Consumer experiential marketing, one of the media industry’s most consistent growth sectors, was dealt a punishing blow by the coronavirus pandemic and its aftershocks this year. After a decade of consistent growth, global experiential marketing revenues are headed for an unprecedented 15.2% plunge in 2020 to $71.32 billion, according to new research from PQ Media. But there is good news for radio stations that have been forced to curb events in 2020. The sector is poised to rebound in 2021 with 6.1% growth worldwide.
The numbers are from PQ Media’s Global Experiential Marketing Forecast 2020 which was released Tuesday. And they likely come as no surprise to scores of radio station event staffers and street teams furloughed this year as station appearances, events, remotes and other face-to-face gatherings were cancelled due to government-mandated restrictions and safety concerns.
Among the hardest hit consumer event markets has been the U.S. – the world’s largest market accounting for nearly half of total revenues – where no experiential channel or category was spared the deep impact of COVID-19.
While 2020 has been marked by the cancellation or postponement of a growing list of music, entertainment and sporting events, overall marketing trends favor experiential marketing in the years ahead, PQ Media says. Branded entertainment and content marketing have become more important components of marketing campaigns.
Both major experiential channels – consumer event marketing and event sponsorships – and all sub-categories such as sports & entertainment, arts & festivals, causes & associations, and mobile road shows & viral events have suffered under the weight of emergency restrictions. PQ calculates that nearly half of the 700+ consumer events tracked across the globe were either cancelled, postponed, or rescheduled for 2021.
The turfed events go beyond huge sponsored events like global concert tours and major sports spectacles like the Summer Olympics in Tokyo. Dozens of local and regional fairs, festivals and other grassroots events, the kind that radio stations are often involved in, endured the same fate. During its first quarter earnings call in June, Townsquare Media reported that revenue for its Live Events segment plunged 46.5% on a pro forma basis, due to a slew of cancelled events. Radio broadcasters are expected to report further declines in events revenue when they begin to report second quarter earnings in late July.
Even political experiential marketing felt the brunt of the pandemic, as local elections, campaign rallies and fundraising events were postponed or, in some cases, moved online with marginal success.
Global experiential marketing growth outpaced that of the overall advertising and marketing industry, as well as nominal GDP by 1-3 percentage points throughout the 2014-19 period. U.S. experiential marketing revenues grew 6.8% to $40.37 billion in 2019, according to the PQ Media forecast.
“Experiential marketing has steadily become more important to brands over the past decade because live experiences, such as music festivals and sporting events, provide excellent opportunities to engage younger, more mobile and tech-savvy demographics, such as Millennials and iGen,” said PQ Media CEO Patrick Quinn. “In the years ahead, we expect to see brands move beyond one-time brand activations to evolve their relationships with target audiences and diehard fans by using advanced smart technology marketing, tracking, and analysis tools to create more branded experiences that bridge the physical, digital and virtual spheres.”
Bridging in-person and virtual events is a trend likely to gain momentum with a pandemic that has no end in sight. On Tuesday iHeartMedia announced that its benchmark iHeartRadio Music Festival, traditionally held in Las Vegas in the fall, would be staged as a virtual event for the first time in its 10-year history. The National Association of Broadcasters converted all three of its major conferences – NAB Show, Radio Show and NAB New York – into digital events in 2020. The trade group is thinking about how live and digital events can complement each other in the future.
“The strong desire to gain brand awareness among target audiences, create positive brand associations and, ultimately, produce sales lift will continue to favor consumer experiential marketing in the post-pandemic era,” Quinn said.