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March 2008
IT Shows Make a Comeback
Show organizers segment and specialize to deliver the high-quality buyers and ROI tech marketers demand
By Maxine Golding
When TechTarget launched in 1999, information technology (IT) shows were flush, and the tech industry seemingly unstoppable. But Co-founder and CEO Greg Strakosch made a bet that IT marketers would demand directly measurable return on investment (ROI) and a much more targeted path to their customers than the broad-based mega-shows were providing. His strategy played right into the seismic shift that was coming.
As the IT exhibition industry took a beating and several brand name shows went bust, TechTarget’s online and event business model grew 40 percent per year from 2001 to 2007. When it launched Storage Decisions in 2001 and delivered 100 percent documented qualified buyers, marketers eagerly pointed their budget dollars in its direction.
TechTarget is part of the explosion in recent years of more vertical, segmented and specialized exhibitions and summits in the IT space. And with good reason: They’re effective. Many companies find that when they exhibit at a vertical show, they come with specific products and specialists to talk, learn and participate within their peer group. The targeting can be much more precise than at a broad-based exposition.
“There’s real interest from major IT companies to segment high-end audiences and spend money on them,” says Melinda Kendall, IDG World Expo’s General Manager for LinuxWorld Conference & Expo and Next Generation Data Center Conference & Expo (www.linuxworld.com and www.ngdcexpo.com).
The IT industry has changed. “Horizontal IT shows were built around something that doesn’t exist anymore,” says Strakosch. “If you look at the IT department in any big corporation, one team worries about storage, another about security, another about the network and another about applications. While all the big vendors play in most markets, the other vendors are specialized.”
In the rah-rah 1990s, high-tech shows recorded a much higher rate of attendees with buying plans (in the 70 percent range) than shows in other industry categories (which averaged in the 50 to 60 percent range), according to benchmarks tracked by Exhibit Surveys Inc. By 2006, 53 percent of IT show attendees arrived with buying plans, compared with 52 percent for attendees at all events. “The tech world is back where the rest of the world is,” says Skip Cox, CEO of Exhibit Surveys (www.exhibitsurveys.com).
That sentiment applies to the remaining horizontal IT shows, where many vendors are taking considerably less exhibit space than they used to. For example, CMP Media’s Interop has grown back to 500 exhibitors covering 150,000 net square feet and 20,000 attendees in 2008. But that’s one-quarter of the floor space it covered in 2001, when 800 exhibitors occupied 600,000 net square feet. And in its revival, it has segmented its broad focus into seven or eight key themes.
Exhibition industry data suggests that IT shows will most likely follow the pattern of health care shows, with few horizontal events and many smaller, vertical events, according to Douglas Ducate, President and CEO of the Center for Exhibition Industry Research (www.ceir.org). “There’s no real need unless it’s a flagship event for an industry,” he says. As he points out, the three largest health care associations — American Medical Association, American Hospital Association and American Nurses Association — have abandoned exhibitions, deferring to their medical specialty groups. Just as cardiologists don’t want to be with family physicians, IT specialists seek to be among their peer groups to learn.
Today, IT shows represent 12.7 percent of all exhibitions, behind health care, the category leader at 23.4 percent, and professional business services at 14.4 percent.
An Uphill Trajectory
It’s been a long recovery for IT shows since 2001, when corporations cut their investment in IT infrastructure post-Y2K, the IT bubble burst, the recession kicked in and 9/11 provided the knock-out punch. CEIR data delineates the steep trough from 2002 through 2004 out of which IT shows have had to climb. This has created a perfect environment for slicing and dicing a marketplace that remains vibrant and innovative, but far more specialized in its applications and much more cautious with investment and valuation than earlier days.
For IT shows that survived the retrenchments and flame-outs, the trajectory to regain their position has been just slightly upward each year since 2003, says Wayne Crawford, Executive Director, NXTcomm (www.nxtcommshow.com). CMP Media, for example, has averaged a more normal 6 percent annual growth in the IT market space over the past four years, compared with the outrageously high growth rates during the IT boom.
IT shows will continue to compete for marketing dollars with proprietary corporate events. However, IT companies know that their customers like to see third-party content and multiple products across categories, as well as prospects beyond their own customers, says Kendall. So, well-positioned, third-party events still play an enormous role, especially since IT developments “overlap like waves hitting the sand. As one peaks, the next one starts. There’s always a new technology that’s rising while others fall to the wayside as markets mature,” she says.
That process of innovation plays into CMP Media’s twopronged philosophy: Identify key verticals making up IT today — like voice over Internet protocol (VoIP), security, mobility and Web 2.0 — and produce the “one organizing event that we believe every industry will have,” says Eric Faurot, Senior Vice President.
For example, CMP Media (www.cmp.com) launched Web 2.0 in 2004 specifically as a summit and not a traditional trade show. For three years, it was an invitation-only event, turning away people each year. Then last year, it was launched as an exhibition, drawing 3,800 paid conference attendees and 140 companies, “the closest we’ve come to launching a horizontal show,” Faurot says. It will grow about 100 percent in 2008, he says, filling a hole left by the demise of Internet World.
Forming Community
Before the advent of the Internet, the annual exhibition and conference used to be the only game in town when buyers and vendors assembled into a community. The online world threatened to change all that, with its capability to quickly establish and foster communities of interest. This was especially worrisome for organizers of IT shows, whose audiences are obviously early adopters of technology.
“We learned the lesson that events weren’t the center of the universe,” says Philip McKay, President and CEO, PPM Media Inc., which launched BladeSystems Insight (www.bladesystemsinsight. com), an invitation-only summit in 2007. Now, show organizers are collaborating with others in their market space to become creators of communities, rather than creators of events. “That’s our mantra,” he says. “We are not an event company; we drive communities.”
This strategy calls for a tight concentration of audience and content, the very model on which Strakosch built TechTarget into a public company with $94.7 million in revenues in 2007. All the peer-to-peer and vendor content seen by millions of visitors on its 49 Web sites is fed by 150 reporters and editors on staff and 300 outside industry experts and consultants.
Conferences can be highly profitable: 40 percent of CMP Media’s $65 million in annual revenues derive from educational content. This has helped drive the company’s 30 percent growth in show metrics from 2006 to 2007. Even conferences with no preset agenda, like Mashup Camp and Startup Camp, can be successful when attendees create the content.
Still, it’s hard for event professionals to come to terms with the sea change in traditional wisdom that despite a successful experience, people will not necessarily return year after year. The shows profiled here know they must work overtime to identify and justify reasons for exhibitors and attendees to come back.
Hitting on the Right Model
The Exposition: TechTarget’s Storage Decisions, with 500 to 600 attendees and 60 to 70 exhibitors covering 10,000 net square feet
Web site: storagedecisions.techtarget.com
Co-founder and CEO: Greg Strakosch
The Hit and Its Aftermath: Just when most IT shows were stopped in their tracks, TechTarget launched Storage Decisions in 2001, after first establishing a targeted Web site for the market space. Vendors loved the efficiency of the online audience and wanted an event like it, says Strakosch, instead of “spending a fortune” on horizontal shows where “99 percent of attendees were not right.” Audiences had the same complaint, according to research that TechTarget had conducted. Content was not specific enough at big shows, and a buyer could network with just one of 100 peers.
Segmentation and Specialization: TechTarget’s IT event strategy of delivering a controlled circulation audience was far different from the norm at the time — the audience has to qualify to attend. For Storage Decisions, that meant director or vice president level, a $1 million storage budget floor (the average is $6 million), responsibility for making storage buying decisions and readiness to make a budget purchase within the next two quarters. Two out of three people don’t qualify, so they can’t come. This enables the show to deliver “100 percent documented buyers,” says Strakosch.
To make the conference content compelling, exhibitors aren’t allowed to speak. However, the show does feature dedicated exhibit hours. Even with exhibit pricing of $40,000 for a 10x10 vs. much lower rates at other shows, Strakosch says there’s a 100 percent renewal rate for the Storage Decisions events. “Exhibitors are willing to pay the premium because the ROI is there,” he says.
What’s Changing: Storage Decisions has grown from one show per year to four: East Coast, Midwest, West Coast and the newest one in Toronto. The regional approach works because different people are buying at different times of the year. And since IT storage encompasses many areas, such as backup, disaster recovery and virtualization, TechTarget began a series of one-day seminars. Now, each of five different topics will be covered in individual seminars in up to 20 cities in the United States and Europe. The seminars, however, do not have as steep a qualification model as the three-day events.
Looking Ahead: Strakosch is proud of TechTarget’s “tremendously unfair advantage”: 6 million registered members and 15 million monthly visitors to 49 Web sites, with at least 10 new Web sites to be launched in 2008. “The main cost of building events is attendee marketing, and our costs are zero,” he says. “We’re able to use that enormous audience to fill seats at our events with qualified people.” He aims to continue to build “great content and search optimization” while subsegmenting more and more, in the Storage Decisions model. “You can’t get more specific than our seminar on e-mail and file archiving,” he says.
A Little Insurance
The Exposition: IDG World Expo’s LinuxWorld Conference & Expo with co-located Next Generation Data Center Conference & Expo
Web site: www.linuxworld.com and www.ngdcexpo.com
General Manager: Melinda Kendall
The Hit and Its Aftermath: Debuting in 1999, LinuxWorld peaked with its spring 2001 show. The 50 percent plunge in spring 2002 was so sharp precisely because the previous show was aberrantly high. The fall show in 2001 saw a 15 percent drop, but only dropped 30 percent in 2002 because it didn’t have as high a crest from which to fall. LinuxWorld began its recovery after bottoming out in 2003. LinuxWorld produced its last East Coast show in 2006, after the large exhibitors said they wanted to support a single show a year, a step that has helped to strengthen the West Coast event.
What’s Changing: LinuxWorld is a fairly specific show, so to broaden its appeal IDG launched and carefully named a co-located show in August 2007. Next Generation Data Center & Expo purposely does not refer to a specific technology, so it can adapt to whatever is new 10 years form now; today the issues are power and storage. About 50 exhibitors took part, and that number is expected to more than double in 2008, says Kendall.
Still, with its focus on open source software and new applications, LinuxWorld grew 10 percent in 2007. Allowing the data professionals who use Linux to experience their peer community and a broader array of products will keep LinuxWorld active and vibrant longer, and extend its growth path, says Kendall. The 2008 show expects 12,000 attendees and 200 exhibitors covering 45,000 net square feet.
Segmentation and Specialization: Positioning a show next to a show limits just how much segmentation LinuxWorld can take. However, it’s consolidating software into one area of the show floor, and each of the two conferences (LinuxWorld and Next Generation) presents seven tracks by technology segment. These will constantly shift and change, based on which product categories are hot. “You would think that someone who specializes in security will hang in that track, but it’s not true,” Kendall says. “We did an analysis and found that people attended two events a year and no more than one-and-a-half sessions in a single track.” They want to be educated across topics and experience the breadth of the show.
Looking Ahead: That’s the big bet, says Kendall. She would have created Next Gen anyway, but LinuxWorld turned out to be the right place to put it. “We want to make sure we’re totally covering virtualization, which is especially hot [in this space] since Linux is so inexpensive. Our growth strategy of going after key topics and focusing on being software-friendly represents a new way to create buzz.” For example, using the Linux operating system in mobile devices is new; consequently, her two biggest accounts are mobilelink customers that the show didn’t have three years ago. And Linux is being embedded in more gadgets and hardware. Support for this area “won’t be profitable this year,” she adds, “but we’re betting on growth.”
It’s Not About Concrete
The Exposition: Ziff-Davis Media’s DigitalLife, which in 2007 drew 54,000 attendees, 2,500-plus media and analysts, and 221 exhibitors covering about 200,000 net square feet in New York City
Web site: www.ziffdavis.com
Vice President-Consumer Marketing: Monica Vila
The Hit and Its Aftermath: Vila, who worked for both Comdex and PC Expo, attributes the cancellation of such mega-shows to two factors. First, customers changed drastically in how they gathered information, so tech shows found themselves competing with a host of platforms that provided a similar service to clients. Second, producers got too focused on concrete. “Here’s a plot of land, we’ll open the doors and let in the people, and you knock yourself out was the thinking,” she says. “IBM pulling out of Comdex became a watershed event. How could the No. 1 tech company afford not to be there?”
Vila has seen market changes push IT shows to:
• Move away from the notion of a concrete-centric purchase. While the actual physical space is important, marketers want to buy promotions and platforms with real impact on customers.
• Package opportunities and enhancements by platform to address specific marketing objectives.
Segmentation and Specialization: When Vila and her team realized growth was going to come from consumer technology, that segment became the focus of their launch in 2003. The show was timed for the biggest buying season of the year in late September, in the biggest market it could reach. Companies, however, needed a great deal of educating since no tech shows were designed exclusively for consumers.
DigitalLife further sliced the show into themes: home theater; the mobile lifestyle; broadband entertainment; gaming; digital families; digital memories; digital culture, commerce and community; and safety and security. The goal is to appeal to many different interests, engage young attendees for the future and keep consumers from letting the complexity of technology deter them from buying products.
Still, she admits, there may be five better ways for companies to reach 50,000 consumers than at a show. However, it’s the mix of the right time, place and surrounding exhibitors that makes the business case for companies to participate.
What’s Changing: The show is taking a laser approach to exhibitors, even companies in a 10x10 space. “That’s how marketers are buying,” Vila says. “If you’re selling $100,000 of space, they expect some customization and metrics on their return on investment. We have a joint stake in the results.” But it’s very time-consuming. “My mentor, Bob Krakoff, would be horrified to learn that I was working just one show a year.”
Expectation of margins isn’t quite as exponential as it used to be, and growth for DigitalLife is in the more normal teens. Still, the show is expensive to run, with celebrities and experiences for consumers to enjoy.
Looking Ahead: There’s no way for Vila to put this lightly: The cost of doing business in New York is one of the biggest threats for a tech show. “Everything is much more expensive than 99 percent of all other places. It’s not just our show paying the costs, but all the exhibitors,” she says. Show management works all its vendors to control costs, but in the end, everything about New York remains costly.
Growing a Tiny Slice
The Exposition: PPM Media’s BladeSystems Insight, with 200 attendees and 50 vendors
Web site: bladesystemsinsight.com
President and CEO: Philip McKay
The Hit and Its Aftermath: New technologies not only create new investment cycles, they also foster opportunities for meetings. Witness blade technology, which promises to improve server management and cut costs. According to McKay, this market segment is expanding into more technologies across such markets as energy, pharmaceuticals and health care. That’s why he chose it as the focal point for PPM Media’s first launch last year.
As Senior Vice President, International Business Development, at Key3Media in 2001, McKay had a front-row seat watching big shows like Comdex disappear “in months,” and others become shadows of their former selves or drop almost to extinction. “As event organizers, we had a black cloud over our head because we didn’t produce what we said we would produce,” McKay says. “No events would be around if we didn’t change.”
That’s why numerous IT events in vertical markets like health care, government, finance and manufacturing are coming back, but targeting smaller slices. “As long as you back the event with good content, the audience will get more return on investment and vendors will see the right people,” he says.
Segmentation and Specialization: After taking a summit approach to the 2007 launch, PPM Media will see BladeSystems Insight grow 300 percent in revenue and 100 percent in vendor participation in 2008. The model delivers case study content and access to high-level decision makers. Attendees are handpicked, and 200 are hosted at the event, which provides them with a “participation package” that includes airfare and accommodations. The show floor “meeting zone” is set up for one-on-one meetings, a format that takes out the guesswork for both attendee and vendor. “It’s very network-intensive,” McKay says.
What’s Changing: This model is a real switch from earlier days of IT shows, when talking heads and vendors paying for speaking slots proliferated. Speakers are end-users, and if vendors speak at all, they’re part of a panel to discuss a controversial subject. To burnish its credentials, the event has garnered endorsements from industry associations for and related to blade systems technology.
Since it has become essential to keep participants engaged beyond two-and-a-half days once a year, PPM Media uses online social networking to build community and provide tools that enable participants to engage in year-round interaction. “As tech show organizers, we long embraced the concept of online networking, and it has come easier to us,” says McKay. “Now, reaching out to existing online groups in the blade server space, like HP Blade Connect Online Community and the Blade.org association, really enhances our events,” he says.
McKay has clearly learned the lesson from predecessors that shows must bring qualified attendees to their events. “As builders of communities, I think we’re smarter and much more careful about which events we launch,” he says.
Maxine Golding is an award-winning writer and editor with more than 25 years of experience in the meetings, expositions and hospitality industry.
The space in which NXTcomm operates is filled with narrow niche shows. So this is one horizontal show bucking the trend of segmentation and specialization, says Wayne Crawford, Executive Director.
The convergence of voice, video and data technologies over broadband networks is fueling innovation and broadening a marketplace once served by SUPERCOMM.
In 2008, its second year, NXTcomm (www.nxtcommshow.com) expects 20,000 attendees (attendance will be audited) and 500 companies covering 220,000 net square feet of exhibition space.
The downside of the horizontal model is that “we have to compete and provide value on a lot of different fronts,” he says. So NXTcomm is forming partnerships and alliances with industry associations, publications and consultants within segments to make its education relevant, compelling and focused, and for help with marketing, messaging and special event features. And since the broadband network is nothing without something to move across it, NXTcomm is launching a content pavilion at the 2008 show.
Still, the industry NXTcomm serves is changing so rapidly, it’s hard for the show – and the companies selling product in niches — to define the segments within it. Show management is equally challenged to establish the new NXTcomm brand. Still, Crawford says, there’s power in being “the entire ecosystem and meeting place for the industry for one week.”
He reflects on his experiences at large horizontal shows like International CES, which “lost big niches – the revolt of the gaming segment seemingly came overnight,” Crawford says. “But CES was able to recover from that and continue to grow.”
However, “a show like the all-purpose Comdex collapsed on itself when computing became a commodity, niche shows took market share, and everything was overvalued,” he says. “But you can’t blame anyone for riding that wave.”
Social Networking Feeds F2F
Ten and even five years ago, marketing experts predicted that face-to-face was on the road to extinction, to be replaced by online connectivity. It turned out to be no contest.
There still is no substitute for face-to-face interaction. However, smart organizers are embracing Web 2.0 tools like online social networking to augment and enhance live connections and nurture their audience, rather than seeing the activities as competitive.
“Social networking has driven our business,” says Eric Faurot, Senior Vice President for CMP Media. “People connect online and appreciate if we provide a viable reason to connect in person. For the Enterprise 2.0 show, we built a Facebook group and within the first week 200 people had joined the network to talk about the event. It’s extremely powerful marketing.”
LinuxWorld Conference & Expo has set up groups on LinkedIn and Facebook. “We decided to have pages on these basic aggregators of information that point back to where we actually want people to go,” says Melinda Kendall, General Manager. Her show also has started experimenting with social networks through vendor BDMetrics and the Ning platform, an online service to create, customize and share a social network. “We believe the way to do it is to build social networking within the Web site people are used to coming to,” she says. All constituents – exhibitors, attendees, speakers and show producer – will be able to interact and share their interests.
The growing popularity of social networking is pressuring events to deliver great content, high quality, exclusivity and timeliness. “If you can network online, that takes away one reason to go to an event,” says TechTarget’s President and CEO Greg Strakosch. “So the event will be judged more on content, and it has to be really good.”
Social networking is also a powerful way to get the word out, says Monica Vila, Vice President-Consumer Marketing for Ziff Davis Media’s DigitalLife. She has used it to post news and buzz about the show and for marketing purposes, rather than as a community exchange. But a show like hers that reflects innovation will have to go that route. “We may be heading into ‘The DigitalLife network reviews and recommends products.’ It’s certainly something for us to consider,” she says |
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