I’m finally catching up on some reading and came across this article from B2B Magazine. I agree fully with Mr. Callahan’s assessment of the enduring appeal of trade shows and am energized by the industry outlook provided.
Enjoy!
Trade shows exhibit enduring appeal
Sean Callahan
March 14, 2011 – 9:46 am EDT
Trade shows have roots extending back further than Gutenberg. So why is this ancient medium standing tall in the digital age?
Carter Kersh, Juniper Networks’ director-Americas field marketing, said his business unit plans to double event spending this year. The reason, he said, is simple human nature: “We do virtual events, virtual training and webinars. All of those things are great, but sometimes people have to shake a hand, touch a box, feel in a visceral way what a company is about.”
Kersh isn’t the only one who feels that way. The CEIR Index, an aggregate of four event industry metrics compiled by the Center for Exhibition Industry Research, increased 4.1% last year compared with 2009—an indication that trade shows are emerging from the recession strong. In last year’s fourth quarter, each of the CEIR Index metrics increased compared with the year-earlier period: exhibiting companies increased 2.1%; revenue, 4.2%; professional attendance, 5.4%; and net square feet, 5.6%.
SPENDING TO REACH OVER $15B
In its “Communications Industry Forecast 2004-2014,” Veronis Suhler Stevenson projects that trade show spending will reach $15.63 billion in 2014, which will make it larger than the predicted combined total of e-media spending ($8.03 billion) and print ad spending ($6.36 billion).
The growth in events wouldn’t be possible if attendees still didn’t see value in traveling to trade shows. “We have so much information coming at us digitally and with great speed,” said Roland DeSilva, managing partner of media investment bank DeSilva & Phillips. “The need for human interaction to clarify what all that information means is essential.”
On the other side of the booth, the growth depends on b2b marketers’ continued belief in the medium. “Outsell continues to see a steady demand for marketing spending on trade shows and conferences,” said Chuck Richard, VP-lead analyst at research firm Outsell Inc. “Marketers consistently rate them as among the most effective marketing and advertising they do.”
DOUBLE-DIGIT INCREASE
Kersh’s business unit isn’t the only part of Juniper to increase its spending on events. The company is boosting its overall spending on events this year by “double digits,” said Marie Condon, senior events manager.
Juniper practices conversational marketing, looking to engage customers and prospects in a long-term dialogue, Kersh said. Trade shows fit that strategy. “Having those conversations face-to-face enables customers to ask a lot of questions and to spend time with the leadership team, not just with our sales team,” Kersh said.
At trade shows, Juniper organizes more intimate gatherings with customers and prospects in addition to having a booth on the exhibit floor. “Often alongside our booth, we have small private events—something that is restrictive and might require an NDA [nondisclosure agreement],” Kersh said. “They’re kind of like “whisper events’ where we may tell a select group of customers what we haven’t announced yet. We let them see that and ask questions.”
Aon Corp. is another believer in events. The company plans to maintain its spending on trade shows this year, said Hans van Heukelum, VP-global marketing for Aon Risk Solutions. The company divides its event commitments into three basic categories: large industry trade shows, Aon-produced events and local events.
“For us, in-person meetings are hugely important,” van Heukelum said.
At large shows Aon, like Juniper, strives to create opportunities to meet with customers and prospects one-on-one. At this year’s Risk Insurance Management Society trade show, which will be held in May in Vancouver, B.C., Aon will again host “Clientopia.” This is an area off the trade show floor where Aon customers have access to refreshments, computers and chargers for their mobile devices.
“Anytime we have direct interaction with our clients, it leads to a higher ROI,” van Heukelum said.
Business information companies see ROI from operating trade shows and, as the trade show industry recovers, they’ve been acquiring events. Last year, Reed Elsevier and Nielsen Co. couldn’t move fast enough to dump their b2b magazines, selling them at fire-sale prices or simply closing them down. But these companies continue to invest in events.
HOT DEALS ON EVENTS
Over the past few months, Reed and Nielsen, as well as United Business Media, have each acquired events businesses. Here’s a sampling of recent deals:
This month, UBM acquired SATTE, a travel and tourism exhibition in India, and a 60% stake in Famdent, which produces dental events in India. These small deals followed last year’s $287 million acquisition of Canon Communications, which generated about half its revenue from events.
In February, Reed Exhibitions Brazil acquired Multiplus Fairs and Events, which produces an ethanol manufacturing event, Fenasucro. Chet Burchett, president of Reed Exhibitions Americas, said in a statement, the deal is “important in our long-term growth goals for Brazil.”
In November, Nielsen Co. obtained the Wedding and Portrait Photographer International trade show. As part of the deal, it also acquired two photography industry magazines: AfterCapture and Rangefinder.
UBM CEO David Levin compares the continuing relevance of trade shows in b2b marketing to the changes the digital age has forced upon the music business. “Why is it that people are still going to concerts and paying a ton of money when they can download the music for free?” Levin asked rhetorically. “It’s for the human interaction.”
REAL VS. VIRTUAL SHOWS
On one hand, trade shows do what Google and other online entities can’t: They occur in the real, not the virtual, world. On the other hand, trade shows have a lot in common with online marketing, because they deliver measurable results and engagement, Burchett said.
“There’s a long-term need to enhance the traditional trade show experience and develop online tools to improve it,” said John Wickersham, a partner at Atwood Advisors.
Burchett said Reed Exhibitions has developed mobile apps for the large majority of its events. These apps help exhibitors and attendees plan their trade show experience and navigate the show floor. UBM Studios, a division of UBM, offers the capability to create virtual trade shows to complement those in the flesh-and-blood world.
“With the impact of the Internet, trade show operators now have the golden opportunity to turn a three-day event into a year-round interaction with their industry communities,” said Richard Mead, managing director of media investment bank Jordan, Edmiston Group.
This potential to expand the influence of events may lead to more M&A activity in the trade show sector. The market is fragmented, and the opportunity exists for a rollup by private equity funds or continued buying by publicly traded companies such as Nielsen, Reed Exhibitions and UBM.
Doug Ducate, president-CEO of CEIR, pointed out that the majority of trade shows are owned by associations not corporations. “Finally,” he said, “that’s something we sense may be about to change.