Trade Shows Evolve

New technology, new marketing and the positive side of downsizing

The grand exhibitor booths with heavily padded plush carpets are dwindling. The “what-do-I-do-with-this-now?” trade-show giveaways are disappearing. In their place are the tweets of targeted audiences and the faces of higher-level attendees. From social networking to creative cost-cutting measures, the result is a more strategic trade show where show organizers and exhibitors can see a greater return on investment despite a sluggish economy.

Economic Indicators

In 1960, McCormick Place opened in Chicago as the first purpose-built exhibition center, ushering in the trade-show industry. Since that time, there has been only one economic downturn in the industry: From 2001 to 2002, there were six consecutive quarters of negative decline in attendance numbers. But just two years later, the industry bounced back to its pre-2001 numbers. The annual nature of most shows and the fact that many are pre-booked years in advance create a longevity and bounce-back effect not found with traditional meetings.

“The trade show industry is resistant to decline and resilient to recovery,” says Doug Ducate, president and chief executive officer of the Center for Exhibition Industry Research. “Annual events might hit the [sales] cycle just right and not experience a decline.”

Ducate says we are now experiencing eight consecutive quarters of downturn and it is likely the second quarter of 2010 will be the ninth quarter of decline. “While the declining show metrics have stabilized to some degree, there is little improvement,” Ducate says. “We really don’t expect to resume growth before 2012.”

Since trade shows mirror the industries they serve, Ducate believes you can monitor signs of recovery by looking at the success of shows in industries that were severely affected by the economic downturn. For example, the building and construction industries are a food chain for many products and shows in these sectors are precursors of what to expect in the trade-show industry in the coming year. “The building and construction shows did not reveal marked improvement,” Ducate says.  “The fact that their losses were less severe than 2009 provides little comfort.”

Lew Shomer, executive director of the Society of Independent Show Organizers, saw a 7 percent to 11 percent decrease in attendance in 2009, but is now seeing an increase between 5 percent and 20 percent in 2010. He believes the annual planning calendar for expositions can create a lag time in revealing economic impact. Since many of their shows are planned one-to-three years in advance, the industry will trail an upward or downward trend. “Revenues will be down in 2010, but up in 2011 based on what we are seeing in attendance increases,” Shomer says.

Doug Miller, partner and president of Urban Expositions, which produces gift shows across the country, says his company started feeling an economic impact during the summer of 2008 when booth sales and attendance were down by 10 percent. But from January through March of 2010, his company has produced six shows, each with an increase in attendance numbers. “There is a little more optimism out there and attitudes are much better than they were before,” Miller says.
“I still think the economy is rough, but I do see positive signs.”

Miller’s Las Vegas Souvenir and Resort Gift Show, an annual event that is national in scope for this industry, was up in booth sales by 65 percent in 2009 over 2008, and he’s sold 50 percent more space for the 2010 show than he did in 2009. “We actually had to stop selling space,” Miller says. “We want to make sure we have enough buyers [for all these exhibitors].”

Dan Strother, senior communications manager for Agilysys, has seen a significant decrease in attendance at the shows his company participates in, but the level of attendee has improved. “The positive side is we are seeing a higher executive level and a more highly-qualified attendee base,” Strother says.

A Strategic Trend

As trade-show organizers and exhibiting companies look to maximize value for their shows, strategic audience acquisition has become a focal point. It’s not enough just to fill the exposition hall with a large number of attendees; the presence of decision-makers is key. “We have to make sure we’re speaking to the right audience,” says David Ecton, director of marketing for Syscom Technologies. “The recruiting process has to be tight and specific.”

For Ecton, exhibiting at a boutique show appealing to his niche market produces the value for dollars spent. He calculates the number of attendees his staff can speak to in an hour and sees a greater return with smaller shows. “The bigger the trade show, the less of a return-on-investment we get,” says Ecton.

But it’s not just the level and number of attendees exhibitors weigh when they plan their annual show calendar. Companies review networking opportunities against travel and overall show expenses. “Exhibitors must identify the premier events in which to bring their products to market, including where they can see the most buyers, make the most connections and get the most value,” says Marian Bossard, vice president, meetings and events, Toy Industry Association (TIA). “Attendees, including retail buyers, are also being more selective in the trade shows they attend, including travel and time away from the office.”

Pre-scheduling appointments between buyers and suppliers is considered the best method of ensuring a targeted attendance. When trade shows are boiled down to buyer and supplier doing business, the need to book a big stand and spend money looking more attractive than those around you is eliminated.

Cost-saving Measures

There has been a metamorphosis since the days of mega booths, when more exposition real estate was equated with attracting more attendees and generating more leads. A table-top display can provide as much, if not more interaction with an attendee as a mammoth booth structure. By eliminating the cost and distraction of a flashy or gimmicky booth theme, exhibitors can draw serious buyers wanting more than the free giveaway.

Steven Hacker, CAE, president of the International Association of Exhibitions and Events (IAEE), sees exhibitors refurbishing existing booth properties and looking at cost-effective options for construction and shipping costs. “Many are refreshing exhibits used before in lieu of building new exhibits,” Hacker says. “Exhibitors are taking advantage of lighter-weight materials to construct exhibits, thus reducing shipping costs.”

Other companies are opting to rent some or all of their booth properties to save on storage costs. Elements that require a change from show to show like graphic walls can be rented to reduce design costs. “A growing number of exhibitors are getting much more for much less by leveraging strategic exhibit rentals,” says Dean Marks of The Taylor Group, a global event design company headquartered in Toronto. “Renting assets altogether or combining owned exhibits with temporary rentals is providing much more of the bang with much less of the cost.”

To assist companies in trimming their budgets, many show organizers are subsidizing exhibitor expenses.  From hotel discounts to packaging show services at a discounted rate, show producers are becoming creative in their value propositions. “Exhibition organizers are packaging more elements than ever before. Some are including material handling in their space rates,” Hacker says. “Others are allowing payments for exhibit space to be paid over time. There is a great deal of innovation taking place.”

The Professional Convention Management Association (PCMA) offered creative savings options for its annual meeting in Dallas in January. The association allowed members to pay for their registration fees with Starwood Award points instead of cash. And like IAEE, members were offered a payment plan and could split their registration fee payments over two years.

Urban Exposition’s Doug Miller has shifted his marketing dollars to complimentary programs that will help gift and resort show exhibitors cover costs. A certain level of exhibitor recommended by buyers can receive free hotel rooms, lunches or airfare. His “Hotel Buy-down” program reduces the rate of hotel rooms across the board for all exhibitors. Miller secures a block of rooms at a discounted group rate and further discounts the cost to his exhibitors, subsidizing the difference. Miller was able to secure a rate of $79 per night for exhibitors at his San Francisco International Gift Fair, a new show on his 2010 calendar. For the Las Vegas Souvenir and Resort Gift Show, he achieved an incredibly low rate of $15.99 per night at the recently renovated Tropicana hotel. “We’ve spend more money on advertising shows, but I think it’s paid off,” Miller says.

The Toy Industry Association assists its members by subsidizing 30 percent of advance warehouse and freight charges. To help exhibitors prepare for its 2010 Toy Fair, TIA also launched the “Customer Cost Review Process.” The association’s meetings and events team analyzed each exhibitor’s specifications from booth space and décor to manpower and travel costs. “Then we made recommendations as to where they could realize cost savings and greater efficiencies,” Bossard says. “To date, feedback from exhibitors who have taken advantage of this new service has been positive.”

Technological Trends

From social networking to going green, trade shows are elevating their efficiencies and marketing endeavors to meet industry trends and consumer demand. TIA has implemented a number of technologies in an effort to eliminate paper waste and become more environmentally sound.

In lieu of the traditional printed trade-show directory that guides attendees through the show, TIA installed electronic wayfinder kiosks, which help locate a particular exhibitor in the marketplace or in one of the show’s specialized product zones. TIA also uses a mobile technology called ChirpE that allows attendees to search for exhibitors and products and navigate the show floor on their personal digital assistants (PDAs).

“Traditional printed paper materials no longer provided a progressive or eco-friendly way to communicate,” Bossard says. “We are eager and excited to expose exhibitors and buyers to a more technologically rich Toy Fair experience.”

Shomer also sees an initiative to eliminate paper information through a snippet computer programming code sent through an attendee’s smart phones or mobile devices that accepts e-mail. Attendees are given a list of exhibitors with assigned catalog numbers. If they want more information from a specific company, they enter the catalog number into their smart phones and the exhibitor’s product information is sent to their computers at home. “It enables attendees not to be burdened with printed catalogues as they walk around the show floor,” Shomer says.

Strother’s company also supports the green environment philosophy by no longer shipping promotional/product brochures. Agilysys has developed an online system with an electronic library of the company’s collateral materials. “Attendees simply log into a computer terminal located within our trade-show booth and e-mail the literature of greatest interest to their needs,” he says.

The use of technology can also help reduce an exhibiting company’s onsite staff. Ducate has seen companies with Internet or instant message capabilities at their booths allowing a salesperson to chat real-time with their manufacturing plants.

“In the past a salesperson wouldn’t know the answer to a question and had to say ‘let me get your name and have someone contact you,’ which may nor may not happen,” Ducate says. “The link back to the technological person allows the question to be answered immediately.”

This need for real-time information and a desire to communicate with a mass number of potential buyers has brought forth the era of social networking at trade shows. Exhibition organizers create Facebook pages and open Twitter accounts to promote their events and post updated information about their shows. Both vehicles allow show producers to track the pre-event buzz for their shows as well as disseminate information during show hours.

“If something on the show floor is exciting, social media can get the word out real-time,” Shomer says. “You don’t have to wait until it appears in the newsletter the next day.” Shomer says event organizers can also use these social media tools to remind attendees of their attendance at educational sessions. A message can be sent to the attendees’ smart phones alerting them that the session starts in so many minutes.

Communicating with your audience is a year-round marketing requirement now. Keep the dialogue going using blogs, podcasts, Facebook, Twitter and other outlets that will keep potential attendees interested in your show after its over and before the next one opens.

The Future of Trade Shows

The virtual trade-show concept has been tried and tested with mixed results. While this technological advancement would certainly eliminate a myriad of on-site show costs, the key benefit of live customer interaction and relationship building is gone.

“A virtual trade-show concept would certainly be challenged to match the impact offered by the traditional trade show model with respect to face-to-face meetings between customers/prospects and suppliers,” Strother says. “I believe the concept is a ways off from becoming a reality.”

Syscom’s Ecton believes the concept works better for buyers who cannot travel and must depend on online tools to make their purchasing decisions. “Virtual trade shows can be confusing and cumbersome,” he says. “The concept is better marketed to IT people who can’t leave their desk.”

Virtual platform developers say that these events attract two to three times the attendees seen at physical meetings. However, many show producers are concerned that the virtual option will eventually eliminate live events. In many cases, a virtual concept can supplement a live show or only replace it when the percentage of members attending is too low to warrant the cost of a physical venue.

As a potential source of non-dues revenue, blending a virtual concept with a live meeting can increase incremental revenue for the organization. The trade show can be included in the registration fee for the onsite meeting, while the educational sessions can be streamed real-time or archived for later viewing for an additional fee. If your organization is offering continuing educational units (CEUs), attendees who cannot attend the show often will pay for the online sessions.

The American Society of Association Executives (ASAE) is offering this blended live meeting and virtual component for its 2010 Annual Meeting and Exposition. According to John Graham, ASAE’s president and chief executive officer, the organization will stream all three general sessions as well as 24 other sessions throughout the conference. The sessions will be archived and available for viewing for 90 days.

“The fee to attend virtually will be about 20 percent less than the regular registration fee,” Graham says. Since this is the first time ASAE is offering the virtual component, Graham says he has no concrete expectations for registration numbers.

Whether it’s a traditional trade show or a virtual experience, both exhibitors and buyers need to establish return on investment (ROI). By measuring results, companies can justify their expenditures and provide stakeholders with a line of revenue attributed directly to the show. The Center for Exhibition Industry Research has an ROI Calculator companies can use to convert the contacts made at a show to a dollar amount.

By subsidizing exhibitor costs and packaging value-added items, show organizers can create the return companies are looking for. “Companies want to know what the return on investment is going to be and what the show organization is providing to give them a better experience,” Shomer says. “Exhibitors are no longer buying booth space; they are buying a value package.

Monica Compton, CMP, an event specialist with Atlanta-based Pinnacle Productions Inc., is a columnist for Connect. She presented several education seminars at Connect Marketplace.

Read more on trade shows:

Case Study: PRINT 09
Chris Price, Vice President of Graphic Arts Show Company, discusses the challenges he faced planning last year’s PRINT 09 exhibition during a down economy.

Case Study: NEO conference
Janet Graff, CMP, plans NEO – The Conference for Neonatology every year. Read about how she dealt with issues this year regarding room blocks because of frequent changes in sponsor and exhibitor personnel.

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