Seeking New Revenue Streams

No longer is the showfloor the only revenue generator at a tradeshow.

It wasn’t all that long ago that shows didn’t just count on exhibit space sales for a high percentage of the money made from a show, but for all of it.

While space sales still remain one of the largest revenue generators for an event, it’s been a long time since show management relied on only one revenue stream. The economic situation has caused even more show managers to ask, “Where else can I diversify?”

For many, the talk for years has veered to sponsorships and other similar venue generators. But, now, the diversification has gone many steps further to ways to make money that, in some cases, have nothing to do with the showfloor and continue throughout the year, long after the show has ended.

At The Tiny Kitchen’s three editions of The Metropolitan Cooking & Entertaining Show, held annually in Washington, D.C.; Atlanta; and West Palm Beach, Fla., exhibit sales are the least of the ways CEO Denise Medved is fighting to increase the profitability of the shows.

Because the shows serve consumers and not the business-to-business sector, Medved said she’s able to explore adding value in ways that draw in attendees by playing to their passions.

“I really try to understand the audiences and think, 'Beyond what I’m selling them currently, what would these people likely buy from me?’” she added.

She has found it isn’t only tangible goods that attendees will open their wallets for. The Metropolitan Cooking & Entertaining Shows also have partnerships with Food Network stars, including Paula Deen, her sons Jamie and Bobby Deen, Tyler Florence, Bobby Flay, Giada de Laurentiis, Guy Fieri and Pat and Gina Neely, and bringing those stars to the shows has opened up new revenue alleys, Medved said.

“This year, we really beefed up the off-showfloor side of the business,” she added. The Washington, D.C., show ran Nov. 7-8 at the Walter E. Washington Convention Center.

Some of that business was seminars with the famous chefs:

• a barbecue lunch with the Neelys
• family supper with Jamie and Bobby Deen
• a food and wine pairing with Tyler Florence
• book signings with the Food Network stars

Medved also had another food and wine pairing seminar with a Washington, D.C., restaurant and several cocktail sessions with mixologists.

“All of those require a separate ticket,” she added.

Plus, it isn’t just the ticket sales before and during the show that make up the new revenue streams at The Metropolitan Cooking & Entertaining Shows.

Medved said attendees are able to purchase tickets to book signings with the Food Network stars – but they also are able to buy presigned books in the show’s bookstore and, through the year, on the Web site. In addition, this was the first year gift certificates were sold at the Washington, D.C., show, which Medved said can be redeemed for tickets to events at a future show.

Some features Medved is testing out to add revenue to The Tiny Kitchen’s coffers aren’t show related: During the first quarter of next year, she’s planning to do a tele-seminar to address how to write a cookbook, a feat she accomplished twice with “The Tiny Kitchen Cooking and Entertaining” and “The Bachelor’s Tiny Cooking” before launching the show.

“It has nothing to do with our show, but it has everything to do with the passion of our audience,” Medved said. She anticipates a 75- to 85-percent profit margin from the seminar.

But it isn’t just new events with more ticket sales that Medved’s turning to in order to increase revenue. She also is pursuing corporate sponsorships. This year, Microsoft used the Washington, D.C., show as a customer appreciation day by purchasing a VIP package for 35 customers, which included a meet-and-greet with Paula Deen and tickets to other events at the show.

“If this works out well ... there’s a gajillion companies where we can go and sell the same type of corporate sponsorships to,” Medved said.

Even with diversification happening, booth space sales remain a large revenue generator for many shows.

That’s the case for the shows in Nielsen Business Media’s Retail Group, said David Loechner, senior vice president. The objective when thinking of new ways to generate additional revenue for shows in the group – such as Outdoor Retailer Summer and Winter Markets, Interbike Intl. Bicycle Expo, FlyFishing Retailer World Trade Expo, Action Sports Retailer Trade Expo, ASD East and ASD Las Vegas – is to find ways to enhance the showfloor experience for exhibitors and attendees.

“We have hundreds of different sponsorship opportunities,” he added. “... Our tagline was 'Think beyond the booth.’”

But it’s not just physical aspects that the retail group is pursuing to diversify its revenue streams.

“We have a whole suite of digital revenue streams,” Loechner said. Some of that suite includes banner advertisements on Web sites and exhibitor profiles that are set up similar to Facebook’s interface with paid opportunities surrounding it. “It’s been evolving,” he added. “... Each show, we’ve added more features to it to allow (the show’s Web site) to develop.”

One big revenue stream Loechner said he expects for next year is www.ASDSourcebook.com, an interactive directory of hundreds of thousands of products that’s membership-based and builds on the success of ASD East and Las Vegas. The Web site launched in November, and Loechner said it should generate up to $500,000 next year.

“It’s already exceeded our revenue expectations for 2009,” he added, speaking a couple of weeks after the launch.

But the idea for ASD Sourcebook was generated from trying to meet the needs of the show’s exhibitors.

“It came out of retailers trying to source ... for their inventory,” Loechner said. “The industry loves the shows and wanted to extend the shows.”

Because of the idea’s early success, the Retail Group is exploring the ability to expand similar Web sites into the other industry sectors the group’s shows cover. “We’ll be rolling it out to other markets,” Loechner said. “... I think it will be meaningful. I know it wouldn’t supersede our tradeshow opportunity.”

At the Specialty Equipment Manufacturers Assn.’s SEMA Show, show officials are pursuing new ways to generate revenue, but that doesn’t necessarily mean that they’re adding new features.

“We’ve always given our education away for free,” said Peter MacGillivray, SEMA’s vice president of events and communications. “This year, we still have some education that is free to all attendees and exhibitors, but then we have some of the tracks that we’re charging for.”

The show’s gamble paid off when it ran Nov. 3-6 in Las Vegas: For one track, there were 500 paying attendees. “Candidly, we’re a bit surprised (at) how successful that is,” he added.

SEMA also put formerly free Web content behind a pay wall.

“It’s something that’s relatively new for us, and we’re feeling good about it for a number of reasons,” MacGillivray said. The new revenue stream, first, shows SEMA’s members the value of membership, and, second, shows nonmembers that there is a value, he added.

The show also had some additional sponsorship options that were put in place before the downturn started that were a blessing in disguise.

“They were formed at a time when our show was sold out,” MacGillivray said. “... We couldn’t sell (exhibitors) any more booth space.”

That action created more revenue for the show in a time when it had nowhere to grow, he added. “I’m thankful that we did the work that we did when times were good,” MacGillivray said. “I feel like we’ve got some immediate solutions.”

All three had a piece of general advice for show managers: Don’t stop trying to diversify.

“We will always be coming up with new revenue streams,” Medved said.

But, she advised show managers not to get too tied to ideas. “We’re not afraid to scrap the underperforming initiatives,” she added.