The Value of Conventions and Exhibitions

Michael Hughes -- Tradeshow Week, 6/19/2006

Tradeshow Week Research is often asked to provide an overview of the value of conventions and exhibitions that users can plug into reports, financial filings, marketing documents and RFPs. Interestingly, this industry, which plays such an important role in all other industries, constantly has to explain and sell itself to municipalities, investors, exhibitors and other groups.

The introductions to the TSW Data Book and TSW 200 directories provide excellent annual overviews. Following is another compendium of information and trends that speaks to the history and value of the industry.

The exhibition industry grew rapidly in the last quarter of the 20th century to become one of the most important marketing and educational mediums in the global economy. This is because exhibitions provide unique face-to-face interaction between buyers and sellers, experts and learners, and among industry peers. We estimate that there are approximately 15,000 conventions with exhibits and exhibitions held annually worldwide.

Rapid industry growth has been fueled primarily by two factors. First, corporations realized the value and efficiency of exhibiting. Second, attendance boomed as continuing professional education became a career necessity.

Today, business-to-business exhibitions are an established part of most corporate marketing programs. According to our survey of corporate exhibitors, event marketing budgets account for an average of 25 to 30 percent of companies' total corporate B-to-B marketing budgets. We estimate that North American corporations spend $20 billion on their annual exhibition and event marketing programs.

Exhibitions trace their roots back to ancient marketplaces, but often cited as the first modern example is the Great Exhibition held at London's Crystal Palace in 1851. Prince Albert, the husband of Queen Victoria, organized the Great Exhibition to display the economic and military power of Great Britain.

In North America, not-for-profit associations ran most early conventions and exhibitions. Some of the longest-running events still held today include the American Psychiatric Assn. Annual Meeting & Exhibits, first held in 1844, and the American Pharmacists Assn. Annual Meeting & Exposition, held for the first time in 1852.

Associations still play an important role in the industry today. Close to 60 percent of conventions and exhibitions are owned by associations. The remainder are owned and managed by for-profit media companies and independent show producers.

In the 1970s, for-profit media companies began launching tradeshows to coincide with their trade publications. They became more active through the 1990s, with the leading companies also expanding through mergers and acquisitions — and they continue to consolidate the industry today.

Going forward, we expect leading shows and Web sites to have closer relationships. Just look at the success of eBay Live! as an example.

The core value of exhibitions is their efficiency as marketplaces for buyers and sellers. Attendees find value in meeting with a number of suppliers and vendors in one place, and comparing the products, services and staff among booths. Attendees also take advantage of educational and networking opportunities.

Exhibiting companies, meanwhile, can meet with hundreds or even thousands of clients and prospects and display their goods and services in the span of just a few days. Compared with other marketing mediums, exhibitions are a cost-effective way to provide continuing corporate education and training.

Public officials are attracted to the economic boon that meetings, conventions and exhibitions can be for their regions. According to the Destination Marketing Assn. Intl., the average delegate generates a local economic impact of $1,449 per event visit. No other industry drives this level of visitor spending, dollars imported from elsewhere and spent locally. Attendees and visitors also pay for convention centers and other infrastructure investments through hotel and other tourist-based taxes.

While figures in venue feasibility and economic impact studies can seem abstract at times, they have a very real impact on a community's citizens. The convention and hospitality industry is the lifeblood of many working families across the country — and throughout the world.

The events of Sept. 11, 2001, coupled with the global downturn following the strong economy in the late 1990s, had a sharp impact on the business events industry. In the quarter immediately following Sept. 11, dozens of exhibitions were postponed, and attendance dropped by 20 percent compared with attendance in the last quarter of 2000.

Since early 2002 the industry has been rebounding steadily. After years of business travel declines and corporate marketing cuts, event producers are launching new shows. We expect the number of exhibitions with at least 5,000 net square feet of exhibit space to reach 5,000 in 2006, an increase of 2.3 percent over 2005. We estimate that total attendance at exhibitions held in the United States and Canada in 2006 will reach 65 million. The industry also has a significant presence around the world, with growth in the number of exhibitions expected to continue in Asia, Eastern Europe and Latin America for many years.

Going forward, two important issues impacting exhibitions are, first, how they will compete with other marketing mediums and, second, how buyer commitments will affect the level of high-quality attendance. For exhibition producers, attendance is key.

In fact, a recent TSW survey of show producers found that 80 percent have changed the way they promote the value of their events to attendees since 2002. The areas they have increased focus on are educational opportunities, networking events, the business value of attending and new products to be seen at shows. In short, exhibition producers are emphasizing the value of the experience for attendees and exhibitors.

A main reason conventions and exhibitions have been so resilient as a marketing and educational medium for over 150 years is that they are renewed every year, enabling producers to react to industry shifts and turn challenges into opportunities.