February 2006
From the Editor: The new online threat
Remember 10 years ago, when the industry was abuzz about the threat of virtual shows, and everyone was worried about whether the Internet would kill trade shows? Of course, that threat has come and gone, but we do face more competition for marketing dollars from online. In 2004-2005, 48.7 percent of business-to-business (B2B) marketers used online marketing, and that number is expected to grow to 54.6 percent by 2008, according to “The B2B Digital Marketing Shift,” a study conducted by Forrester Consulting on behalf of American Business Media. In fact, the use of online marketing — which includes ads, search, e-mail, directories and sponsored Web content — is expected to grow more than any other marketing tactic in the next three years.

The good news: The study reveals that in-person events — which include trade shows, conferences, product demos or presentations on industry topics held at a hotel or other meeting facility — are still the most popular marketing tactic, with 60.2 percent of B2B marketers using them in 2004-2005, and 60.8 percent planning to use them in 2008. We won’t be losing marketshare by 2008, but we won’t be gaining much either.

In 2005, B2B marketers spent 15 percent of their budgets on those in-person events, second only to marketing communications at 16 percent. Twelve percent was spent online. In contrast, online marketers (vs. offline marketers who didn’t use any online marketing in 2004-2005) already shifted 24 percent of their budgets to online, compared with 16 percent spent on in-person events.

At the same time, in-person events were rated the most effective marketing tactic for brand building and lead generation in 2005. When asked to rate a dozen marketing tactics, 60.9 percent of respondents gave in-person events a rating of 5 or 6 for brand building, based on a scale of 1 to 6 with 6 being most effective. For lead generation, 62.6 percent gave in-person events a rating of 5 or 6.

So why aren’t B2B marketers spending more of their budgets on in-person events, if they’re so effective? This is the question we need to be asking our customers — exhibit managers and C-level execs.
Still, there’s no doubt that online marketing is gaining popularity as a more mainstream marketing tactic. But the Internet is not only a competitor for marketing dollars, it continues to offer a new revenue opportunity for shows. In 2005, B2B marketers spent 37 percent of their online budgets on industry-specific sites, 9 percent on Web events, 8 percent on e-mail lists and 6 percent on online directories. These are products most of us already do or could easily offer.

But most shows — both for-profit and association — simply aren’t focusing their sales efforts on online revenue. In fact, show organizers are planning to spend more than they make online in 2006, according to Marketwatch: Show Web sites (January 2006). But if these studies (not to mention dozens of others) are any indication, we’re leaving money on the table.