Measuring brand activations in the digital age with 'return on experience'

Stefan Tauber, Experience Strategist, New York

Experience marketing may be on the rise, but that doesn’t mean that the marketers aren’t being smart about their money. When planning an event or pop-up, CMOs have gotten more savvy about nailing down the hard numbers that justify their spend. They want to know how many people they can expect, what the impact of their visit will be, and if they will tell their friends on social and IRL.

The problem is that physical activations and pop-ups have seldom been translated into hard numbers. Brands used to measure their success on a single attribute: attendance. A long line leading around the block was the ultimate signifier of success and often merely having a pop-up and existing in real-life checked all the boxes. However, with more brands embracing physical experiences and CMOs allocating more of their beloved budgets to them, the ways to measure those types of activations and events has needed to mature.

Enter Return On Experience or ROE - the answer to successfully measure the direct impact of a brand experience on a consumer.

Like ROI, ROE represents a standard formula for quantifying the success of any experience – proving the direct impact of a brand experience on a consumer, which can only be measured if a human actively participates and engages with the experience. In that sense, it's the only active measure of engagement that promises to refine the experience industry for the digital age.

Defining “Return On Experience”

To date, ROI has been the go-to efficiency measure for brands, and it’s easy to see why. The equation is simple: brands spend dollars on extensive ad spots and campaigns that they hope millions of consumers will see. The ROI would then be measured across media channels in terms of eyeballs, impressions and reach - all passive measures of engagement. The brand’s effort and reach would start and end with the content the brand provided. ROI is a really good measure for ads but it utterly fails in assessing the impact of physical experiences.

With that in mind, ROE can't just solely be seen as an infantile unit of measurement but rather as a reliable tool that stands tall next to ROI. Brand experiences, though, are less passive, which can make it complicated for brands when it comes to measuring their impact. They actually rely on consumers to actively participate, co-create, and share each and every moment, demanding a more compatible, effective form of measurement: ROE.

So how is ROE quantifiable? It captures, attributes, and measures the entire short and long-term impact experiences have on consumers and how it is amplified across their network online and IRL. Separated into two phases (Attraction and Connection), experiences use a combination of digital and analog tracking methods to measure total attendance, RSVP conversion rates, total time spent at an experience, social reach and share rate, content type, word of mouth and more, putting them through a formula that then quantifies the experience’s overall effectiveness.

What makes ROE different

The foundation of the ROE measurement method itself isn’t anything fundamentally new. Marketers have used similar methods to track reach and impressions throughout digital channels for years. However, within a digital realm, they truly only tracked devices and digital engagements, not actual humans.

Measuring the ROE is significantly more complex than tracing online journeys and using digital turnkey solutions to track ROI. In a physical space, measurements are both qualitative and quantitative and only a few marketers and brands have actually attempted to measure the ROE of physical experiences and more so, their impact on digital sharing.

Another variance in ROE is the way quantitative data for attendance is handled. In a digital context, the ROI of an ad ends with a view or click. Consumers rarely share ads, let alone talk about them with friends. Attendance in an ROE-measured event, however, doesn’t just end with a customer walking into the experience. In fact, it’s just the beginning of an amplification process that has to consider word-of-mouth, time spent with the brand during the experience and shareability throughout.

A true form of experience measurement

Brands have to continue planning well ahead before launching any activation, event or pop-up to lay out the infrastructure for a successful measuring process. It's quite possible, for instance, that an event with a long line may have a severely low ROE because lacklustre brand experiences trigger absolutely no sharing or interaction. In that sense, ROE can be a very accurate and unforgiving measure. But what CMOs should also recognise is that ROE is the only self-driven and uninterrupted human measuring method when it comes to their physical brand experiences. It’s where the true value of these experiences comes into play.

Unlike digital or traditional ads, brand experiences touch consumers on a more visceral, full-sensory level. A positive experience at a brand’s activation, event, or pop-up will trigger consumer sharing, sampling and ultimately, a purchase. While ROE doesn’t necessarily provide all of the hard numbers marketers crave, it can most effectively shed light on experience conversion rate, from physical attendance to social share-ability to continuing brand engagement. In an industry where the ROI model is hard to compute, ROE offers its own unique set of insights and data, giving marketers a valuable tool to learn how consumers actually engage with and experience their brand. That in itself is worth justifying.