Spotlight:
Agencies

Experiential Marketing Agencies vs. Advertising Agencies

Who Should Do The Work

By Tim Young, President

Would you really hire your Advertising Agency to do your Experiential Marketing? Believe it or not it is true. At least according to the 13th annual IEG/Performance Research Sponsorship Decision-makers Survey published in the IEG Sponsorship Report on April 22, 2013.

According to IEG, it really is true based on those marketers that responded to the survey. Of those that responded, 63% said they use an Advertising agency to support their sponsorships while only 60% use a Marketing agency. Only 23% of companies manage sponsorships completely in-house. Going back to 2009, that number was nearly 50% who managed everything in-house.

Sponsorship Agency Table

Needless to say, this raises more questions than answers. It isn’t surprising so see companies shift their work out to an agency with all the downsizing that has taken place since 2009. What is surprising is that somehow Advertising agencies have become the catch-all group. Advertising agencies certainly have evolved over time and now they could encompass the following experts.

  1. Advertising
  2. Strategic Planning
  3. Creative
  4. Digital
  5. Social
  6. Experiential
  7. Sponsorship
  8. Etc.

While many agencies certainly have all these experts, many other clients have dedicated agencies for each of these examples. Few advertising agencies truly have their arms wrapped around all of these moving parts. Is it easier to just use one agency for everything? Probably. Are you putting your best marketing foot forward in doing so? Probably not.

Facebook went from nothing in 2004 to a bazillion users today. That same year Google opened their IPO. Twitter was just a glimmer. Experiential marketing was just called Promotions. Look how much has changed in just the last nine years. Clearly, owning and being an expert in all of these marketing tools is next to impossible.

According to IEG, sponsorship spending is expected to hit $20 billion this year in North America which is up 5.5% over last year. Advertising is only expected to grow 2.6% so maybe this is just an attempt to keep a bigger piece of the pie, or hold on to that pie. As clients evolve they see a greater need to put their product in front of the people. As we say, you can’t DVR a live event and skip the commercials. So it could be considered one of your most important strategies you have to market your product.

Sponsorship Spending Table

Go to the experts to help. One of Southport Marketing’s key pillars in its business is to help agencies become experts in this space. Some of our biggest revenue sources are in fact agencies and their clients. Delivering true value by helping blend an advertising strategy with an experiential strategy is where clients really find value. They lean on us to provide that expert analysis and flawless execution for their clients.

 

Sports gets 69% of the sponsorship spending this year but is that really the best place to gain quality interaction vs. Festivals which only gets 4% of the annual sponsorship spend. Ticketed, timed events (sports) are often difficult to activate at. Festivals provide a relaxing environment for the consumer. Sponsors can have a much more meaningful conversation with a consumer in this setting. It would be similar for the Ad guy to spend his money on NBC or AMC. NBC will reach the masses and cost more but AMC might be more impactful.
Sponsorship Share Table

Sponsorship Spend Type

There’s no question that media is still the big dog and gets the most money to market. So clearly an Advertising agency should be driving the strategy bus. The best blend is to then bring in dedicated experts to fill the other marketing tactics like digital, social and experiential.

Would you hire an Experiential Marketing Agency to do your Advertising?