The View From the Top

Even amid downright terrible economic news, the nation's largest tradeshows still have been able to grow their gross revenues so far this year. However, the growth has been a modest 1 percent, according to a recent survey of Tradeshow Week 200 show managers.

In July, TSW Research queried TSW 200 show producers on a range of strategic issues. Forty shows responded to the survey for a 20-percent response rate.

One important question asked of show managers was whether the exhibition industry was a lagging indicator. In other words, was it likely to be some time before the industry felt the impact of a downturn in the larger economy?

Sixty-three percent said yes, while 32 percent said no.

Interestingly, the TSW 200 show managers who responded to the survey whose shows had yet to be held in 2008 were more bullish, forecasting 3-percent top-line growth.

There are two clues to whether the tradeshow industry is slowing down:

• Growth in net square footage increases faster than attendance growth.
• Marginal new shows start to be canceled or postponed.

According to the Tradeshow Week Quarterly Report for the first quarter of this year, net square footage expanded by half of a percent, while attendance dropped by 1.2 percent.

Each industry is different, but the first signs of a recovery usually are seen on the attendee side, when attendance growth is greater than net square footage expansion.

The survey also uncovered some of the issues that show managers of the largest U.S. events feel are very important. At the top of the list is “adding elements and changes to keep the show fresh and exciting,” selected by 95 percent of the survey respondents.

In an experience economy, where “been there, done that” has become a mantra, show producers are challenged to keep topping themselves every year.

There are other key issues for show managers, in order of importance:

• attendance promotion (in particular, attracting new attendees and buyers), selected by 90 percent of the respondents
• adding value for leading exhibitors, 63 percent
• increasing sponsorship opportunities and sales, 56 percent
• capturing more data on various aspects of the audience and exhibitor base, 56 percent

There has been a shift this decade from exhibitor-related issues being the top concern to a more urgent focus on enhancing the attendance experience and attendee marketing.

Still, exhibitors represent about 75 percent of the typical tradeshow's total gross revenue, and show managers said the key to generating the most revenue growth during the next two years will be “increased exhibit space revenue” and “sponsor revenue,” both selected by 60 percent of the survey respondents. No other revenue stream even comes close.

The next highest ranked revenue stream is “increased attendance conference revenue,” chosen by 28 percent as a key area for additional revenue. The survey asked how attendees are changing and how show management has responded to those changes. Show managers said attendees are more pressed for time, more discriminating, more focused and better prepared. Attendees are not staying at shows as long as they once did and require more in-depth, high-level education.

One show producer said, “(Attendees) need to see value. The event has to be very productive for an attendee.”

Another said, “Attendees are so busy, they want us to point them to the new developments in the industry and help them understand what they should focus on at the convention.”

To follow that up, TSW Research asked the show managers what they were doing to respond to the change in attendee attitudes.

Here are the answers we heard most often:

• provide more education and content, networking opportunities and value, and;
• add tools to help attendees be more efficient, offering incentive programs and discounts.

Show managers were asked similar questions about exhibitor trends. One survey respondent put it succinctly: “(Exhibitors) are demanding more.”

The main changes have been a continued focus on budgets and cost justification, tracking ROI, a need for more value and the challenge of mergers and acquisitions reducing the client pool. Some exhibitors are becoming more selective about what shows they participate in. Even then, they are waiting longer to make their decisions and sign contracts.

One show manager said, “(Exhibitors) are much more closely examining the events in which they exhibit to properly align their marketing goals with meetings that give them more ROI and ROO.”

The good news is that event marketing is generally healthy. The challenge is that attendees and exhibitors are changing faster than ever before, the economic outlook is cloudy and the impact of the Internet on all business and marketing is still in the early stages.

There are essentially two schools of thought on show management growth. The more common and wide-ranging strategy is to be acquisitive in terms of new launches, enter new or related markets, get more exhibitors and attendees to participate, collocate shows and, well, make more acquisitions. Part of this strategy also includes raising prices.

The second model focuses on working more closely with exhibitors and attendees to help them more successfully “make a market.” This model includes providing exhibitor training, enhanced lead management, more customized services and using the Web to extend the value of shows – in short, taking more of a partnership approach than “selling more exhibit space.” These are not mutually exclusive strategies. Both will be necessary if the TSW 200 is to continue its run of nearly consistent growth over the past three decades broken only by the post-Sept. 11 period.

Michael Hughes is associate publisher and director of research services for Tradeshow Week. He can be reached at mhughes@reedbusiness.com.