Apple's recent announcement that it will no longer exhibit at Macworld is perhaps the most dramatic example, but major industry players and anchor exhibitors recently have been canceling or reducing their participation in trade shows. It's happening across multiple industries with notable frequency. The past year alone has seen a North American International Auto Show without Nissan, Suzuki or Porsche as exhibitors; an E3 Media and Business Summit without Activision; an International Consumer Electronics Show without Philips, and reduced participation from Cisco Systems, Logitech and Yahoo; and a National Association of Broadcasters Show without Apple or Avid Technology. Sometimes major exhibitors return in subsequent years, but the trend has the industry unsettled.
The reasons for dropping out generally sound the same: "Trade shows have become a very minor part of how Apple reaches its customers," read Apple's statement about leaving Macworld, which is produced by Framingham, Mass.-based IDG World Expo.
"It is really precarious out there," says Dan Hoffend, vice president of corporate sales for Freeman, the Dallas-based events and exhibit solutions company. Marketers still view trade shows as potentially important, he notes, but only if the shows attract the exact buyers or consumer demographic the companies want to reach, and only if the companies get sufficient value for the money they spend. Otherwise, especially in today's economy, they're quick to pull the plug.
Show organizers say they're getting more cancellations or downgrading inquiries now than in recent memory. How should they proceed when major exhibitors vanish? Or, more to the point, how can they prevent exhibitors from leaving in the first place? Organizers say it's a tall but not impossible task, requiring flexibility, better customer service and a willingness to abandon stale policies of the past.
Surfaces, the largest residential-flooring trade show in the country, produced by Irving, Texas-based Hanley Wood Exhibitions, was coming off a record show in 2003 by every measure: attendance (40,000), number of exhibitors (925), net square feet of exhibit space (535,000) and revenue ($11 million).
Then, in a 10-day period leading up to the space draw for Surfaces 2004, five of the show's biggest exhibitors -- including two companies that controlled roughly 80 percent of the market share for roll carpet -- decided to pull out. When word spread, more exhibitors backed off. Within a month, seven of the show's top 10 exhibitors had left, and more than 50 other small exhibitors bailed, too -- companies that previously had accounted for a combined 105,000 square feet of exhibit space, or 20 percent of the show. Not only did the exhibitors drop out; some issued press releases to announce to the industry that they were leaving and launching their own rival, regional trade shows.
Galen Poss, president of Hanley Wood Exhibitions, calls the subsequent months leading up to Surfaces 2004 "the most frightening, challenging, longest and most rewarding" of his career. (He recounted the experience last summer at the Exhibition & Convention Executives Forum in Washington, D.C. A video of his hour-long talk can be viewed at pinnaclepodcasts.com/ecef.) "We came to the realization that we could lose the show if we didn't act smartly, quickly and correctly," he recalls.
The big exhibitors who abandoned the show viewed Surfaces as a threat, Poss explains. They were so dominant within the industry that they weren't attracting much new business on the show floor, and there was a great chance their customers would discover products from rival exhibitors. If the companies set up their own regional shows, they could control the environment better.
Step one for Poss was to get over the initial sting and suppress the desire to sue the exhibitors for collusion. Poss and his staff, led by show director Michelle Troop, didn't want to burn any bridges, either, in hopes the exhibitors would return someday.
Poss reasoned that buyers didn't come to trade shows primarily to meet with a handful of industry heavyweights. "They see them all the time," Poss notes. So he set out to bombard the marketplace with positive messages about the show's surviving attributes and reminders that trade shows are fundamentally about the opportunity to connect with people face-to-face and discover a variety of products and solutions from hundreds of companies. And, ideally, Poss wanted others to spread the word for him, knowing the messages would have more credibility coming from industry consultants, associations and trade publications than from Hanley Wood.
The Surfaces team launched an aggressive -- and expensive -- ad campaign that alternately glamorized the show and made a no-nonsense business case that Surfaces was a "must-attend" event. In addition:
• They created marketing materials that were easy for registrants to forward to friends and for exhibitors to forward to clients.
• The attendee promotional campaign was launched earlier, with accelerated deadlines, so that they could claim that by Aug. 1, registration was 20 percent ahead of where it had been the previous year. (Forget the fact that the campaign hadn't started that early the year before.)
• They created new features on the show floor: pavilions, contests, demos and forums on controversial topics.
• They booked a home improvement TV celebrity to donate services to a lucky attendee, and splurged to bring in a big-name rock group to perform at a nighttime event.
• The number of telemarketers was doubled to pull in more attendees.
• A loyalty club program was introduced for longtime exhibitors.
• They held meetings with VIPs to ask how the show could best meet their needs, and even offered to open the show early and late for private sales meetings.
• Every possible ally was courted, e.g., associations, customers, media.
Poss knew that not every new effort would appeal to all attendees, but the moves were "something else to talk about" other than that the industry's most powerful companies weren't going to be at the show.
Surfaces 2004 was a surprising success. In the end, revenue was down just 2 percent compared with Surfaces 2003; the number of exhibitors held steady at 925; attendance was down 10 percent, and net square footage declined by 14 percent.
But then the show started to grow again. In 2005, Surfaces set new records for revenue ($13 million) and number of exhibitors (1,054). In 2006, the show sold out the exhibit space in its hall, at more than 514,000 square feet. In fact, from 2004 to 2006, Surfaces was one of the fastest-growing trade shows in the country. And, eventually, some of the anchor exhibitors returned to the show, either as a corporate entity or as the owner of a subsidiary that had booth space on the floor.
Poss acknowledges that factors outside of his control -- namely, a temporarily booming construction industry -- contributed to his rebound success, which has given him a new appreciation for the fragility of trade shows. "We like to think the thing we have here is bulletproof," he says. "It's not."