What worries many observers is the sense that the exhibition business may never bounce back.
'They're still bazaars'
"Trade shows simply are so 'first half of the 20th century'; they're still bazaars," said Gary Slack, chairman-CEO of Chicago-based marketing agency Slack Barshinger. Slack raised eyebrows at the industry's annual conference last month in Chicago when he said that trade shows were in danger of no longer being a primary marketing vehicle. Slack said the industry needs more innovation, more standardization and an auditing feature, such as exist in other marketing media.
His remarks were not well received in all corners. "He was looking for sensationalism," said LaNay Kitzing, VP-director of integrated programs at Chicago-based Live Marketing. At the same time, Kitzing agreed that trade shows need to be audited and that many exhibitors don't get out of shows what they should. She said exhibitors fail to effectively integrate their trade show marketing with their sales efforts.
"Eighty-six percent of trade show attendees have not been called on by a salesperson in the past year," Kitzing said.
More upbeat was Jim Rutherford, exec VP and head of investment banking at Veronis Suhler. "Trade shows have held up pretty well," he said. "With some shows happening just once a year, you know your customer is going to be there, and you don't want to lose valuable space in tough times. Exhibitors are also reluctant to cut back from trade shows rather than print, which is pure ad dollars."
Trade show industry summit
Still, the belief that the exhibition business needs a major overhaul prompted the International Association for Exhibition Management to host an unprecedented industry summit on July 26. The meeting, which followed an IAEM show in Chicago, addressed issues facing the business and attempted to identify ways to improve the way exhibitors view trade shows in the face of falling attendance.
"This is an industry that is not accustomed to contraction," said Steve Hacker, president of the IAEM. Veronis Suhler's report notes "the 1.4% downturn in expo space rented in 2001 marked the first reported decline in over 10 years." However, the report does expect spending to grow at a compound annual rate of 4.6% through 2006, reaching $10 billion by that year.
The summit was open to all interested parties, and IAEM invited officials from all facets of the industry, including conference organizers, exhibitors and labor represent-atives. It resulted in a 10-page manifesto of issues that need to be addressed by the industry See Manifesto, this page
. Some observers think large trade shows are doomed.
Alan Meckler, the entrepreneur who founded and sold the Internet World shows, says "the day of the horizontal trade show is over."
Meckler, now chairman-CEO of Jupitermedia, formerly INT Media Group, operates small and tightly focused technology trade shows that grow out of online communities and seminars. In June, Meckler purchased the remaining research and events businesses from research firm Jupiter Media Metrix.
Despite the severe downturn in the technology business, Jupitermedia expects strong growth and profits. While it lost $182,000 on sales of $9.9 million in this year's second quarter, that compared to a $14.7 million loss on sales of $10.8 million a year earlier. The company's results were buoyed by a nearly 60% jump in events revenue.
Meanwhile, Key3Media, which runs giant technology shows such as Comdex and Networld/Interop, was delisted from the New York Stock Exchange, with its shares trading at 4 cents.
"They're toast. They're headed to the reorganization pool," said Robert Crosland, managing director of AdMedia Partners Inc. He said the company's shows weren't in danger, but its debt burden had to be addressed. Key3 claims a debt load of $390 million.
In fact, Fredric D. Rosen, Chairman-CEO Key3 Media, essentially agreed with this assessment.
"Comdex will not go away. Interop will not go away. Seybold will not go away," Rosen said.
While these brands are going through downsizing, he said, "they will rebound. "We have the best brands," Rosen said. "In the end, brands always win. If Comdex and Interop didn't exist, someone would have to invent them. And nobody else is trying to invent them right now."
But Meckler believes the only way a technology show can be large today is if it's associated with an association. "We're seeing this at a number of shows. The CTIA and NAB shows are thriving, but they are [sponsored by] associations,"Meckler said.
What's happening with technology trade shows is similar to the situation faced by trade shows in general.
"Marketers are demanding better ROI and a clearer understanding of the value they get," said Gary Bolles, founder of Conferenza.com, which follows the technology trade show business.
Bolles noted that online seminars are increasingly popular in the technology sector, because there's a guaranteed ROI for marketers. Bolles added that Jupitermedia may serve as a model, at least for the future of technology exhibitions.
Matthew Schwartz contributed to this report.
The unprecedented Exhibition Industry Summit produced observations and recommendations on issues to be addressed in six areas:
* Building and venue issues
* Labor and work rules
* Set-up and removal considerations
* Show management rules, regulations and operations
* Transportation and shipping issues
* Attendance promotion
The main themes of each were cost control and customer convenience. For the full set of recommendations, see http://www.iaem.org/content/ExhibitionIndustryManifesto.PDF.