By Dom Serafini
When U.S. President Barack Obama criticized companies like financially-troubled insurance giant AIG for their lavish and inappropriate trade traveling, the U.S. exhibition industry reacted angrily. Even the President’s key advisor, Valerie Jarrett, got involved. Through their own trade press, the exhibition industry pointed out that exhibitions and events shouldn’t be lumped together with lavish junkets and wasteful retreats, and that the sector is of vital importance to the U.S., representing a $240 billion a year industry that supports 2.4 million jobs.
In the initial stage, the industry had done little to support its own cause, apart from explaining their own needs, instead of proving the importance of trade shows to the exhibition-prone industries in general.
However, the sector has since wised up and started to present facts and figures to indicate how trade shows benefit exhibitors and not just the exhibition industry itself. It started by leveraging the obvious negative element that failure to attend an event could be interpreted by the marketplace as a signal of distress or decline. But the industry also highlighted some positives.
For example, according to Forrester Consulting of Cambridge, Massachusetts, 61 percent of marketers consider face-to-face exhibiting the most effective means of building a brand image. Furthermore, the Dallas, Texas-based Center for Exhibition Industry Research has calculated that, on average, it costs $215 to make a face-to-face visit with a potential customer at a trade show, and $1,039 to obtain similar results without using the organized events.
In addition, the Norwalk, Connecticut-based Event Marketing Institute found that 53 percent of sales and marketing professionals consider events to be the best vehicle for accelerating business relationships.
According to Doug Ducate of the Center for Exhibition Industry Research, for the past 20 years, the success story of trade shows was measured by their rate of growth. If a trade show had 10 percent more attendees each time, it was hailed a winner. “We sold that message,” Ducate told Meeting & Conventions magazine. However, market organizers now realize the weakness of that argument. Better measures of an exhibition are the quality of its attendees.
In the past, trade shows such as NATPE built their success on “real estate,” meaning the sale of square footage of floor space through large volume discounts. They prided themselves in how inexpensive said space was. This, however, encouraged the creation of larger and larger booths that eventually became too expensive to maintain, and thus as soon as the industry began to consolidate, recession began to take hold and cost-cutting became the norm, that kind of growth came back to hound trade shows like NATPE.
The lesson for show organizers should be that it is better to keep an eye on the future, not just on quarterly growth.
Similarly, the lesson for exhibitors should be the realization that trade shows are, in many ways, essential for their business and pulling out of a show to better the quarterly numbers with cuts rather than with sales growth, ultimately doesn’t pay off (except if management feels it’s on its last legs and wants to exit with a bang, leaving the underlying problems for its successor).