The Big Issues

It's clear there are many challenges facing the global economy. How are these challenges impacting conventions and exhibitions? What are the biggest issues of concern, and what can be done?

Tradeshow Week Research is studying these questions from a number of perspectives, and here's what we've uncovered.

The big issue for show management is the reality that many companies are making across-the-board cuts in spending, investment, marketing, travel and staffing. Event marketing is not immune from these cuts. If there's good news in this, it's that every industry and marketing sector is in the same situation, and that most cutbacks impacting events are a result of the recession and do not reflect a change in how companies view conventions and exhibitions.

Still, this means that the show manager's job will be harder, requiring more time and effort to communicate and negotiate with exhibitors, and to creatively add more value. It also means spending more time explaining the economic environment and show performance tracking with management, boards, customers, the press and other stakeholders. On the attendee side, more promotion will have to be done.

Exhibitors are facing smaller budgets and are foregoing secondary events. A recent TSW Research survey of exhibitors with 20'x20' booths or larger found the number of conventions and tradeshows exhibitors will participate in will decrease from an average of 42 in 2008 to 33 in 2009.

It sounds counterintuitive, but the retrenchment in the number of shows, the drastic cutbacks in corporate meeting spending and lower attendance has some positive elements. Exhibit managers were arguably managing too many shows and too many other tasks. Now they can better focus on their most important shows and likely yield better results. Similar to the last recession, large exhibitors are telling TSW that, while attendance is down, they are seeing “high-quality decision makers” with “more authority to purchase.”

In past downturns, the worst year for exhibitions was the one after the official end of the recession. This was due to the lagging nature of exhibitor spending, but I think this time that lag will be shorter, because companies are hoarding today and will make cuts faster. That should mean a quicker recovery.

The service provider and vendor side of the industry is diverse and includes exhibit builders, registration companies, convention and visitors bureaus and many other categories. Each sector will be impacted this year.

A risk for service providers may be a trend in which companies go back to basics and try to be unostentatious in their marketing and spending. Will exhibitors change their “flashy” booths and branding to more basic styles? Will companies delay product launches or get aggressive and try to win market share this year?

Venues and hotels are feeling the downturn in corporate events, which should open up dates and negotiating opportunities for conventions and tradeshows. It may also be hard for convention center and hotel development projects to get funded this year.

Attendees often are in mid-level and senior management roles or hold technical or professional positions. In certain industries, like retail, they are buyers and procurement managers. Layoffs at major corporations and travel budget cuts are the main problems impacting attendance levels today.

However, in challenging times executives, managers and professionals need to stay connected more than ever. Hotel rates, which boomed until about a year ago, should be attractive. Expect to see a move back to attendance marketing messages that primarily focus on the business value of attendance and education and away from promoting the location or broad, general themes. We saw this change following the last recession.

There's a fear that once companies cut back on events, they may think they don't need them when the economy rebounds. Will this period realign how marketing budgets are spent? Will it transform the conventions and exhibitions industry? I don't think so.

Today's biggest issue is a global financial and confidence crisis, not a questioning of the value of event marketing. The core convention and exhibition industry business model and industry structure will emerge intact.

But the long-term industry questions remain: Will the growth of digital media and the Internet impact exhibitions? And how will future generations use events and face-to-face marketing?