February 2005
6 hot trends for corporate events

Companies like Novell are investing more in customer events to capture their best audience and deepen the discussion without competitors around. In return, they’re holding intermediaries to iron-clad budgets, emphasizing education and peer-to-peer interaction and joining up with strategic partners. How will these trends impact corporate events in 2005.

By Maxine Golding

All the stars promise to align in 2005 — improved economy, increased business travel, healthier pool of marketing dollars — making it a banner year for corporate shows and events.

Novell Inc. is a prime example. As it rebuilds its proprietary shows back to their peak prior to 9/11, the company is increasingly microscopic — hosting events for sharply defined markets and solutions, joining with strategic partners in technology-specific road shows, and gaining more face time via demos and networking.

“We want to be perceived as a leader and affiliate in an educational situation with major players in that solution,” says Karen Zunkowski, Senior Event Marketing Manager for Novell (www.novell.com). 

Microsoft Corp., too, is going beyond its largest shows and scoring with smaller, highly focused private events in vertical markets and audience segments. And RSA Conference is rolling out single-day, regional versions of its ongoing flagship.

According to these corporate event producers and other major industry players, all signs portend continued growth in 2005 in the corporate event marketing budget. Proprietary events — particularly road shows and smaller, vertical events — are expected to take just about all of the increase (without cutting into traditional trade show marketing dollars).

We’re not just talking small here — one corporation that works with Freeman Custom Events Division uses 600,000 square feet in exhibit-related space, while Novell contracts 462,000 square feet for its BrainShare North America conference: exhibits (its own and partners), general sessions, meal service, analyst activities, and entertainment events.

From 2003 to 2004, corporate spending on customer and partner events increased 50 percent, according to an annual marketing benchmark audit of 100 technology companies by IDC CMO Advisory Service (www.idc.com), a firm owned by IDG. In 2003, 11.1 percent of total marketing spend was allocated to events; in 2004, that number rose to 13.6 percent. Meanwhile, the 4.5 percent of total marketing spend that went to customer and partner onsite events in 2003 became 6.8 percent in 2004.

Other key shifts bode well for proprietary shows, adds Michael Gerard, IDC Director: the move to consultative selling; higher-level executive targeting; vertical segmenting; and changing channel strategies. But two corporate objectives that lend themselves very well to private events are really fueling the growth: deeper product knowledge for customers, and increased business from existing customers.

Corporations know they must work consolidation, which has reduced the number of customers and competitors in many sectors, to their advantage. The best and most economical bet is to tap existing customers for more business. Since peers remain the No. 1 influence in buying decisions, companies set their sights on the right kinds of people to talk with in a captive environment.

The bottom line: “People can spend more time interacting and learning about products and services at proprietary events,” says Michael Westcott, Vice President, Marketing, The George P. Johnson Co. (GPJ, www.gpjco.com).

Companies clearly are investing more in customer events to capture their best audience and deepen the discussion without competitors around. In return, they’re holding intermediaries to iron-clad budgets, emphasizing education and peer-to-peer interaction, joining up with strategic partners, and getting the best return on objective they can muster. Find out how these trends will impact corporate events in 2005.

Trend #1: Corporations will hold more events and commit earlier, but demand more from third-parties and intermediaries.
Novell’s international BrainShare conferences were curtailed from a high of five prior to 9/11 to three held last year in the United States, Europe and South Africa. Novell now plans to reintroduce one in Japan and possibly another in Australia this year, with the corporate event budget growing slightly to supplement regional budgets.

“The good news for everyone playing in this space is that corporate shows and events will grow in 2005,” says Bob Moore, Executive Vice President/Sales, Freeman Corporate Events Division (www.freemanco.com). Freeman will service several hundred large corporate events in 2005 for some 150 corporations from the Fortune 1000, as well as more than 1,000 smaller corporate events in hotels throughout North America.

Freeman received more corporate RFPs in six weeks over October and November 2004 than in the prior four months. Corporate business also ballooned 32 percent in 2004 for Nth Degree, and its managed events grew in both size and attendees. Nearly all of these events are being re-funded, a true change from before, when companies tried events and did not repeat them.

Corporations also are jumping off the fence and committing earlier. “It’s interesting that at the end of third quarter 2004 and well into the fourth, people had money left in their budget and were not pulling back. They’ve realized how important these events are,” says Karen Daniele, Vice President and General Manager, Nth Degree (www.nthdegree.com), an event management company that produces more than a dozen events a year for corporate clients, with RSA Conference its largest.

From where Don Knox sits as Director of Custom Media for Windows IT Pro Group of Penton Media (www.penton.com), technology companies that typically produce user group or customer conferences are interested in as many as six custom events annually that target smaller groups of customers.

However, every company is reevaluating how to get more quality, uniqueness and value from their events through greater creativity from suppliers and closer control of funding. With corporate procurement engaged in the process, companies are very careful about where and when they need to spend to attract precise targets, notes Dan Hoffend, Vice President/Sales, Corporate Accounts, for the Freeman division.

Indeed, Microsoft (www.microsoft.com) aims to spend less money on private events, even as the absolute number of events may rise. Because the costs of these events are “staggering,” reports Jeff Singsaas, Microsoft Events General Manager, everything is fair game for scrutiny: technical production, food and beverage, show collateral.

How to do better with the same money or less? That’s the question dogging Cerner Corp. (www.cerner.com), as its event budget remains flat for 2005, but its annual Cerner Health Conference must continue to top itself. This was a particular challenge when the 2004 event moved for the first time to Orlando, FL, from the corporation’s home base of Kansas City, MO, and 300 associates had to travel. To resolve some resource constraints, Dana Sargent, Health Conference Manager, is rearranging the responsibilities of the three-person event-planning team and utilizing individuals throughout the company as adjunct “commanders.”

As Corporate America gets smarter, attendees, too, are wising up. They’re appearing at corporate events in record numbers and not just to interact with top management and industry “stars.” Education on specific products and services will make them more valuable to their employers and more marketable in their careers. And to be truly worthy of their presence, private shows will be forced to take up less of attendees’ time.

Trend #2: Education and solutions — not razzle dazzle — will take center stage, with product demonstrations integrated into the learning process.
In a very short time, the marketing-oriented private event model — even for product launches — has turned into knowledge exchange. Corporations are asking: “How can we make our customer’s and prospect’s lives easier?” Attendees are answering: “Solve our problems.”

This new model puts education and hands-on experience as its centerpieces, relegating entertainment to a supporting role. “A little entertainment is good, but if there’s too much, attendees realize they’re paying for it,” says Robert Lowe, Conference Architect, Nth Degree. “Companies that felt it necessary to entertain to promote their brand realize that brands are built on the products and education they deliver.”

Microsoft events have historically had a firm grounding in education, as well as hands-on labs for people to experience solutions. Tech-Ed alone has as many as 800 PCs for attendee use. “That way people leave feeling they’ve received real value for the cost to attend,” says Singsaas.

More than 85 percent of attendees at Cerner’s show are there for the education. So it may not take much to achieve Cerner’s goal for 2005 and beyond: the conference becomes the “must-attend” event of the year for clients and partners. Peer-to-peer training over two-and-a-half days in 320 breakout sessions — 70 percent led by client presenters — promises to make that happen.

At the RSA Conference (www.rsaconference.com) that Nth Degree manages, eight sponsors pay $200,000 each for special visibility, and “all scream for a session,” says Daniele. “A lot more time is spent developing tracks and segmenting groups because companies want to sponsor these. They’re really trying to define who their customers are.”

Education and solution awareness are as critical as lead generation for Novell at its private events, as well as in its role as sponsor at other companies’ proprietary events. “We’re seeking out events with strong conference tracks and content, as well as speaking and demonstration opportunities for us,” says Zunkowski. “These draw a more qualified audience and provide the face time for our message and the chance to experience solutions first-hand.”

While still important, exhibits at corporate shows are morphing from “product centers” into “experience centers.” These customer-centered displays are being fashioned with conference rooms and briefing centers.

Trend #3: Creating a sense of peer community at corporate shows will be paramount in 2005. That community will be smaller and more select, the event environment more personal and productive, and the venue more local.
Corporate shows are making themselves more convenient in format and location as they pinpoint vertical, regional markets. Narrowing the focus to best prospects and customers improves the quality of interaction and builds the corporate relationship.

At the 2004 RSA Conference, exhibit space grew 10 percent to 160,000 net square feet and attendance 20 percent, to a total of 12,000 participants. This year, it adds two regional versions of the five-day flagship on information security, each aimed at vertical audiences. The single-day events offer the key components of a successful private event today: primarily education, with networking and exhibits on a smaller level. “To make a brand and cut through the marketplace noise, you have to teach more often than once a year,” says Lowe of Nth Degree.

The increasing attention to smaller, sharply focused segments may be due, in part, to large-scale, broad-based industry trade shows that are challenged to make the one-to-one connections people demand.

The demarcation line appears to be 9/11. Companies that traditionally ran private events or exhibited at major industry shows were forced to look for new, creative ways to meet with potential customers who had stopped traveling. Their increasingly popular choice: take the events to customer sites.

“From the attendee perspective, the advantage of the road show model is clear,” says Knox of Penton. “It’s free and delivered to their backyard. They don’t have to fly somewhere and hang out for four days.”

It’s taken a few years for these truck tours and road shows to catch on. Now, some companies are having “huge successes,” notes Daniele. “It’s a more economical way of using resources to expand the audience and shorten the sales cycle.”

And taking a “best of” the flagship show directly to vertical markets need not cannibalize the parent event. Research has confirmed this won’t happen for the RSA Conference. Instead, Nth Degree expects the new regional events to develop a “farm team” of attendees that will feed the flagship.

Trend #4: More corporate events in 2005 will be subject to clear measures of results and effectiveness of marketing spend.
Here’s the proof that event marketing attains corporate objectives: half of companies that measure results plan to increase their events budget, according to GPJ.

Service providers can thank themselves. “We’ve educated clients to understand that our industry is measurable,” says Lowe. “Even companies that haven’t adopted measures can justify their private events when they see IBM spending millions on metrics.”

Corporate events are sizzling because they control and focus the customer experience — whether the goal is lead generation, brand awareness or product knowledge. These shows, however, also have to prove their worth to partners and attendees. Such anchor sponsors as Microsoft and Symantec would not be at the RSA Conference, for example, without an independent audit that confirms the show’s draw and value.

As for attendee value, the growth of smaller, more focused corporate events matches an increase in highly specialized people who need to continually educate themselves on solutions.

“Companies that send key staff to these events are making a fairly small investment for a potentially significant impact on productivity and cost savings,” says Zunkowski. “And their people are more willing to attend an event focused on their specialty, rather than wander around a horizontal event.”

As companies seek to leverage their spending, service providers like Freeman are finding more events and requirements folded into the corporate RFP. Their clients expect “more for their dollars and more consistency,” says Moore, “and more imagination and creativity.”

But not more time. The planning window for corporate shows will continue to contract in 2005. “Suppliers have to deliver on a dime, or they won’t be around,” Moore adds. Vendors with the capability to respond will reap the rewards, and corporations will pay for that flexibility. 

Microsoft, however, is driving in the opposite direction and expanding its planning horizon. “We’re taking the time and having the patience to stick to our strategy,” says Singsaas. Despite the occasional emergency event planning, the corporation now looks to book as far as 18 to 24 months out, rather than the six months it used to.

Trend #6: Corporations will seek out more strategic partners and co-locations, making some private events into real revenue-generators.
Corporate events will not be watered down for the sake of some additional sponsor dollars. However, for Cerner, partner participation offers its Health Conference attendees great access to individuals representing 80 suppliers and the technology they offer. “They can tell the success story of how they interact with Cerner to provide a solution,” explains Sargent, a significant benefit to the show host in addition to sharing event expenses.

Indeed, “some companies have such good reputations that with partners and sponsors their events more than pay for themselves,” says Westcott.

That’s the very model Penton is using in developing custom road shows. Two to four primary sponsors share the bulk of expenses, with supplemental partners recruited to offset the remaining costs. “In essence, we’re creating a very small trade show-type environment,” says Knox, but with no more than 15 or 20 sponsors. “It absolutely improves ROI and lowers costs for everyone involved, since these events are not inexpensive to run.” That’s clearly of value to this group’s growing corporate roster, which includes Microsoft, Hewlett Packard, Citrix, Cisco, McAfee, and T-Mobile.

Microsoft’s larger corporate shows — Tech-Ed, Convergence and Professional Developers Conference — feature a prominent exhibition area that makes partners feel they’re getting good value for what they’re spending to participate. Even better, at Microsoft road shows the partner expo is set up where food is served, giving them “super-great traffic,” says Singsaas. “In the big picture, the expenses are relatively insignificant to our partners.”

Such events may not be the best at lead generation or high traffic, but sponsor participation is a goodwill gesture (often reciprocal) and associates partners with powerhouses.

Novell finds considerable value in smaller, solution-specific road shows that engage highly qualified customers and draw strategic partners as co-sponsors. Says Zunkowski: “It’s not a money-making scenario, but partners absolutely defray costs.” More importantly, more companies want to partner with Novell, placing the company in a desirable market position.

Creative combinations of partners will appear — unrelated companies that value a similar audience, for example car makers and cosmetic companies, suggests Westcott. Show producers can play a part in this, as facilitators, and in another promising opportunity rising on the corporate radar screen: co-locations.

“We’ve batted that around a lot at Microsoft,” Singsaas says, but the jury is still out. “How do we conserve employees’ and executives’ time and cost? If we can take over a venue for a month, do we run three shows through, rather than hold those in three geographical locations?”

Penton sees real potential in co-location of custom events with larger shows. “This kind of boutique show within a show can leverage hundreds or thousands of people coming to the larger event,” Knox says.

Trend #6: More corporations will tap the expertise of show organizers for a turnkey solution.
Outsourcing meeting management functions has been a no-brainer in recent years, as companies relentlessly pare their operations to core businesses and streamline nonessential staff. Now that private events have grown more vital to the marketing mix, some corporations are looking for end-to-end approaches from those who manage shows as a business.

“Their goal in working with a brand like ours is to gain third-party credibility and present a message that is not completely biased,” says Knox. The added ability of show organizers to bring the right audience to custom events makes for a powerful combination. “It’s a simple matter of giving companies exactly the ideal experience they want their customers to have,” he adds.

It’s lucrative, as well. In two years since the division was launched, Penton has grown revenues from custom events to $4.5 million.

Why buy custom event services from a show organizer? Many reasons: access to its database, on-site event management expertise, lead tracking and post-event analysis. But as event planners seriously consider a turnkey solution, they also take a fine toothcomb to costs and margins in these complex proposals.

“They’re intimately aware of how the process works,” says Knox. “Our biggest challenge is to show why we are valuable to them.”

On the other hand, some corporations believe that no one can speak to their customers better than they can. Cerner had outsourced the exhibit sales piece of its show and, while the effort just about hit goal, most of the action was inbound, not outbound. The result: Cerner will bring the function back in-house to maintain a consistent message and better manage the process, saving a good deal of the retainer and commissions it paid.

A word of caution
Corporate shows, though ascendant again, must watch their backs.

“To stay relevant and vital to their most important constituents and communities, corporations must display leadership, focus and innovation,” says Westcott. This is a decided challenge when demand for private events outstrips resources.

Novell’s Zunkowski would like to help the field sales and product marketing teams “bring up their events a notch or two, but this can open up a Pandora’s box of additional events we can’t adequately support,” she says. It’s a common concern of large companies with multiple product divisions. Indeed, some record “sticker shock,” she says, when they learn how much a well-produced event will cost.

And others worry that there will be too much of a shift to proprietary events. “You can’t completely replace what attendees get from industry events with proprietary events,” warns Lowe.