Divide and amp; Conquer 1-1-2001

Meetings & Conventions - January 2001 Current Issue
January 2001

Not resting: Courtney Muller’s challenge is to keep Internet World from becoming a dinosaur.

Divide & Conquer

Segmentation and spin-offs are helping major national shows compete with increasingly popular niche events

By Carla Benini

Internet World might be spawning its own staunchest competitors. The mammoth national show is spinning off a niche event, called Wireless, next month; it will launch another new show, Digitization and Distribution of Media and Entertainment, or D2ME, in March.

“In many ways we are cannibalizing our own event, but if we don’t, someone else will,” says Courtney Muller, vice president of Internet World Events, based in Darien, Conn. The move is, in part, “a reaction to the Joneses,” Muller admits, “but we’re in a very fast-paced environment. To keep up, we have to keep introducing new products.”

And the “new products” attracting the most buzz and business are the smaller, so-called vertical shows. Attendees appreciate the ease of negotiating a 10,000-square-foot trade show floor rather than a 100,000-square-foot hall. And exhibitors like selling to a more focused audience.

Producers of the bigger, broader-based “horizontal” shows have responded to the trend on a number of fronts. Some, like Internet World, have created vertical events. “We launch anywhere from five to 10 shows a year,” says Jim Alic, vice chairman of Boston-based Advanstar Communications. “Most shows are either vertical segment extensions of existing shows or regional extensions of shows.”

Others are opting to segment the exhibit floor, organizing the booths into pavilions according to product type or other criteria. The end result resembles mini-versions of vertical shows within the larger event.

Time pressed
Industry experts agree the presence of more vertical shows is a result of a harried business climate. “If we weren’t under such time pressure today, there would be longer and more horizontal shows,” says Francis J. Friedman, president of Time & Place Strategies, a trade show consulting firm in New York City. “But in the [trade show] research, people say, ‘I can’t afford to be out of the office.’”

The smaller, more targeted vertical show seems more penetrable and organized to the attendee, says Bob Lucke, executive vice president of Atlanta-based Expo Exchange. The horizontal show ends up looking haphazard in comparison. “Vertical shows speak to the issue of large shows becoming unfocused,” says Lucke, who is based in Frederick, Md. “I think the niche events are growing and will continue to grow.”

Michael Hughes, director of research services for Los Angeles-based Tradeshow Week magazine, pegs the niche event as one of several key trends for 2001. “There’s a need for highly specialized events,” says Hughes, especially in the technology sector, where the demand for vertical shows has created a “super-competitive” trade show market.

As attendees search out new vertical shows, so do exhibitors. Andy Wahtera, group president of Alexandria, Va.-based IBM Business Partners Events Programs, estimates that 85 to 90 percent of shows in which he places IBM partners are vertical. “We’re not interested in numbers, we’re looking at quality. We would rather see 100 quality buyers than 5,000 tire kickers,” says Wahtera.

Lynn Parry’s exhibit strategy also has flip-flopped. Less than a decade ago, the trade show manager of Apple Rubber Products in Lancaster, N.Y., exhibited primarily at the major national events. Now, she concentrates her efforts on shows geared to a specific industry niche. For Parry, her numbers prove the cost-effectiveness of vertical shows to her business. At an event that attracted 30,000 attendees, Apple Rubber Products generated 353 leads. At a show with 3,000 attendees, the company still generated 137 leads. Parry spent $60,000 to exhibit at the national show and $5,000 for the vertical event.

“People know about the national shows; they go there for the image. But I go to the niche shows because I need the business,” says Parry.

Ipswitch Inc., a Lexington, Mass.-based software company, also has reconsidered its exhibit strategy. “An average company cannot compete [at national shows] with bigger companies that have massive amounts of money to burn,” says Scott Hunter, manager of events and channel marketing. “We could spend $500,000 to compete, but someone can always spend more.”

In fact, Hunter decided against signing up for next year’s Internet World in New York City, complaining the show has attracted a growing number of consumers and fewer attendees buying business-to-business products.

As exhibitors feel greater pressure to prove a return on investment on trade shows, the horizontal event has come under greater scrutiny, says Skip Cox, president of Exhibit Surveys in Red Bank, N.J., a trade show research firm. “People look at where the horizontal show fits into their event strategy.”

Learning process
Segmenting a major show has its obstacles. The trade show producer attempts to separate the show floor according to product categories and reposition exhibitors in their respective pavilions.

The problem is, exhibitors often are reluctant to move from their traditional spots on the show floor and risk being relocated to a less-desirable area. Nor do they want to be near their biggest competitors. “Exhibitors don’t like segmentation until they understand its value,” says Cox. He estimates 80 percent of attendees favor segmentation, and the same percentage of exhibitors oppose it.

The Supermarket Convention and Annual Exposition lost several exhibitors after the show was segmented, says Mike Smoyer, vice president of conventions for the Food Marketing Institute in Washington, D.C. “We’ve had exhibitors pull out because they don’t like the segmentation. One building says all the business is being done in the other building.”

Despite some hesitation among exhibitors, most producers can claim a more successful horizontal show because of segmentation. “I’ve been through many meetings where people assail the big show, calling it a dinosaur,” says Chris Brown, senior vice president, conventions and expositions, for the National Association of Broadcasters in Washington, D.C. “The segmentation has allowed us to address that issue. We say ‘bigger is better’ because this is a place where you can see all [aspects of the business] come together.”

For the show producer, however, segmentation is not without its logistical problems. For example, Brown has had to rethink the process of how booth space is assigned at the National Association of Broadcasters annual show, which first segmented its show floor in the early 1990s. For years, the Washington, D.C.-based organization would assign space according to a predesigned floor layout. Generally, large companies would stay in the same segments and ask for the largest booths. Now, however, not only are smaller companies requesting the larger booth spaces, some exhibitors are asking for booths in more than one pavilion.

For the 2001 event, which is reserved by exhibitors at the 2000 show, Brown ran out of space in popular pavilions and had to create a catchall pavilion in a less desirable area. For 2002, he plans to design the floor as exhibitors sign up for booths, so he can alter booth sizes and pavilion locations more easily.

Growing pains felt by the Washington, D.C.-based Biotechnology Industry Organization also are forcing organizers to consider new procedures. The annual Biotechnology Show aims to segment 40 percent of its floor into geographical areas. But the popularity of the pavilions is making it harder for organizers to maintain that percentage.

“Demand for more space in the pavilions has depleted the space elsewhere,” says Tonia Rice, exhibits coordinator. The Germany pavilion, for instance, had 18 booths in 1996. In 2000, it had ballooned to 72. This year, the Germany pavilion will have 80 booths. “We don’t want a Germany show. We want an international show,” complains Rice, who estimates the 2001 show will be more than 50 percent segmented.

To gain some control, Rice has come up with two separate priority point systems, one for individual exhibitors and one for pavilions. The latter system will be based on the size of the pavilion, its number of sponsors and years of participation in the show. Priority pavilions will receive better placement on the show floor.

If you can’t beat ’em&
Segmentation has been one solution for the horizontal trade show producer, but it is not enough to compete with the rapid growth of niche events. Another tactic: Some horizontal shows are creating their own vertical events.

For example, Internet World began as a vertical event within the computer industry. Over the past seven years it not only has grown to be called by some in the technology industry the “Comdex of the Internet Space,” it has sprouted a number of vertical shows, including the soon-to-launch Wireless and D2ME, to address the increasingly specific needs of the Internet community.

“Internet World is strong, but we’re not naive enough to think that other companies won’t encroach on our space,” says Courtney Muller, who, along with her colleagues, oversees two new CEO conferences and the two new niche shows, along with three domestic Internet World events.

Regional shows are an effective way for producers to reach a more targeted audience, says Tradeshow Week’s Michael Hughes, who points to regional events as another key trend to watch for in the trade show industry this year. “Not every software engineer in Atlanta is going to fly to PC Expo in New York or Comdex in Las Vegas,” says Hughes. “Instead of drawing attendees to the show, [producers are bringing] the smaller show to the attendee base.”

Smoyer has been spinning off vertical events from the massive Supermarket Convention and Annual Exposition for several years. A show focused on pre-packaged meals, a hot trend during the mid- to late ’90s, was spun off in 1996 and lasted for three years. A general merchandise show ran from 1992 to 1996.

The two niche events have been shuffled back into the annual event, but a vertical show called Marketechnics continues to draw crowds. It has survived, says Smoyer, by drawing upon a different attendee base. “With Marketechnics, we’re getting the tech people who don’t come to the [annual] convention.”

Smoyer doesn’t seem bothered that two of his vertical events are no longer. What is important is that the association is recognizing and responding to trends in the industry. “We are working very hard and not resting on our laurels,” he says. “Just because we’ve been successful for the past 64 years doesn’t mean we will be in the future.”

FOR EXHIBITORS ONLY

One way to please exhibitors is to give them a chance to shop the show. George Little Management, based in White Plains, N.Y., has begun to offer pavilions geared toward exhibitors’ needs. Participating exhibitors have an opportunity to sell their wares as well as to develop their own product lines.

At the Home Textiles Show last September, for example, GLM added two segments the Fabric and Trim Pavilion and the Surtex Gallery, showcasing a group of designers both of which sell to the show’s exhibitors. “We look at each market for places where we can fill a need for the exhibitor and a need for the attendee,” says Alan Steel, executive vice president of GLM

Sometimes the exhibitor-focused area is a separate pavilion; at other trade shows, exhibitors get a separate but concurrent event. The beauty of splitting into such segments, says Steel, is that once you create a separate brand within the main event, it is relatively easy to then turn it into a regional event in another city.

C.B.

NO MATTER HOW YOU SLICE IT&

The first challenge for the show organizer is to decide on the logical segments for the event. For one show, it might make sense to divide according to product category. Another might warrant geographical boundaries.

Also, consider proximity, says Skip Cox, president of Exhibit Surveys in Red Bank, N.J., a trade show research firm. Pavilions of similar ilk should be grouped together, so an attendee interested in one pavilion can easily find a related counterpart.

C.B.