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Investing in Experiences: Why Brands Are Allocating More Budget to Experiential Marketing

Feb 242 min read

The Shift Towards Experience-Driven Marketing


Maybelline - Madame Tussaud’s Sydney - Feel the Fashion: An Immersive Experience

With consumers bombarded by 4,000 to 10,000 ads per day¹, most of them are ignored, skipped, or forgotten. In response, brands are shifting their marketing budgets towards experiential marketing—creating immersive, real-world interactions that forge deeper connections.


This isn’t just a trend; it’s a strategic move backed by data. Global spending on experiential marketing is projected to hit £100 billion ($128.3 billion USD) in 2025², exceeding pre-pandemic levels. Why? Because experiences don’t just capture attention—they create memories that drive action.


How Much Should Brands Invest in Experiential Marketing?


Marketing budgets vary, but the sweet spot for experiential marketing is typically between 10-30% of a brand’s total marketing spend³. Some industries are investing even more:


  • Beauty & Skincare: 84% of companies have increased their experiential budgets over the past three years, with two-thirds allocating **10-30%**³.


  • Retail & Consumer Goods: Experiential marketing accounts for 20-50% of budgets in highly competitive categories⁴.


  • Technology & Automotive: Major brands are reallocating budgets from traditional media to brand experiences, focusing on interactive demos, pop-ups, and immersive installations⁵.


Why Allocate More Budget to Experiential Marketing?


  1. Ad Saturation is Driving Consumers Away

    People are tuning out digital ads. 47% use ad blockers⁶, and 86% skip TV ads⁷. Experiences cut through the noise by offering something interactive, memorable, and engaging.


  2. Experiential Marketing Delivers Stronger ROI

    Traditional ads provide fleeting impressions, but brand experiences create deeper emotional connections. Studies show:

    • 91% of consumers feel more positive about a brand after an experience⁸.

    • 74% are more likely to buy a product after engaging in a brand activation⁸.

    • 98% of consumers create content during brand experiences, with 100% sharing it online⁸.


  3. Brand Differentiation in a Crowded Market

    With competitors flooding digital channels, brands need unique, hands-on experiences to stand out. Whether it’s phygital experiences (AR-enhanced activations), immersive pop-ups, or live product trials, experiential marketing builds brand affinity in ways that traditional ads can’t match.



How Brands Can Make the Shift to Experience-Led Marketing


  • Allocate 10-30% of your marketing budget to experiences – Experiment with interactive activations, live demos, and immersive brand spaces.

  • Bridge Digital & Physical – Use phygital technology (QR codes, AR, interactive displays) to seamlessly connect online and offline engagement.

  • Encourage User-Generated Content – Design experiences that people want to share, turning customers into brand advocates.

  • Track ROX (Return on Experience) – Measure success through dwell time, engagement, brand recall, and social amplification, not just clicks and impressions.


Why Experience Marketing is No Longer Optional


The brands winning in 2025 and beyond aren’t just focusing on reach—they’re investing in engagement, interaction, and lasting impressions. Consumers crave authentic, immersive experiences, and brands that prioritise them will see higher returns, stronger loyalty, and greater differentiation in the market.


At Watch This Space, we design brand experiences that cut through the noise, engage customers, and deliver measurable impact.


Ready to shift your budget towards brand experiences that matter? Let’s talk.




 


 
 

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