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Debating face-to-face

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Growth in the exhibition industry slowed last year according to a March report from the Center for Exhibition Industry Research (CEIR). For the fourth year in a row, the industry experienced a modest boost; however, the 4.8% increase for 2006 was slightly less than the 5.8% growth seen in 2005.

The report found that all four of its measured exhibition industry metrics— revenue, attendees, exhibitors and net square feet—experienced growth.

The largest growth in 2006 was in the area of revenue, which saw a 9.7% boost this year and an overall increase in revenue of 3.6% from 2000, the first year CEIR began indexing industry health.

The number of attendees was the next largest increase, at 4.6%, gaining only about 1.6% from 2000. Net square feet saw a 3.8% gain and had the largest gain overall from 2000, up 3.6%. Finally, the number of exhibitors was up only 1.3%. The exhibitors metric was also in last place for growth, gaining only 1.5% from 2000.

The report combined information from about 300 events nationwide spanning 11 different industries including: professional business services, communications and information technology, and medical and health care. According to the report, growth in each of the industries was responsible for the overall health of the exhibition industry. The most improvements in 2006 were seen by the building and construction industry and the sports and entertainment industry, up 5.4% and 5.3%, respectively.

Steve Waugh, worldwide manager of events at IBM Corp., said the slowed growth of the industry is largely the result of its health. Movement toward more specialized events and away from large, untargeted exhibitions is likely the reason, he said. According to Waugh, more specialized events ultimately have a greater impact and the increased ability to retain and nurture clients and attendees.

Carrie Freeman Parsons, a member of the CEIR board and VP-marketing at Freeman, a company that manages and produces events, was largely positive about the results, despite the field's flat growth. "In general, people feel very positive about the fact that the industry is strong," she said.

However, Parsons said that the growth should not be taken lightly. The results, she said, are "tempered with the knowledge that we can't just assume it's going to stay that way. It's contingent on our continuing to impress that there's money to spend … in face-to-face [marketing]."

Waugh also emphasized the importance of determining the value of live events. "We're measuring return against spend [and] we've gotten more sophisticated," he said. "It's a good thing because what we've found out is we've had great return on events. Even with the downturn of the economy we're still going to meet our customers out on the road. It's a huge vehicle for IBM."

Going forward, Parsons said, she expects the exhibition industry to see continued growth. "We are really encouraged by what we're seeing not just on the trade show floor but in the private event industry as well."

Industry analysts are not quite as positive about the results.

Laura Ramos, a VP at Forrester Research, warned that large trade shows are not proving as effective as in the past. "It's not as intimate," she says. "The drawback to the trade show is that it's kind of overwhelming. … Anecdotally, b-to-b marketers are still interested in events, [however a] higher percentage of b-to-b marketers [found] executive events, intimate breakfast/lunch/dinner events and inside sales/telemarketing [more effective marketing tools]."

Others like IBM are gravitating toward holding more Web-based events. However, Waugh said, they are not replacing in-person meetings. "We're investing more online. There will be an [industry] shift from face-to-face," he said. "This week we have a huge event going on in St. Louis called Partner World, and [although] we have a [companion] Second Life event going on at the same time, it's not a replacement.

According to a recent report by Ramos, "B2B Marketing Needs a Makeover—Now," in which 569 b-to-b marketers were surveyed via e-mail, the events marketing industry is not quite as healthy as CEIR's report makes it appear. The results showed that while 91% of marketers surveyed cited trade shows as a marketing method, only 35% found them highly effective for raising brand awareness and only 27% found them highly effective for generating sales leads.

The real growth, Ramos said, is that those surveyed said they are finding smaller, more intimate settings increasingly more effective. Additionally, she said, only 49% of those surveyed said they will maintain their current spending on trade shows, but will be more selective going forward about which shows they will attend and the size of their investment in those shows. Finally, Ramos said, 24% of those surveyed said they will decrease their spending in the future.

So what can event marketers do to ensure continued growth in the future?

"Realize that trade shows are still very important in b-to-b marketing. It's not a matter of quantity, it's a matter of quality," Ramos said. "It's all about segmentation and positioning. How can you be clearer about who the people are that are going to be attending and are the themes of the event relevant to that particular segment?"

Ramos admitted that there's not much that can be done beyond better planning and strategy before an event begins. "It's less important to have a big event with lots of people than it is to have the right event with the right people," she said.

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