^{July/August 2003}

At an EXPO Roundtable, five top executives from leading show management companies reveal which industries have been hit the hardest by corporate events and what it might mean for your show

What’s the hottest show in town? This year, the answer might be corporate events. Tough economic times have forced corporate marketing professionals to scrutinize their budgets and focus their priorities on maximizing sales of their company’s products and services. For many companies, this has led to an increasing importance in their own events.

“Private events are the No. 1 issue for us in technical shows. Prospective exhibitors claim they have more success at their own events than trade shows in general,” said Jill Birkett, Vice President and General Partner, Unicomm, an independent show organizer based in Milford, CT, at the Exhibition and Convention Executives Forum, held in May in Washington, DC. “In this market, exhibitors are not devoting money to acquiring new customers, instead they’re investing in existing customers at their own private events.”

In fact, 41 percent of marketing professionals are increasing their budgets for customer care in 2003. At the same time, 40 percent are decreasing their budgets for outside event marketing, according to Marketing in Tough Times, a survey of 108 marketing professionals, conducted by Carat Business and Technology Group in April (see sidebar for survey highlights).

“Every one of our clients produces their own events, and they are the most important events they do now,” says Dan Belmont, President of Carat Business and Technology Group, a media agency that provides event strategy, selection and measurement services for about 40 clients, including Microsoft and HP. “The market dynamics have changed, shifting their event strategies for now,” says Belmont. His clients spend about 25 percent of their overall marketing budget on private events. This year, some spent as much as 50 percent.

It’s not surprising that more money and time would be devoted to maintaining and selling deeper into current accounts. Acquiring new customers is more expensive, and there’s a longer sales cycle. Corporate events allow marketers to learn more about their customers in a controlled environment. And more importantly now, companies are using these events to foster customer relationships.

Private events may not be gaining momentum in your industry yet, but they are on the rise in a number of industries. From IT and food service to retail and film, corporate events are gaining a bigger share of marketing budgets and competing for attendees’ time and attention.

This month, EXPO assembled a roundtable of five top executives from leading show management companies to find out how we can compete and gain back lost ground. Editor Danica Vasos and Publisher Donna Sanford asked them about how their companies are reacting and how the industry should be responding to this trend. They reveal which industries have been hit the hardest by corporate events and what it might mean for your show.

In addition, EXPO presents some new research on corporate events. Find out how exhibitors and attendees rate private events and how exhibitor’s marketing needs have shifted during this market downturn.

EXPO: Are your exhibitors producing more corporate events? Which industries have been hit the hardest by corporate shows?
John: It’s an issue for us in the film sector. There’s been consolidation in the industry among movie theater operators who are attendees at ShowWest. Film companies are producing their own shows and flying in cinema operators. But film companies are still purchasing sponsorships at our events. For most of the other markets we serve, it’s not an issue.
Darrel: At the end of the 3rd quarter 2002, road shows were not on our radar screen. In 2003, we are producing a number of road shows for Microsoft, representing $2 million in revenue. Road shows can work for highly targeted groups. These companies want to control the atmosphere at the show, but they don’t always have the resources to attract attendees. For trade shows, pre-registrations run anywhere from 40 percent to 70 percent. For road shows, the number is only 12 percent. You have to change the model for getting attendees to these road shows. You have to do more marketing, and you have to reward attendees to get them to the show.
Nancy: Distributor shows compete directly with our seafood shows and our foodservice show. Distributors mandate that manufacturers whose lines they carry exhibit in their shows. This has always been a problem for us, but it doesn’t appear to be growing. About 20 percent of exhibitors and 10 percent of our attendees at our seafood shows participate in distributor shows. At distributor shows, manufacturers can only display the product lines that the distributor carries. They can’t show new products, which is a selling point for our events when selling against distributor shows.
Kerry: For our tech shows, there are two very different trends happening. Some of the tech companies are adding more private events. They are re-allocating trade show marketing dollars to corporate exhibitions, user group events and road shows. But there are some who are taking another look at shows. For example, one large software company has experienced a major decline in attendance at its private event — from 20,000 attendees to 2,000. So that company is starting to participate in trade shows again. We’re also selling exhibitors co-location packages where they can co-locate their events with our shows, and we perform show management functions for them. And we’re having some success. For example, in the digital printing market we sold a co-location package to a major company that held its event during our show. We handle the sales, registration and management of their event. In addition, they’re an exhibitor and major sponsor of our show.

EXPO: How did you get the exhibitor to hold its private event with yours?
Kerry: They were an existing customer. They were considering holding the event at a different venue. So we talked to them to find out their needs, and we offered them an integrated marketing services and event co-location package. They were planning to conduct product launches, as well as customer, channel and media briefings for all product divisions. Although the product group that participates in our event was but one of those divisions, they saw the value of participating in a larger event. The main elements of the package we sold them included booth space to the division that typically participated in our show, along with a principal sponsorship. In addition, we sold them a management services package to provide advertising and marketing for their co-located corporate event, meeting planning, operations, and marketing services management, as well as a lease for the space they utilized in the exhibition center for their event. They independently promoted and marketed their event, mentioning that it was co-located with ours and, in addition, we co-promoted their event and provided cross-over attendance rights into our show to their attendees. This generated 2,500 cross-over visitors to our event.

EXPO: How did private events gain a foothold?
Jason: We draw product managers to our trade shows, while corporate shows draw VPs of sales. Did we leave a gap and do we want to serve this audience? IBM produces 350 corporate events. Do we want to be part of this world? Do we want to get into bed with our customers? We may need a new strategy. We may need to play in all worlds — do a few corporate shows and a few trade shows. It could open some new markets and new revenue streams.

EXPO: How can show organizers capitalize on this trend?
Darrell: We used to focus on creating efficiencies. Now we’re focusing on new solutions for exhibitors.
Kerry: If we’re listening to our customers, we should be doing private events — or anything else that our customers want. In the past, our own business model has prevented us from doing that. We need to ask ourselves: “Is there a way to be proactive?” Every sale is meaningful. Now we’re examining the “nos” to find out why they aren’t participating. We didn’t use to do that.
Darrell: We need to know our core assets and exploit them. Ask your staff and exhibitors: “If you could do anything with our assets, what would you do?” This has led to a success story for us. Among the things we have done, all within the last nine months:
• We’re producing road shows for six different segments of the IT sector, which are sponsored by various manufacturers. We only started doing this in the fourth quarter of 2002.
• We have a proposal under consideration for one of the largest specialty retail
chains in the natural foods sector to produce a custom magazine and a series of
consumer education-focused events.
• We recently produced our first company-sponsored e-book, released in multiple
chapters as a way to educate and drive qualified leads to the sponsor.
Increasingly, our customers want creative solutions with a custom or semi-custom
flavor. So, we’ve got be more agnostic about what channels we use and more open to
new possibilities.

EXPO: What are our core assets?
Jason: We’re not a trade show company. We’re a database company. What can we create with our databases?
Darrell: “I agree. Really, we are database companies. We are grouped into media because we use those databases to produce events, publish magazines and newsletters, and develop online offerings. As a database company, what else can we do to match buyers and sellers?”
Kerry: There are lots of practices from publishing that we could apply to trade shows. For example, on the magazine side, our staff has eight contacts a week with readers. Then our sales reps use that data when making calls.
Jason: There have always been corporate events. One new thing is that more event production companies are running the events. And some of these companies are recommending that their customers don’t participate in trade shows.
Nancy: Our core asset is our ability to bring buyers and sellers together for mutual advantage. Our marketplaces have the ability to deliver the
universe and are not limited by a proprietary scope.

EXPO: Should show organizers be in the private event business?
John: Yes, if you define your role as a show organizer in terms of serving the needs of your market and a clear demand for private events exists.
Darrell: That depends — Do you want to be a publisher or a custom publisher or both? I think you have to look at the ratios, performance and spending to determine if it’s the right business for you.

Danica Vasos is Editor of EXPO. She can be reached at 913-344-1303 or e-mail: dvasos@ascendmedia.com.
 

“Branding is dead for now,” Dan Belmont, President of Carat Business and Technology Group, told attendees at the Exhibition and Convention Executives Forum (ECEF), held May 22 in Washington, DC. Carat Face-to-Face is a media agency that provides event strategy, selection and measurement services for about 40 clients, including Microsoft and HP. “Two-thirds of marketing professionals say that delivering sales leads is the most important marketing priority.”

That’s good news for shows, right? Wrong. Direct marketing — a combination of e-mail, online, and other response-oriented media — delivers the most leads, says Belmont. “Companies aren’t perceiving trade shows as maximizing lead generation efforts — at least today,” he says. “At the same time, they see corporate events as important customer relationship management tools. The number of corporate events is increasing, but it will probably stabilize once the economy stabilizes.”

At ECEF, Belmont presented Marketing in Tough Times, a survey of
marketing professionals — comprised of 60 percent IT companies and 40 percent other business-to-business companies, compiled in April 2003. Among the key findings:
Budgets
• 31 percent have a 12-month budget but can commit funds only for
the next quarter
• 25 percent say their budgets are revised quarterly, monthly or
almost constantly
• After devastating budget reductions in 2002, only 15 percent say budgets are going up in 2003. 23 percent will remain the same, one-third will be reduced by another 29 percent, 15 percent will be reduced by 30-49 percent, 8 percent will be cut by half.
Job responsibility
• One-third have assumed responsibility for all media disciplines used
in marketing — which means show organizers and booth salespeople
are probably dealing with new contacts who may not be knowledgeable about shows.
• 83 percent of those whose primary job is events also are responsible
for media.
Lead generation
• 80 percent say the most important metric for their business is the
number of leads generated.
• 60 percent are trying to justify their spending by tracking leads
generated through the sale.
For more information about the survey, contact Belmont at (617) 303-3000, or e-mail:dbelmont@carat-na.com.


When it comes to event marketing and speaker placement, where could you use the most assistance?

37% Choosing the best events to reach our audience
29% Securing quality speaker engagements/opportunities
for our executives
28% Measuring our return on event participation spending
20% We don’t need any help in this area
19% Choosing the best events to generate sales leads
19% Deciding on level of our participation in events
17% Does not apply to me or my area of responsibility
16% Analyzing and creating custom events
6% Does not apply to my company
1% Other

Not an easy choice. Exhibitors are asking for help when it comes to choosing the best events for their audience. What can show organizers do facilitate the decision-making process.

Event marketing budgets take a big hit in 2003. 40% of marketing professionals report their event marketing budgets are decreasing in 2003. Print advertising is the only other marketing vehicle taking a bigger hit — with 44% of respondents reporting a decrease

Corporate events are a priority over trade shows. 26 percent of marketing professionals place the highest priority for spending on creating custom single-sponsored events, compared with 11 percent placing the highest priority on attendance at industry trade shows and 14 percent placing the highest priority on attendance at technology trade shows.