Exhibit at E³? Forget About It

It doesn't happen all that often, but about a month ago Tradeshow Week editors were truly caught flat-footed when they learned that E³/Electronic Entertainment Expo was going out of business — at least as we knew it.

I say it doesn't happen often, because even with the most unusual breaking news story, the chances are good that one of us has heard something from sources days, or even weeks, in advance of the moment when we can actually confirm it's true. At any given time, we've all got as many as a dozen potential stories drifting around waiting for somebody somewhere to put them all together.

Plus, all of this happened overnight in practically our own back yard. Most of us live and work in Los Angeles. Year in and year out, E³ has been the biggest tradeshow in town; we've all been there multiple times. If you were on the showfloor as recently as last May, it would have been hard to see that there was any trouble brewing.

That's partly what makes it such an interesting story — how quickly it happened and the swiftness with which its impact will be felt. Even when we do write about show managers making quick changes, it's in tradeshow time, meaning somewhere around 2010. Not that often does somebody say, "You know that 550,000 square foot show that we expected 70,000 attendees for in just nine months? Forget about it."

The day of the announcement, reporters from the mainstream media were calling us (mostly because so little real information was available from those involved) trying to get us to say, "Yes, that's right. The tradeshow industry is dead," or "Yes, this is exactly like COMDEX."

Neither of which is true — I think — leading to the question, what is the real inside story here?

Ostensibly, a handful of giant exhibitors (Electronic Arts, Sony, Nintendo and Microsoft come to mind), who also happen to be Entertainment Software Assn. board members, said they were not getting what they wanted out of the show and, since they were in charge anyway, "Forget about it."

While only a couple of these companies ever actually said that to anybody in the media, most went to great lengths to make sure we didn't get the impression they were denying it either.

The average successful tradeshow professional would wonder how a show manager could let so many important customers get so unhappy and not have done anything about it before this.

ESA President Douglas Lowenstein said the industry is maturing to the point where an event like E³ is no longer necessary — which must have come as a surprise to the 400 or so exhibiting companies who are not association board members with monster marketing budgets and who are now being wooed by the Consumer Electronics Assn. — which couldn't get a press release out fast enough explaining it hoped to launch a duplicate show, or at least a pavilion at Intl. CES.

Henceforward, Lowenstein said, what's left of E³ will be a meetings spread out around a few Los Angeles hotels to which many fewer buyers will be invited. That does sound like what many show managers have really been saying when they try to put lipstick on the pig of their declining attendance figures: Less is more. Even if we have fewer attendees, as long as they're qualified and keep our exhibitors happy, who cares?

But why the abrupt announcement? And is there a lesson to be learned here?

Perhaps only this: In May, what has ended up being the last E³ sold 556,000 net sq. ft. of exhibit space at about $23 per sq. ft., for a ballpark total of $12.8 million. Who among your tradeshow-managing peers and colleagues would walk away from that?

But the board of the ESA — made up of the show's biggest customers, who among themselves probably spent that much on exhibit design, marketing, drayage, etc., before they even got to buying space on the showfloor — did.

Could this be the most extreme case imaginable of exhibiting costs getting out of hand, and exhibitors taking drastic measures to staunch the bleeding?