How is your show doing? It’s a common question among the organizers of exhibitions. But it is an especially important question for those who produce association-sponsored events. Because exhibitions can represent such a substantial contribution to the total revenue of many associations—in many cases more than half the annual gross revenue—the answer can be critical to an association’s financial stability. It’s no less important for independent show organizers, whose owners or stockholders expect and demand favorable financial results. So how do you answer that question meaningfully and with specificity? Actually, it has become very simple: You just compare your results to the industry results compiled and reported each quarter, and then annually, by the Center for Exhibition Industry Research.
CEIR has been around for more than three decades, formerly known as the Trade Show Bureau, and it has been gathering data from many events for almost 20 years. What makes the CEIR Index such an effective and important diagnostic, and now a predictive tool, is that trade show results are reported across 14 key industry sectors: professional business services; consumer goods and retail; discretionary consumer services; education; food; financial, legal and real estate; government; building, construction, home and repair; industrial/heavy machinery and finished business outputs; communications and information technology; medical and health care; raw materials and science; sporting goods, travel and amusement; and transportation.
The Benefits of Comparison. No matter the nature of the event(s) you produce, you will find aggregated data reflecting the results of other events that take place in the same industry space as yours. This is enormously helpful for learning whether your event is outperforming or underperforming similar events, invaluable information that can be relayed to senior management, boards, members and stockholders. It can also help organizers whose shows may be lagging behind to know just how much their performance needs to be improved to meet industry averages.
Many savvy exhibition organizers are now using CEIR Index graphs that are relevant to their business sector and overlaying them with the results of their show(s). The four key metrics that the CEIR Index measures include: net square feet of space sold, professional attendance, gross revenue and the number of exhibiting companies. In addition to these four vital measurements, CEIR combines all four metrics into an overall average. Overlaying the results of your own show instantly creates a comparative graphic that’s very easy to understand and that reveals immediately whether your show results vary significantly from the average results of other similar events. Presenting this instead of detailed text to stakeholders may be the preferred option as they will immediately grasp the meaning of a visual graph.
The CEIR Index also provides valuable insight into any missed opportunities that need correction or big wins that deserve celebration. For example, if your event trends similarly in three out of the four reported metrics but lags seriously in gross revenue, it signals the need to carefully review the pricing structure of your revenue sources such as exhibit space sales, advertising and sponsorships.
Using the CEIR Index for comparative purposes should become a routine exercise, both quarterly and annually, to ensure that your event is among the leaders in your association’s sector. You can receive the CEIR Index data at no cost if you start reporting your show results. Frankly, there is no reason not to do so since all data is anonymous and is only used for the purpose of aggregating meaningful results by industry data. The more events that report data in each sector, the more accurate the CEIR Index becomes. Additionally, the results of any one event are never reported in any way except as part of the total results achieved by a particular industry sector.
Understanding the CEIR Index. Let’s get back to the opening question while we examine the graph below: How is your trade show doing? You can see that, for the purposes of comparison, the baseline year of the CEIR Index is 2000. All metrics reported in 2014 are measured against the baseline year (2000). Total results, for example, are reported at 105 percent and means that the industry as a whole has recovered all of its lost ground stemming from the onset of the Great Recession in 2008. Some business sectors, however, have not performed as well and a few have not regained sufficient lost ground to recover even to the baseline year of 2000. Gross revenue (the purple line) is lagging when compared to the other three metrics, indicating that the industry continues to be under pricing pressure to restore profit margins.
A quick glance at the chart immediately reveals the devastating impact of the Great Recession, when all four of the metrics lost between 15 percent and 20 percent of their value. Conversely, the data also reveals the incredible resilience of the exhibition industry, whose economic rebound began in 2010 and is forecast to continue its steep upward trajectory. To veteran industry observers it comes as no surprise that professional attendance once again serves as a harbinger of recovery, significantly surpassing the growth of the three other metrics.
It is important to note that every time the U.S. economy has slid into economic recession, the exhibition industry’s results have mirrored that erosion. Similarly, the exhibition industry also reflects economic recovery from recession. Typically, the industry’s results have either matched or exceeded the performance of the nation’s economy. This is what provides the CEIR with a basis to now issue forecasts by industry sector, representing a new and powerful set of tools for associations to create more accurate event budgets.
Looking Ahead. CEIR economist Allen Shaw, who is chief economist for Global Economic Consulting Associates Inc., believes that the next three years will be good for the economy. He forecasts that results in 2015 and the two years following should grow close to 3 percent, a significant increase over the results of the last five years, which demonstrated an average 2 percent annual growth.
Shaw also noted the impressive gains in employment over the last year, averaging 275,000 new jobs each month. This increase has powered current sales of new vehicles, housing and other goods and services. Furthermore, the recalibration of energy costs is literally adding fuel to the economy’s expansion. Most exhibition organizers do not employ staff economists who have access to the kind of insight and complex financial analytics that CEIR is producing, which is why its information is incredibly valuable.
According to Brian Casey, CEIR president and CEO, the best performing sectors in 2014 were the financial, legal and real estate sector and the building, construction, home and repair sector, which respectively grew by 5.2 percent and 5.1 percent. Alternately, the weakest exhibition sector was education, which the index showed declined by 3 percent.
Relative to all this—and to anyone interested—is the newest enhancement to the CEIR program, which is called Predict. Predict is an exhibition industry outlook conference, this year scheduled to take place September 16–17 in Chicago. It is expected to gather an impressive audience of association and independent exhibition organizers, who will meet with a group of financial analysts representing a broad spectrum of business activity. Predict, as the name implies, is dedicated to providing a forum in which informed decision makers can identify key trends and thus measure their own event forecasts more accurately. What association wouldn’t benefit from that knowledge?
Once you begin using the CEIR Index to measure your trade show’s progress, the next time someone asks, “How is your trade show doing?” I hope you’ll be able to say, “Our gross revenue is running 22 percent ahead of similar shows in our business sector. We’re doing fine, thanks!”