Here is a brief excerpt from an article by Frank Rose for strategy+business magazine, published by Strategy&, PwC’s strategy consulting group (formerly Booz & Company). A he explains, there are reasons why the most successful advertising today convincingly takes on the qualities of real experience.

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Illustration by Federico Jordan

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In the early 1990s, a young Mademoiselle editor named Kate Brosnahan and her soon-to-be-husband, Andy Spade, launched a company they called Kate Spade Handbags. Like most startups, this one didn’t have money to advertise. But as it turned out, the company had something better than ads: It had a story.

The couple had met years before while working in a clothing store in Arizona. After moving to New York separately, they met again and fell in love. They had a shared aspiration: to live a luxurious but unpretentious life, surrounded by congenial things. Both were attractive and well connected—Andy the brother of actor David Spade, Kate an intrepid but preppy girl who had once worn pink crewneck sweaters while waitressing at a motorcycle bar—and they had given their all to finance their startup, emptying out Andy’s 401(k) account and using their apartment as a warehouse. But although they cheerfully put themselves forward, their new company’s story was not primarily about them. It was about a way of life they knew, and that they could help others enter.

Every decision they made—where to open their first store (downtown Manhattan, in SoHo, in 1996), what color soap to put in the bathrooms, whether to just sell handbags or to also sell flowers in the shop—was part of this story. “It was about this world we were creating, which was about graciousness,” Andy Spade told Inc. magazine in 2013. “We built it around Kate’s personality.”

Because they knew how to consistently evoke that feeling of graciousness, they were able to expand their company’s product line beyond handbags to include such diverse items as stationery, clothing, jewelry, shoes, beauty products, eyewear, china, and wallpaper. The Spades sold majority ownership of the company to Neiman Marcus in 1999, after which they moved on to other ventures. But the company kept using their story, and kept growing as well. Today, Kate Spade & Co. is a US$740 million operation with nearly 200 stores around the world.

Kate Spade was hardly the first fashion brand to inhabit a self-generated fantasy environment; Ralph Lauren had been doing as much since the late 1960s. Nor would fashion be the only product category to benefit from an all-encompassing approach to retail and product design—as companies such as Apple and Nike have demonstrated. These enterprises don’t just sell products; they sell an experience. But many others have tried to take the same approach and failed, because the requirements for success with this kind of experience are seldom fully understood or appreciated.

Immersion is the experience of losing oneself in a fictional world.

It’s what happens when people are not merely informed or entertained but actually slip into a manufactured reality. J.R.R. Tolkien, who created one of the most immersive tales of all time in his Lord of the Rings trilogy, described it as “the enchanted state,” the frame of mind in which we are so in thrall to a story as to have entered a world of the author’s creation. The power of this kind of experience is sometimes overlooked because it defies empirical assessment. Not only is it inherently subjective—how do you quantify enchantment?—but the term immersion is a metaphor derived from an entirely different state, the physical experience of being underwater. To be immersed, as Georgia Tech digital media professor Janet Murray observed in her book Hamlet on the Holodeck (Free Press, 1997), is to be “surrounded by a completely other reality, as different as water is from air.”

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Here is a direct link to the complete article.

Frank Rose is a senior fellow at the Columbia University School of the Arts, where he leads an executive education seminar in digital storytelling strategy, and the author of The Art of Immersion: How the Digital Generation Is Remaking Hollywood, Madison Avenue, and the Way We Tell Stories (Norton, 2011).