July/August 2003
Is the tradeshow model broken?
How Seybold and other shows are reinventing the face-to-face marketing medium
By Cathy Chatfield-Taylor
The cult-like community surrounding Seybold Seminars is in for a shock. When devotees of the publishing technology chronicle make their annual pilgrimage to Seybold San Francisco, Sept. 8–12 at the Moscone Center West, the bustling trade show that spanned two exhibit halls last year will be gone.
In it’s place will be a single pavilion showcasing products in nine new “content channels.” “ROI is the buzzword everyone is talking about,” says James Smith, Vice President and General Manger of Seybold Seminars, Publications & Consulting, Los Angeles-based division of Medialive International Inc., formerly Key3Media. “Our goal was to raise ROI by lowering exhibitors’ investment.”
To do that, he tore apart the traditional trade show model, where exhibitors bought space at $52 per square foot, and rebuilt it as a turnkey pavilion. The lowest price point for entry: $7,000.
“People don’t bring their booths, they don’t spend money on I&D, and they don’t spend money on labor,” Smith says. “They get a turnkey solution based on their level of sponsorship. They ship their product. They ship their people, and that’s it.”
THE TREND
The industry is abuzz with talk of a new business model for trade shows. At the Society of Independent Show Organizers CEO Summit, held April 13-16 in Las Colinas, TX, an impromptu show of hands indicated a 50-50 split between those who believe the trade show model is not broken — just damaged by tough times — and those who think there is or needs to be a fundamental paradigm shift in the industry.
The basic principles for a successful exhibition are not in dispute: Buyers meet sellers to exchange information and build relationships. At question is whether the show floor is the best place for that to happen. How can shows deliver more value and a measurable return on investment for all participants?
At the Exhibition and Convention Executives Forum, held May 22 in Washington, DC, Skip Cox, President of Exhibit Surveys, Red Bank, NJ, suggested it was time to “reinvent the exhibition.” A traditional exhibition generates 70 percent of its revenue from exhibit space rental. But in the face of changing market dynamics — mergers and acquisitions, downsizing and changing distribution channels, to name a few — exhibitors may need other ways to participate.
“For some, they may simply want to maintain their full presence on the show floor, but expect other opportunities for exposure as part of their investment,” Cox says. “For others, they may want to reduce or eliminate their presence on the show floor and create their own alternative presence.”
If organizers don’t provide these opportunities, renegade companies will create their own, effectively luring attendees away from the show. In fact, nearly half of companies that exhibit also produce one or more private events, according to research conducted by Exhibit Surveys for the Center for Exhibition Industry Research. More than 70 percent of exhibition attendees also attend an average of 3.3 private events each year (see our story on page 36 for more on private events).
Under increasing pressure at work, attendees have less time than ever to travel to multi-day events to educate themselves about new products and industry trends. They can simply tune in to other channels for that information — from the Internet to their local sales representatives.
“The challenging economy has made time out of the office an even bigger concern for attendees,” says Philip McKay, Vice President and General Manager of Gartner Vision Events, Bedford, NH. “They have to demonstrate that time spent at your event will surpass in value the time spent at their office.”
What is needed in these rapidly changing times is a flexible trade show model that can be molded to the needs of both exhibitors and attendees. Exhibitions that have successfully broken the mold share four common characteristics:
• Multiple vertical market niches,
• High-quality unbiased content,
• Brand loyalty and
• Local delivery.
By bringing content-rich vertical shows to a small-but-loyal following in local and regional markets, organizers are demonstrating that exhibit space sales is not the only way to generate revenue — and profits — for trade shows. Moreover, their growth during a down economy indicates they deliver the value and ROI both attendees and exhibitors demand.
CASE STUDY: Turnkey pavilion at Seybold
When Smith broke the Seybold San Francisco mold, he didn’t just dismantle the trade show, he also introduced a series of two-day vertical events in regional markets worldwide, beginning with Seybold Seminars Amsterdam 2003 — PDF Summit, held June 11–13 at the RAI Centre in Amsterdam, Netherlands.
“This model was the easiest decision we had to make because we knew it was about the content,” he says. “For shows that have a niche community that’s after content and they have a big product base built around that, it’s perfect.”
Before rolling out the new model, Smith’s team met with customers and talked to Seybold Report fans to find out what they wanted. A formal survey through Key3Media’s research group, along with impromptu surveys by Seybold’s marketing group, revealed two things: Exhibitors wanted a higher ROI and lower investment, and attendees wanted to compare more products in specific market segments.
Financial modeling indicated that Seybold could generate as much, if not more, revenue by eliminating high-cost exhibit floor space, offering pavilion participation as a turnkey package and expanding the conference content. Restructuring the event around nine content channels opened the door to nine vertical events, if not annually then at least in synch with new product launches. The PDF Summit, for example, drew more than 300 attendees and nearly 30 corporate, media and association sponsors to the debut of Adobe Acrobat 6.0.
Seybold plans at least two more channel events in 2003, dates and locations to be announced. Will these regional shows compete with the mega event in San Francisco?
“That’s one of the things we absolutely had to consider,” Smith says. “You can get the one specific channel in your local area, but to get the overall play, and the other channels that go hand in hand, you have to come to San Francisco.”
Smith expects between 22,000 and 25,000 people to attend Seybold San Francisco this year, compared with 18,065 last year. The conference will offer 146 sessions and 43 tutorials, up from 63 sessions and 26 tutorials in 2002. And although the exhibit floor is gone, he’s forecasting 15 to 20 percent more exhibiting companies, up from 148 last year.
“Most people are happy they don’t have to ship the booth,” he says. “They can show their products and have attendees with reputable demographics, and they can be there for a lower overall cost and a lot less work.”
For the dozen or so exhibitors who don’t want to leave their booths behind, there’s been some placating to do. “This year we’ll be liberal on the rules,” Smith says. “But there’s no I&D and no shipping big pieces.”
By limiting exhibitors to turnkey pavilion space, some say Seybold is walking away from the money to be made on a show floor. Smith argues that they’re just making money in a different way. “We’re drawing it in through the content side. We’ve got new conferences tapping new vertical markets that we’ve never been in before. That’s new people.”
Seybold brings the whole community together online at www.Seybold365.com, where strategic partners in five areas — education, media, content, consulting and user-groups — will deliver content for each channel. With its brand equity in seminars, publications and consulting, Seybold intends to be “all over the channels” and drive event marketing through this content community.
CASE STUDY: Boardroom presentations at Vision Events
At a Gartner Vision Event, where the buyer-seller ratio is as low as 1:1 and rarely more than 2:1, the exhibits don’t get much traffic. The action is in the boardrooms, where vendors have 15 minutes each to dazzle select groups of 15 to 25 attendees. If they succeed, they’ll get a one-on-one, where the real business gets done.
“We listened to the marketplace and heard the objections and criticisms of the standard event model,” says McKay with Gartner. “What the exhibitor and attendee are really looking for is a long-term relationship and partnership.”
The Vision Event model replaces the traditional trade show floor with boardroom appointments, scheduled one-on-one meetings, networking events and educational sessions, all designed to bring together buyers and sellers in aligned product categories.
Vision Event organizers hand pick 100 to 400 qualified buyers (see related sidebar) and invite them to be their guests. Asked if transportation and lodging are complimentary, McKay is circumspect. “Hosting means a variety of things,” he says. “First, we qualify them, make sure they’re the top dog in their business, and then we bring them to the event.”
Once there, they’ll sit in on up to 10 boardrooms and mingle with 100 to 200 vendors. Vendors, in turn, purchase boardroom appointments starting at $15,000 each. To gain access to 100 buyers, for example, one vendor may buy four to six boardrooms.
With that package comes concierge-level treatment. Every boardroom is staffed by a Vision Event leader whose job it is to take care of participants’ needs. In addition, participation packets, Webinar training and orientation sessions prepare vendors to put pizzazz into their presentations and get contracts signed during one-on-ones.
Launched in 1987 with RetailVision, there are now eight Vision Events covering information technology for consumers, business and government held twice a year in luxury hotels and resorts in the United States and Europe. McKay tweaks the Vision Event formula in response to feedback from participants before, during and after each event.
“Right now, every dollar is scrutinized on the attendee side. It’s their time, and if you don’t fill their time with things they can take home and immediately work on, their boss is going to say, ‘You’re just going on a boondoggle.’”
The latest change to the formula is “industry insight,” where executives are invited to attend briefings by Gartner analysts on topics with direct application to their businesses. Leveraging Gartner research content, and the Gartner brand, gives the Vision Events more “clout” in a crowded market. That might explain why Vision Events are growing when the IT industry is not.
“You can’t confuse loyalty with the relevance of the event,” McKay says. “A customer is loyal to your brand because it’s relevant to his or her business goals, not because they like you or it’s in Las Vegas. It’s because they have to do business. When relevance goes away, the loyalty goes away.”
By next year, there will be six new Vision Events in vertical markets such as healthcare, finance and manufacturing. And although there will be a total of 28 to 30 events held worldwide, they won’t be any bigger.
“We don’t have to be the biggest to be No. 1,” McKay says. Besides, big events lose their intimacy, and “we try to make this a love fest.”
The profit margin for the matchmaker? Fifty percent is standard.
CASE STUDY: Sponsored symposia at Pri-Med
When the Pri-Med Conference & Exhibition launched nine years ago, national medical associations for primary care physicians attracted less than 15 percent of their members to annual meetings. The rest were too overworked to take a week off for continuing medical education (CME). Now five regional Pri-Meds bring a Harvard Medical School-caliber curriculum to nearly 30,000 doctors each year.
“We didn’t displace market space as much as meet an unfulfilled need,” says John Mooney, Chief Executive of M|C Communications LLC, Boston.
Granted, there’s nothing new about a regional trade show model. But its spin-off events are something else entirely. Pri-Med added pharmaceutical company-sponsored symposia to its agenda in the late ’90s, creating a significant new revenue stream. The symposia have been so successful, Mooney has launched them into 30 U.S. cities as twice-yearly, two-day accredited programs, free to physicians and paid for by sponsors.
Pri-Med Update models the one-off symposia run by pharmaceutical companies in various cities. But instead of bringing in 75 to 150 doctors for dinner and 1.5 CME credits, Updates bring 550 doctors in for two days and 16 CME credits. A soft launch of the concept in eight cities got enthusiastic support from sponsors in 2001.
“We made it much more efficient for pharmaceutical companies to reach doctors,” Mooney says. “What they paid to get 150 doctors in a room, we’re getting 550 doctors in a room, and we’re doing it for less money.”
In exchange for providing an “unrestricted educational grant,” sponsors get category exclusivity. At a Pri-Med Update, there’s only one talk on each condition treatable with a sponsor’s product. But because the symposia pass strict accreditation standards, the independently developed content covers multiple treatment approaches.
“Doctors will only come back if they got an education that they thought was useful to them and made them better doctors,” Mooney says. “To do that, you have to fall under the umbrella of fair and unbiased.”
To reach the doctors in the local markets, the Partnership Marketing department builds relationships with leading medical institutions in 35 cities. The managed care organizations, hospitals, and local medical association chapters invite area doctors to attend Pri-Med events for complimentary CME credits.
“We leverage their brand and affinity with their physicians to promote our meeting,” Mooney says. “Our partners get to exhibit at our meetings, as well as give something of real value to their practitioners.”
Other professions with mandatory continuing education can learn from the success of the sponsored symposia model. The benefit to attendees is significant. Instead of paying for credit hours at an association meeting — which averages about $200 per day in the primary care field — they get free tuition and are only out of the office for two days. Plus, they can talk directly with sales representatives at tabletop exhibits.
Without an attendee revenue stream, Pri-Med profit margins are admittedly slimmer than association show margins. Growth will come in new vertical markets, such as psychiatry and pharmacy. In 2004, Psychiatry Updates will be offered in six cities, and Pharm-Med Updates will be in eight cities. Mooney expects this expansion, combined with 5 to 10 percent growth of existing events, to grow gross revenue by 30 percent.
Cathy Chatfield-Taylor is a freelance writer/editor based in Overland Park, KS. E-mail cathy@cc-tunlimited.com.
“You can’t confuse loyalty with the relevance of the event. A customer is loyal to your brand because it’s relevant to his or her business goals, not because they like you or it’s in Las Vegas. When relevance goes away, the loyalty goes away.”
– Philip McKay, Vice President and General Manager of Gartner Vision Events
“We made it much more efficient for pharmaceutical companies to reach doctors. What they paid to get 150 doctors in a room, we’re getting 550 doctors in a room, and we’re doing it for less money.”
– John Mooney, Chief Executive of M|C Communications LLC
An unconventional trade show calls for an unconventional approach to marketing.
“We hand-pick our attendees,” says Philip McKay, Vice President and General Manager of Gartner Vision Events, Bedford, NH. “We ask them who they want to see. Then we can go back to the vendor and say, ‘The CIO of the company that spends $10 million a year on IT wants to see you.’”
McKay’s team contacts attendees at least 10 times before each event by e-mail, phone or face-to-face. Although labor intensive, the approach works, especially when they make a high-level match.
Follow McKay’s lead in one-to-one, relationship marketing:
1. Don’t buy lists. Do your own industry-specific market research to identify companies with purchasing power.
2. Target decision-makers. Only invite individuals who can green light a purchase.
3. Personalize the invitation. Approach each person with a personal letter, phone call and e-mail.
4. Customize the message. Tailor your pitch. Tell them how your event will solve their problems.
5. Play matchmaker. Find out which vendors your buyers want to see and make sure they’re there.
6. Prepare them to buy. Provide a participation packet on how to use the event to evaluate products.
7. Attend your own event. Let your top-level buyers see the top-level person running the show.
8. Promote togetherness. Schedule joint activities for attendees and vendors morning, noon and night.
9. Round up no-shows. If attendees miss a meeting, go find them.
10. Don’t invite them back. Exposes the vendor to more prospects by promoting attendee turnover.
How your show can stay relevant
To stay relevant, trade shows will need to adapt to a rapidly changing marketplace, deliver measurable ROI and prove their value at all levels.
Here’s how:
• Partner with your participants. The major players in the marketplace are tapped in to the trends that will impact your industry. Let them help guide your show in new directions.
• Focus on vertical market niches. The best potential for attendee and exhibitor growth lies in the market segments where there is new product development. Be the best channel for attendees to learn about these innovations.
• Offer a unique value proposition. Customers will stay loyal to your brand as long as it’s relevant to their business goals.
• Find alternative ways for vendors to participate. Customize your approach to vendors. Listen to their complaints and find a solution.
• Put a premium on premium service. The best events are more influential and memorable than any other sales and marketing platform. Make it a positive experience, and they’ll be back.
• Keep an open mind to change. No matter how successful your business model is, be prepared to change it at a moment’s notice.
To learn more, read the White Papers, “Basic Principles for the Successful Exhibition or Convention of the Future from the Perspective of Attendees and Exhibitors,” and “Growing Your Event in a Rapidly Changing Business Environment,” by Skip Cox, President, Exhibit Surveys Inc., Red Bank, NJ, available online at www.exhibitsurveys.com.
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