Statistical Report: Show Business Grows

If the reported numbers for the German tradeshow business in 2008 hold true, the industry is poised for its second year in what could be a growth streak.

A statistical report recently released by AUMA (the Assn. of the German Trade Fair Industry), paints a positive outlook for international shows in Germany this year, with the size of exhibitions setting records and attendance remaining steady. That follows growth in 2007, whose results were better than in 2006 – in fact, the best since the 2000 economic boom.

AUMA attributes the strong performance of Germany’s tradeshow business to continuing demand for investment goods and optimistic forecasts for the retail trade. According to figures reported to the association, German tradeshow companies in 2008 will organize 156 international exhibitions in Germany, up from 141 in 2007.

The number of exhibitors and amount of exhibit space at these events, similar to last year, will increase again by 2 to 3 percent. Organizers expect a record 178,000 exhibitors to rent more than 6.9 million square meters (74.2 million square feet) of exhibit space in 2008, topping the previous record of 174,000 set in 2000. In 2007, AUMA recorded a total of 164,000 exhibitors filling more than 6.6 million sq. m. (71 million sq. ft.) of exhibit space and attracting 10.4 million attendees.

The number of 2008 visitors is expected to remain relatively flat, at 10.3 million.

Furthering optimism for 2008, AUMA found that foreign importers and exporters interested in tapping the European market continue to rely heavily on tradeshows in Germany because they offer the highest level of internationality among exhibitors and visitors.

International tradeshows in Germany had a big year in 2007 any way you measure them, fueling more hope for the next two years. That’s why, according to AUMA, German exhibitors intend to increase their tradeshow investments for 2008 and 2009 by 6 percent.

Thomas H. Hagen, AUMA chairman, gave the forecast at an AUMA press conference held in Duesseldorf in November.

A breakdown of the statistics indicates that the number of exhibitors in 2007 increased by around 3 percent, compared with 2006, following an increase of only 1.3 percent the previous year. Hagen said that growth was being generated from outside Germany, indicating that German tradeshows offer solid platforms for the important sales markets of Germany and Europe.

Exhibit space also increased 3 percent, compared with 2006, when it grew 0.7 percent. Hagen pointed out that companies need adequate booth space, not only for exhibiting, but also for customer service. If exhibitors want to create an atmosphere for holding discussions and closing business transactions, not just distributing brochures, they need the appropriate setting.

AUMA’s study also indicated there were 2.5 percent more visitors in 2007 than in 2006. As for specific economic and industrial sectors, investment goods tradeshows did well but engineering shows were the best. Exhibitions in the renewable energies sector, Hagen added, from wind power to solar energy, also had strong exhibitor and visitor increases.

According to Hagen, tradeshows are not threatened by the virtual world. Platforms such as Second Life are not relevant to shows, especially in the business-to-business sector, because tradeshows are, after all, “real life,” he said.

In addition to its survey of shows, AUMA gave the results from its annual survey of 500 German exhibitors, conducted by TNS Emnid. According to AUMA MesseTrend, as the study is called, exhibitors are confident - so much so that within the next two years, they plan to spend 6 percent more on tradeshow participation than they did in 2006 and 2007. Of the exhibitors surveyed, 38 percent said they wanted to spend more money (14 percent said less). Larger companies, in particular, reported increased investment in tradeshows.

Hagen said exhibitors in the investment industry were planning particularly high tradeshow expenditures: 46 percent from this sector said they would spend more, and only 13 percent less. Of consumer goods exhibitors, 30 percent are planning higher tradeshow spending, and more than half plan to maintain a consistent level of spending.

According to MesseTrend, the average tradeshow exhibitor’s budget in 2008 and 2009 will be $399,000 ($590,000). Companies plan to organize an average of 10 events, six in Germany and four abroad, which is the same number as in 2006 and 2007.

Furthermore, it appears exhibitors won’t shift their participation from German exhibitions to those abroad. Hagen said this is because they’re well aware of what they have at German shows: a moderate cost to participate, high quality of shows and many international visitors at the decision-making level.

The data supports this analysis. Eighty-two percent of MesseTrend respondents rated tradeshows as important or very important in their marketing communication mix, compared with 79 percent in 2006. Sales forces lost 1 percentage point and now are behind tradeshows with 77 percent, followed by direct mail and advertising in trade journals. Events, on the other hand, have apparently lost some of their appeal: Only 39 percent of those surveyed regarded them as important, down from 42 percent last year.

As one reason for the success of tradeshows, AUMA’s managing director, Dr. Peter Neven, pointed to the German government’s promotional program for them, launched in June 2007. The program aims to introduce young, innovative companies to export markets. For 2008, the Ministry of Economics selected 48 shows. It will continue the program in 2009.

Neven said he hoped the success of the companies involved would motivate other newcomers to use large, industry-specific platforms at an early stage, because marketing new products in a niche can take a long time – maybe too long for a company’s survival.

AUMA also reported it has increased its research activities. One study, just completed by the Leipzig Graduate School of Management, developed three scenarios imagining how the trade fair industry might look in 2020.

In addition, AUMA has commissioned a study of the role of decision-makers at tradeshows and vice versa.