All Is Not Well
By Michael Hough -- Tradeshow Week, 11/24/2003
I keep hearing from our industry spokespeople that all is well with exhibitions and tradeshows. The latest is a statement in a publication read by our exhibitors that proclaimed "... the fact is there are mega shows that are doing exceedingly well ..."
This may be a good spin for external consumption but the fact is that most shows are not doing exceedingly well. The anecdotal feedback I am getting directly from show managers is that a lack of qualified attendees is their No. 1 problem — and the primary reason why exhibitors continue to scale back their involvement in shows.
To test the validity of this hypothesis, I researched Tradeshow Week data on all shows over 150,000 net square feet held from January through June 2003. Here is what I found:
- The 81 shows had an average 2.2-percent increase in attendance.
- But 36 of the 81 shows (or 44 percent) declined in attendance between 2002 and 2003.
- Four shows that moved to Las Vegas in 2003 had an average increase of 49.6 percent. The other 77 decreased in attendance by 0.8 percent.
I would venture to say the actual situation is probably worse, because it is well known that many shows exaggerate their numbers.
Our industry spokespeople want to call this decline a temporary fluke due to Sept. 11, the economy or other such fleeting phenomena. They say we will eventually return to the glory days of the late '90s. I do not agree, unless we as an industry act in concert.
In my opinion, we have a systemic problem: Many qualified buyers are not attending the events we produce because they no longer perceive a value in them, or their bosses do not perceive they have a value to the business. This is particularly true among the next generation, who believe they can learn everything needed right at their desktops.
What to DoWe as an industry must come together to re-establish the intrinsic benefits of meeting face to face. This has been the objective of the Exhibition Industry Promotion Campaign, which I helped launch in 1995 but which has languished over the past few years.
This opinion is confirmed by a recent study conducted by Jacobs Kenner & Kent. They surveyed 120 high-level executives who organize conventions and exhibitions. Seventy-two (half association, half for-profit) said their highest priority would be to "create and implement an industry promotion campaign." Very few mentioned reducing exhibitor costs as a primary issue, but that is what our appointed spokespeople claim is the industry's problem.
We need to completely reinvent this industry promotion campaign as follows:
- Appoint a nonpartisan umbrella group to manage the effort — one that is widely respected by everyone in the industry.
- Undertake fresh and relevant research that will establish the bottom-line value of attending events, such as, "Those who attend their industry's annual convention are 27 percent more likely to be promoted."
- Disseminate this research widely via a comprehensive advertising and public relations campaign aimed at C-level executives in corporate America, just as magazines and other media do.
- Appoint a charismatic spokesperson to act as chief marketing officer for our industry. This person would be responsible for speaking out publicly on our behalf, such as extolling the industry's virtues on CNBC. And this CMO should be an executive who has actual experience producing large and successful events.
Wouldn't such a campaign cost many millions? No, because the ads (which typically represent the primary expense) would run gratis in the 300-plus business-to-business magazines owned by the media conglomerates that also have a huge stake in the success of tradeshows. I estimate a comprehensive (and successful) campaign would cost less than $1 million per year.
How to finance such a campaign? Certainly not by taxing our exhibitors as the Voluntary Contribution Plan does. Instead, all should directly contribute commensurate with the benefit they will receive from a more robust meetings industry. Here is how this would work:
- The $1-million yearly cost would be allocated equitably among the various industry segments based on the relative financial benefit they receive from events, such as: show organizers, 60 percent; direct suppliers, 30 percent; and indirect suppliers (e.g. hotels), 10 percent.
- Everyone from each segment then contributes according to an agreed-upon formula. One such formula (as applied to for-profit organizers) could be "one-tenth of 1 percent of net profits." A formula for CVBs could be "three-tenths of a cent per net square foot for all Tradeshow Week 200 shows held in their city." And so forth for associations, suppliers, etc.
We can continue to muddle along while our industry flatlines. Or we can join together to turn things around. Which path do you choose?
| Author Information |
| Michael Hough is an industry consultant and author of "The Profitable Trade Show." He can be reached at mhough@ntplx.net. |
