June 2004
Best Practices: Revving up revenue

Motor Trend benchmarks enable confidential comparison of 17 auto shows

By Cathy Chatfield-Taylor

Celebrities draw crowds at public shows, but if you’re paying too much for a big shot to sign autographs for a couple of hours, you’re losing money. 

 “I knew the celebrity appearances weren’t working,” says John Marriott, Vice President and General Manager of Motor Trend Auto Shows, a Harrisburg, PA-based subsidiary of Primedia. “But our clients would see people waiting in line to get an autograph, and they thought it was great.”

Marriott calculated ROI for celebrity appearances at each of the shows he managed last year by dividing gate revenue by the appearance fees. Then he ranked the shows by this benchmark and discovered that the ones with the worst financial performance all used celebrity appearances as their main draw. The numbers convinced three shows to try less costly attractions this year, such as vintage Corvette and Mustang displays.

“I realized this was a valuable tool to share best practices among shows, figure out what puts some shows at the top to achieve best-in-class ranking, and what’s going on with shows that are at the bottom,” he says.

Produced in 17 markets from Baltimore to Honolulu, Motor Trend Auto Shows range in size from 100,000 to 500,000 square feet and feature new cars, trucks, minivans and sport-utility vehicles, as well as pre-production models and concept cars. Show management maintains all financial records and, once a year, invites the show owners to a client summit where they review their results. The owners are loath to disclose attendance figures and financials to one another, but the benchmarks allow them to compare their performance without revealing proprietary data.

To produce the benchmarks, Marriott generates a spreadsheet with figures for attendance, gate receipts, sponsor and booth revenue, and expenditures on advertising, public relations and special features such as celebrities for all 17 shows. His ROI calculations produce benchmarks on ticket price vs. household income, feature expense vs. gate revenue, feature expense per attendee, sponsorship revenue per attendee, advertising expense vs. gate revenue, and public relations expense vs. gate revenue.

Marriott ranks all 17 shows by each benchmark. He does not reveal the actual numbers that go into the calculations or the identity of the shows ranked No. 1–17. Each show owner receives a report with their own numbers and rankings. In private meetings, Marriott suggests ways to improve results — for example, pointing to shows with similar demographics that charge more at the gate.

The benchmarks not only convinced three shows to dramatically reduce celebrity appearance budgets but also persuaded several show owners to raise ticket prices.

“We were able to show that our clients were charging $1 less per ticket than three or four other markets with income demographics that were similar to their own,” he says. “That was the catalyst to make them understand that they can raise their prices, which they hadn’t changed in three to five years.”

Another benefit of benchmarking was gaining leverage with newspaper sponsors. “We developed a comparison of what we get in the different markets, to establish a baseline,” Marriott says. “That lets us go to cities with weak support from the newspaper and say, ‘Motor Trend compared what you’re giving me to what they get at other shows, and you guys aren’t up to snuff.’ It changes the dynamic of the conversation.”

At this year’s client summit in June, owners will compare their results with last year’s. Over time, they’ll be able to track performance against their own track record, as well as that of the auto shows in other markets. The better they perform, the more money Motor Trend makes.

“Our clients want to save money, and they want us to participate in those savings,” Marriott says. “It’s the perfect incentive to encourage us to do this kind of thing.”

Cathy Chatfield-Taylor is a freelance writer/ editor. E-mail cathy@cc-tunlimited.com.