Adaptation

At McCormick Place in Chicago,
Stephen Schuldenfrei, president of the
Trade Show Exhibitors Association,
monitors how the industry copes with
tight budgets and new technology.

Trade shows are back. Last year, for the first time, all of the core metrics for the industry -- net square footage, numbers of exhibitors and attendees, and revenue -- emerged from their post-9/11 tailspin to exceed marks set in the year 2000, according to the 2006 CEIR Index, the census conducted by the Dallas-based Center for Exhibition Industry Research, which catalogs approximately 10,000 exhibitions. Between 2004 and 2005, trade show revenue jumped to $10.3 billion, a 9.1 percent increase, and net square feet of exhibit space rose 8.5 percent, to 500 million. American Business Media, the New York City-based association of business media companies and a CEIR partner, reported that trade show revenue edged higher during the first quarter of 2006, up 1.4 percent compared with 2005 numbers. A New York City-based private equity investor, Veronis Suhler Stevenson, released a report this summer that predicts trade show spending will grow at an annually compounded rate of 5.8 percent through 2010.

Across the country, the future for trade shows looks bright. Las Vegas is going gangbusters. Tom Ackert, executive director of the Orange County Convention Center in Orlando, reports an atmosphere of “bullish optimism.” Convention center officials in Chicago and San Francisco expect 2006 to be among the best years for their trade show business. The Massachusetts Convention Center Authority in Boston booked a record number of future conventions last year.

“Overall, as a whole, the forecast is good,” says John Stuttard, vice president of international brand development, Interphex brands, for U.K.-based Reed Exhibitions.

But the reality is that not everyone is thriving, and growth is to be expected following a period of steep decline. Today, the dynamics of the industry are being altered by communications technology, aggressive expansion of exhibition facilities, and increased competition for buyers’ and sellers’ time and money. While the overall industry continues to grow, trade show organizers still are grappling with how to cut through the cluttered airwaves and fiber-optic cables to reach BlackBerry-wielding attendees and prove to exhibitors that a show-floor booth is worth their investment.

Yes, trade shows are back. But exactly what purpose do trade shows serve in the current business environment? And how will these events, which insiders consider the last bastion of face-to-face interaction, keep up with the high-tech times? Experts dispute which trends are most salient but agree that the industry is reinventing itself under their watchful eyes.

The move to add value

“For me, the challenges are the same. The degree of difficulty is what’s changing,” says Marc Rosenstock, left, president and CEO of ROC Exhibitions, a Lisle, Ill.-based trade show management company.

The traditional task of attracting the right number and type of attendees and exhibitors is more daunting than it used to be, some trade show organizers contend, especially because companies are more disciplined about how they spend marketing dollars, and because travel and accommodation costs in major trade show markets have increased. Gone are the days when a company exhibited at, or sent its employees to, a show “just because it was happening,” says David Korse, below, who was set to resign as president and CEO of IDG World Expo, the Framingham, Mass.-based producer of technology-focused trade shows, on Nov. 3. Instead, Korse says, “Exhibitors are paying much more attention to the ROI [return on investment] of their time, resources and money.”

In the vast trade show industry, executives are hesitant to call anything an industrywide trend, but if such a thing exists, it’s organizers working harder to add value to trade shows away from the show floor and education breakouts.

According to Jack Withiam Jr., executive vice president and general counsel for White Plains, N.Y.-based George Little Management, a major challenge facing organizers is “how to extend the life of a show beyond the three, four or five days of the event,” so that the show begins to function as a “portal” for business conducted throughout the year.

Networking and matchmaking software set up for trade show attendees and exhibitors, including products such as BDMetrics or Leverage Software, now can bring buyers and sellers together long before and after the booths are set up and dismantled, says David Weil, senior director of convention and trade show services for Chicago-based SmithBucklin Corp. The goal is to make time spent on the trade show floor more efficient and turn the show into a catalyst for business that can continue to return value over a long period of time.

Feedback surveys indicate the increasing value of networking opportunities separate from the show floor and education sessions, Weil adds, which prompted SmithBucklin to carve out more networking niches at exhibition facilities with food and beverage options and comfortable furniture, creating what Weil calls “that Starbucks feeling.”

Howard Britt, president of Winter Springs, Fla.-based Premiere Show Group, added VIP rooms for some of his largest exhibitors at Premiere Orlando, a trade show for the beauty industry, which was held in August. Here, exhibitors set up meetings with attendees to conduct business away from the bustle of the trade show. “They have a tendency to write as many orders in the VIP room as they do on the trade show floor,” Britt notes.

A shift in purpose

Trade shows traditionally have been vehicles for spotlighting new products and companies, but the advances in networking software, the addition of spaces for buyers and sellers to interact, and the changing behavior of attendees have combined to make such shows the place for more focused inquiries and finalizing business deals.

According to research conducted by Red Bank, N.J.-based Exhibit Surveys Inc., based on nearly 100 shows the company monitors, the average time attendees spent on the trade show floor fell to 7.8 hours in 2005, down from 8.6 hours in 2004 and the largest drop the company has recorded since 1990. Ian Sequeira, vice president of Exhibit Surveys, says the decrease is partially due to the fact that attendees are spending some of that time in educational sessions, but also because they are arriving at the show further along in the business process than previously. Attendees simply “don’t need to spend as much time wandering the trade show floor,” Sequeira says.

Those trends haven’t cut down on the number of deals being struck, however. “There’s more business being conducted on the show floor. People are not just fact-finding,” says Brad Weaber, right, executive vice president and chief customer officer for Frederick, Md.-based Experient (formerly Conferon Global Services).

In fact, trade shows that use hosted-buyer programs require attendees to schedule advance appointments with sellers. At this year’s IMEX, the incentive travel and meetings show in Frankfurt, Germany, hosted buyers and exhibitors scheduled approximately 20,000 show-floor appointments via the show’s website, says chairman Ray Bloom. “With the technology, it’s a straightforward and effective way to improve communication between buyer and seller and increase opportunities to conduct business,” he explains.

Paul Kennedy, MBE, group exhibitions director of U.K.-based Reed Travel Exhibitions’ Meetings and Incentive Events, believes events with hosted-buyer programs “have a competitive edge. Our events held in the Middle East, China and Australia all follow the hotel buyer pre-scheduled appointment model. All of our events in this sector are growing.”

While the practice is more common in Europe or Asia than it is in North America, Steven Hacker, left, president of the Dallas-based International Association for Exhibition Management, says, “it is a definite trend that reflects higher value many are placing on ROI.”

Even in North America, whether they have appointments or not, more attendees know what they’re looking for, whom they want to meet and what questions they want answered than they did five years ago, explains Stephen Schuldenfrei, president of the Chicago-based Trade Show Exhibitors Association. “They know they’re coming to see 20 or 30 people. That’s definitely a trend we like.”

But Sequeira sees that trend as potentially alarming. He says exhibitors actually are spending less face-to-face time with attendees. In 2003, Sequeira measured the “staff interaction rating” at 60 percent, meaning that, on average, exhibitors had engaging interactions with 60 percent of those exposed to the exhibit. In 2005, that number slid to 51 percent. “That, for us, is a big problem,” Sequeira says, “because that is the number-one advantage of the trade show medium.”

No one is predicting a gloomy future for trade shows. (Regarding virtual trade shows, Hacker says, “It may come to be one of the great ideas that never really blossomed into a meaningful experience.”) But if buyers and sellers increasingly know whom they want to meet and what information they need to get without first wandering the exhibit floor, trade shows of the future will need to reflect the shifting needs of attendees and exhibitors. Face time is still important, but it’s increasingly valued at a later stage in the business process.

The difficulty for show organizers is that the traditional purpose of trade shows continues to have value. Smaller manufacturers, or larger retailers seeking products from smaller suppliers, still use trade shows as they always have, says Brian Tully, senior vice president of conventions for the Washington, D.C.-based Food Marketing Institute. Indeed, satisfying traditional needs as well as the shifting requirements of participants who already know what they want is the major dilemma for show organizers.

“You want to be everything to everybody, yet deliver personalized service for small manufacturers and small retailers on up to large manufacturers and large customers,” Tully says. “And that’s extremely difficult to do.”

How to cope

Strategies for returning value to customers vary depending on what industry the show serves. Some organizers are reducing the size, number or frequency of their shows. In July, for example, Washington, D.C.-based Entertainment Software Association announced that next year its Electronic Entertainment Expo -- or E3Expo -- would transition into a “more intimate event focused on targeted, personalized meetings and activities” at hotels spread across Los Angeles but would not feature a large trade show. And the Food Marketing Institute announced earlier this year it would reduce the frequency of its trade show to every other year and organize educational conferences on off years.

Moving in the other direction, Oxford Publishing, the Oxford, Miss.-based producers of the Nightclub & Bar Convention and Trade Show, purchased and will reinvent the Nevada Restaurant Association’s Las Vegas International Restaurant Show and Hospitality Expo as two new trade shows and will co-locate all three shows in Las Vegas next year.

Each organizer is striving to create a show of maximum value. Here are some increasingly popular methods of helping attendees and exhibitors get a better return on their investment:

Co-location. For those who are organizing complementary shows alongside one another, the benefits seem obvious. Attendees can save the hassle and expense of multiple trips by attending a single show. Combined shows will draw a larger audience. Event management companies can share some of the common costs associated with the event. “A seller’s time and a buyer’s time have become equally precious,” says Hacker.

Proprietary events. David Korse of DG World Expo sees companies spending an increasing percentage of marketing budgets on proprietary events, which are held either in conjunction with a trade show for an invitation-only crowd or as a stand-alone event, which gives the company total control over the look, scale, schedule and audience. These can be as large as any trade show and can be open to the public. For example, Oracle OpenWorld, a proprietary event as well as one of San Francisco’s largest trade shows, filled all three buildings of the Moscone Center in October and required the city to close off a road between the buildings for use by pedestrians, the first time such a measure has been taken in 25 years, according to Moscone’s assistant general manager, Julie Burford.

Experts say private events and trade shows serve complementary purposes -- one rewarding customers, the other generating them -- but Simon Perutz, president of Niles, Ill.-based Nimlok, a trade show display manufacturer, says, “non-trade show events continue to grow and are an ever-greater part of the industry.”

Education. “If exhibitors get good results [at a show], it’s probably more by accident than by design,” says TSEA’s Schuldenfrei, who contends exhibitor
preparation and training often are lacking. Many insiders agree that exhibitors could produce better results at trade shows if they were better versed in the art of selling on the show floor.

“Exhibitors still need more education from people in the industry,” says Nimlok’s Perutz. “I don’t think there can ever be enough.” Nimlok itself has invested more money in web-based seminars this year than in years past. The seminars teach exhibitors not only what booth designs tend to be effective, but also how to use them.

A reminder

As trade shows evolve to keep pace with current business practices and technology, Kevin O’Keefe, vice president of the events division for Los Angeles-based Canon Communications, offers a helpful reminder: “Ultimately, all of us are in the attendance business. We’re not in the exhibiting business, even though that’s what drives the revenue. We’re in the attendance business, and organizers are going to have to do whatever it takes to make the shows more competitive to grow attendance. If we’re not providing new interest, new pavilions, new features and/or co-locations, it’s a problem for people in the industry.”