July 2000
Teaming up for success

DMA shows at a glance

by Michael and Linda Kephart Flynn

ChrisGallagher likes to keep things simple. Every time he wants to add an event tothe Direct Marketing Association’s (DMA) calendar, he asks one question: Willit help our members do business?

Occasionally the answer is no, admits DMA’sSenior Vice President of Conferences. But many more times in the New York-basedassociation’s 83-year history, the answer has been an unequivocal “yes.”

While most associations produce a median of twoshows annually, according to EXPO’s 1999 Show Management Salary Survey,DMA will produce 25 events this year — including a 150,000-square-foot annualshow; six smaller niche-focused trade shows, ranging from 20,000 to 66,000square feet; 10 targeted conferences that include tabletop exhibits; and eightconferences with the potential to develop into tabletop events, then perhapsfull-on exhibitions as they mature.

“It all comes back to serving ourmembership,” Gallagher says of a schedule that exceeds those of manyindependent show management companies. “If we can offer something that helpsthem run their companies better, be more successful with their clients and makemoney, then we’ll try it.”

Cash machine

Fulfilling its 4,600 memberorganizations’ needs through conferences and trade shows has another importantbenefit for DMA: The events make money.

According to the association’s most recentannual report, trade shows and conferences accounted for more than $14.5 millionin revenues for the year ending June 30, 1999, more than twice as much as thedepartment’s budgeted expenses of $5.6 million, and nearly half of DMA’stotal gross.

By comparison, research from the AmericanSociety of Association Executives shows that conventions, educational programsand exhibit fees combined average about 25 percent of revenues for mostassociations.

And DMA’s numbers are going up. Theassociation’s event-generated income in 1999 was 15 percent higher than the$12.6 million a year earlier. Even better, Gallagher’s most recent estimatesshow that his department’s earnings for the year ending June 30, 2000,increased by another 30 percent, to $19 million.

“Education is our No. 1 aim,” Gallaghersays, “and our trade shows and conferences revenue figures support that.”

The big one

Everything began and still revolves aroundthe association’s workhorse, The DMA Annual Conference & Exhibition — tobe held for the 83rd time this October in New Orleans’ Ernest N. MorialConvention Center. “The annual conference is the one meeting everyone indirect marketing must go to,” Gallagher explains. “All of our conferenceshave exhibit, networking and education components, but at the annual show,networking is first, exhibits are second and education is third inimportance.”

This year’s show will feature 21.5 hours ofdedicated networking time at receptions and luncheons. In addition, fourpre-conference weekend events are available to delegates.

The annual event is a broad, horizontal showwith a number of vertical tracks. Business-to-business, catalogs andinternational marketing are among those vertical components. Last year’sToronto event drew 492 exhibitors to 108,300 net square feet of space. Already,this year’s show has commitments for 509 exhibitors and 125,200 net squarefeet. More than 15,000 industry members typically walk the floor.

For DMA, the annual conference is just thebeginning. Its fertile ground has sprouted an intricate array of otherexhibitions, conferences, seminars and symposiums. The events range from theNet.Marketing Conference & Exhibition and the Brand Marketing Conference& Exhibition, to the 17th Annual Catalog Conference and a National Centerfor Database Marketing show.

“Some of these have been around for years,and others are very new,” Gallagher says. “One reason we have so many eventsis that our association represents a technique, not an industry.” DMA’smembers include consumer and b-to-b marketers who employ a number of techniques,including
telemarketing, catalogs, direct mail,
TV, radio, newspapers, magazines and the Internet.

To meet that broad audience’s needs,Gallagher and his 30-member department look for sweeping event themes that applyto many kinds of businesses, such as the Telephone Marketing Conference &Exhibition, and for very targeted ideas, like the Pharmaceuticals: Direct toConsumer Conference.

“We kept hearing our pharmaceutical companymembers say their customers weren’t doctors but the patients who read aboutproducts in places like Newsweek and then ask for them,” he says.“That helped us realize there was a need for a business-to-consumerconference, which we hold in Philadelphia to be close to the majorpharmaceutical companies.”

The association’s fastest-growing show,Net.Marketing, evolved from DMA’s annual spring conference. After 31 years,attendance was falling, so in 1997, that event was overhauled to focusexclusively on the growing importance of the Internet to marketers. Today, 90percent of DMA members market via the Web.

By this spring, Net.Marketing in Seattle hadgrown to 134 exhibitors and 19,200 net square feet of space — representing 74percent growth in participation and a whopping 140 percent increase in space inonly three years. The event has proven so successful that DMA will add its firstfall show in Boston this September.

“This one has the potential, in six or sevenyears, to overtake the annual show in terms of size and participation,” saysGallagher. “We’re still amazed at how fast it’s grown.”

Gallagher’s annual budget includes fundsfor finding and developing new shows. This year, for example, the departmentwill spend about 2 percent toward that effort.

“My programmers see what trends are coming,then tell me that we should look at something more closely,” he says.“We’ll script out an idea with a master schedule that includes what it wouldlook like, why it’s important and what tracks would be part of it. Thenwe’ll do a budget to see the break-even.” After his group compiles theresearch, Gallagher presents the new show idea to the association’s Presidentand CEO, Bob Wientzen, for approval. “The only time it becomes a boarddecision is if we acquire a show,” says Gallagher.

Because DMA emphasizes education, theorganization is willing to lose money on new launches as long as the conceptseems sound. Gallagher says that DMA considers a penny over break-even afinancial success, and the group will endure two or three years before turning aprofit. “If it doesn’t show a profit within three years, we’ll either getout or try it from some other angle.”

No matter how plausible an idea may seem,however, Gallagher always starts a new event as a small conference, then buildson its success.

“We never, ever start an event with anexhibit floor,” he explains. “That creates an expectation, and if youdon’t get enough response right away, it’s too
hard to regain confidence. Instead, we like to go three or four years without anexhibit floor, using tabletops as we go, then we’ll build in exhibit space ifthe interest develops.”

Productive partners

DMA can juggle its busy event schedule, inpart, by sharing the show load with other organizations. The association co-ownsand co-produces four events —
producing two of the four twice a year — with Intertec Exhibitions &Conferences. (See sidebar, page 40). DMA also produces a number of events withThe Association for Interactive Media (AIM) and, to a lesser degree, theInternet Alliance, two smaller associations that DMA purchased last year.

“We didn’t see these groups ascompetitors,” Gallagher says. “We acquired them because they had the largestlists, and they can help us quickly become known in the interactive world. Eachoperates as an independent subsidiary, with its own budget, president and smallstaff. We help them out by booking their meetings and handling the logistics,but we don’t take any revenue from them.”

This year is each association’s first withDMA. AIM co-
sponsored February’s Net.Marketing and the DMA Insurance & FinancialServices Council XXIV Seminar & Advanced Sympo-sium in April. The InternetAlliance, a policy-driven group,
co-sponsored the Government Affairs Conference, in Washington, D.C., in May.

Woven threads

Although it’s obvious that DMA membershave numerous show and event options, the niche events don’t threaten theannual conference or vice versa, Gallagher says.

“From the exhibitor point of view, yes,certain companies appear only at the smaller shows,” he says. “We don’thave a lot of list brokers at the annual show, for example, but that’s becausethose companies can’t afford a large booth. On the other hand, nearly allexhibitors at Net.Marketing will exhibit at the annual show, too. It justdepends on the segment.”

Attendees also crossover between shows,although DMA doesn’t track that flow. “The crossover is more by companies: Isee a company’s top managers networking at the annual show, then differentpeople from the same firm at the smaller, targeted shows,” Gallagher says.

Any crossover impact on booth or tabletopexhibit revenue appears negligible. DMA doesn’t discount booth space forexhibitors appearing in more than one show. Demand for space is high, so feescan follow suit.

“We keep raising our prices, and they keepcoming back,” Gallagher says. “Everyone says our delegate quality isoutstanding, so the events sell themselves. It’s just not something that wouldmake financial sense for us to do.” 

Competitive sense

Although DMA feels little competition fromwithin, it has plenty of rivals outside the association. New fields, especiallythose involving the Internet, are rife with competitors.

“Our main advantage is that we have amembership base to which we can market,” Gallagher says. “As long as we keepgiving them good programs, we’re okay. But we’re always looking for newspeakers, new ideas and always talking to members to see what they want. In thisbusiness, you have to understand their business and be able to anticipate whatthey’ll need to do it better.”

That strategy appears to be working. This year,the association added three new events and expanded two events on its conferencecalendar — including the Net.Marketing Fall Conference & Exhibition, aspin-off from its spring event; two E-Commerce Customer Care Conferences, whichadded a tabletop component this year; the National Conference on Operations& Fulfillment, which DMA and Intertec bought last year; and the DMA LatinAmerica Confer-ence, an educational conference that attracted 200 delegates toits debut in Miami in June.