instagram Ad Costs: The Complete Updates Resource; AdEspresso, 2018

As brands see diminishing returns and rising costs with digital, they are turning to new channels to acquire customers. This includes leveraging traditional channels enhanced with programmatic technology to enable precision targeting, reporting and measurement. Channels traditionally known for driving pure brand awareness are now able to compete with digital for performance and ad dollars. Today’s brands are using reimagined channels to connect with consumers and accurately measure performance. Enter: experiential growth marketing.

In this guide, we’ll show you how to leverage experiential marketing to grow your brand and acquire customers from the new earning generation called Gen-Z. You’ll learn about the nuances of Gen-Z and their consumption, why experiential marketing is the next frontier in brand growth, and how brands are leveraging connections with consumers face-to-face on a regional, national and global scale.

Let's talk about Gen-Z

Aversions to digital advertising

Digital advertising struggles to connect authentically with the consumer of the future, known officially as Generation Z, or Gen-Z. When attempting to reach young consumers, brands are getting lost in the barrage of ads wherever Gen-Z visits or browses on a daily basis. The overwhelming presence of ads that target youthful, active social media consumers make it harder to reach people genuinely interested in your brand’s products or services.

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Source: Kantar, 2019; UniDays, 2019

Digital advertising behaviors

Compared with their predecessors, Gen-Z is notoriously fickle when responding to digital advertising. The majority of the generation skips ads when viewing online videos, or refrains from clicking or hovering on ads while browsing. The innovation of ad blockers, such as the popular donation-based browser extension AdBlock, furthers hinders viable growth for brands wanting to use impressions to gain exposure online with the new generation. The value in targeting a segment like Gen-Z is that young people are impressionable and more likely to remain loyal to brands before they have direct earning potential. Consumers are increasingly nostalgic, and when they are presented with familiar ideals, they engage emotionally with a brand, more so than if they saw online banner ads.

The rise of Experiential Growth Marketing

Search for efficient growth channels to acquire customers

Traditional channels have been infused with new programmatic technology, including television, direct mail and out-of-home. Experiential marketing is the next channel for the proliferation of growth marketing, especially for reaching the next generation of customers. Gen-Z increasingly prefers experiential marketing, as these consumers seek more authentic interactions with brands.

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Source: Most Influential Advertising Media (Gen-Z Indexed vs. Millennials) in billions; Numerator Insights, 2018

The experiential revolution

Like other traditional marketing channels, experiential marketing is typically associated with goals at the top of the marketing funnel and is commonly used for driving brand awareness through reach and public relations. Unlike its digital counterparts, experiential marketing has not been viewed through a customer acquisition or performance lens measured by return on investment (or return on ad spend).

Few companies can track event ROI

Marketing tools exist to measure the efficacy of every cent that a brand spends on digital marketing. But when it comes to assessing the audience, value and impact of live events, most businesses still operate in a pre-digital age. Without a clear picture of who attends events and engages with a particular brand activation, marketers remain in the dark about the impact on customer acquisition and subsequent sales because they fail to track their return on investment, or ROI.

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Source: Marketers answer: "Can you quantify the ROI of your event?"; Harvard Business Review, 2018

Introducing Experiential Growth Marketing (EGM)

Experiential marketing is reaching an inflection point

New technology enables brands to build experiential activations, deploy them at scale and drive measurable impact on the balance sheet through real life connections. Innovation has paved the way for Experiential Growth Marketing (EGM), a new approach to experiential marketing for brands enabling scalable, data-driven solutions to connect with consumers in natural settings.

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What was once an expensive, hard-to-track investment is becoming a cost-effective process backed by data and measurable results for both emerging consumer brands and established household names.

When comparing EGM activation costs to activating at traditional events like major festivals, the differences in ROI are substantial. Traditional events have hefty sponsorship fees and astronomical activation costs, with a limited number of events that are sponsorable. With EGM, sponsorship fees and activation costs are much lower than one-off events. Your brand can achieve scale and accurately measure sales, distribution and lead generation efforts by hosting multiple activations across a handful of events.

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Source: Sample event activation breakdown and costs; Recess internal data, 2019

The key differentiators for Experiential Growth Marketing are that it’s scalable, data-driven and measurable. The use of EGM strategies on college campuses can help brands create authentic and organic pathways to consumers, especially in regard to the sought-after Gen-Z demographic.

See how Recess can help you reach college students nationwide

Experiential Growth Marketing in action

How brands use EGM to propel real-world growth

Getting started with Experiential Growth Marketing does not have to begin with complex roadmaps and big budgets. Kicking off your EGM strategy can be as easy as choosing a specific tactic and staying true to your brand’s culture. Here, we outline the five simple ways that brands can use to acquire new audiences and drive measurable results with EGM.

  1. Implement data-driven lead generation
  2. Drive retail traffic
  3. Drive on-site sales
  4. Enable content distribution
  5. Build customer relationships

How Vital Proteins implemented data-driven lead generation

At every event or activation, nutrition and health company Vital Proteins polls event participants on brand awareness metrics and records answers with consumer information in real time.  These metrics serve as market research data to determine how and how well the brand is penetrating key markets. After the survey, Vital Proteins provides free cup sized samples to attendees and offers a full bottle sample in exchange for signing up for their newsletter. With this data and customer emails, the brand builds lookalike audiences so they can retarget consumers online and enables them to opt in to their email marketing.

Brands can take note from Vital Proteins and implement data-driven lead generation in real-time by providing a short survey during the entry process to ask consumers to share information in exchange for admission. Details such as awareness of the brand and a customer email can provide a more robust picture of potential and existing customers to inform their marketing strategy and understand where other channels like shopper and digital marketing are effectively penetrating markets.

How Vineyard Vines drives retail traffic

Classic apparel brand Vineyard Vines created a mobile game at national college events which offered attendees chances to win merchandise and in-store promotions redeemable at local stores. The brand chose to sponsor events within a close radius of their retail locations to maximize the potential of acquiring repeat customers.  A digital game students could play on their phone where the browser captured user data and provided a coupon code that was redeemable at their nearby store. The code was also emailed to attendees after the event to encourage them to redeem their discount, thereby increasing store traffic and market share in regional markets.

Your brand can launch event-exclusive promotions to encourage potential consumers to visit stores or ecommerce sites after the event. Unique promotion codes can help attribute consumer traffic and sales to specific events, enabling more transparent ROI data for individual events.

How MillerCoors drives on-site sales

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Beer brewing giant MillerCoors wanted to promote their popular summer beer, Leinenkugel’s, in key markets including New York, Chicago, and Miami. In doing so, they unveiled a creative beer holder called the “Brewey Canoe” as a promo item. Event attendees could play to win their own inflatable Brewey Canoe at these events, driving huge sales and helping them surpass Brooklyn Lager as the top selling craft beer at The Big Apple Barbecue in Madison Square Park. In addition, the number of gifts given to guests provided data on direct sales resulting from the sponsorship activation.

Recess helped MillerCoors achieve broad reach and scale and was able to source and secure value-driven events that matched their niche target market (outdoor millennials looking for weekend events). Brands can further drive on-site sales by offering incentives with small purchases. The upfront cost is low, while return-on-investment is high - and the end result is loyal customers who remember the reciprocation of your marketing efforts.

How Mr. Robot drives content distribution

Popular USA Network show Mr. Robot wanted to launch big with the Gen-Z audience, so they activated content at college campuses in key U.S. markets. A local marketing activation for Mr. Robot was scaled across ten events to help build buzz and promote the show. Before the popular EDM band The Chainsmokers took the stage at each event, the lights would cut out as Mr. Robot “hacked” the jumbotron at the event and displayed a unique teaser trailer promoting the show. On-site attendees shared selfies with Mr. Robot, which they shared on Instagram and Twitter to receive a glow wand with a secret code to watch the first episode and enter for a chance to pay off their student loans in full, reaching nearly 1 million unique subscribers with targeted email blasts.

Content can be repurposed, whether its social video content or other branded content to distribute on-site at events. The branded content could call attention to activations on-site for redeeming offers or codes, which helps cement brand loyalty and improve recall. Your brand can customize content and communications at scale to provide contextually relevant messaging that drives action from consumers.

How Neighbors 2 builds customer relationships

To promote the university comedy Neighbors 2, Universal Studios teamed up with college campuses to create tailored content. Seth Rogen and Zach Efron customized videos for each college involved in the activation, and the localization of the messaging made each event unforgettable which resulted in students sharing the experience on social media.

Much like Universal, brands can leverage existing relationships to create more authentic connections. Connect with key stakeholders on campus through event sponsorships and activations that seamlessly integrate your brand within the student community. Maintaining positive relationships with customers could help them become key influencers and brand ambassadors for future activations and marketing programs.

Conclusion

Today’s consumers demand authentic brand connection in an organic environment. With the advent of enhanced data and forward-thinking innovation, experiential marketing can be a key component of your overall marketing strategy, and can be traced back to actual sales, while providing insight into your ROI. EGM is particularly effective when engaging a younger audience directly at scale, so brands should adapt to meet the consumer where they are -- both physically and emotionally. The meeting point is where long-term customer loyalty begins, and ineffective, costly solutions end.

Key goals for Experiential Growth Marketing

  1. Implement data-driven lead generation - Provide a short survey during the entry process to ask consumers for personal info in exchange for value.
  2. Drive retail traffic - Launch event-exclusive promotions to encourage potential consumers to visit stores or sites after the event.
  3. Drive on-site sales - Leverage time-sensitive promotions occurring the same day at events to incentivize purchase from guests.
  4. Enable content distribution - Customize content and communications at scale to provide contextually relevant messaging.
  5. Build customer relationships - Connect with key stakeholders on campus through event sponsorships and activations.

Recess
Recess
Content Team