It's been a rough year for the business of big trade shows. One after another, some of the industry's largest shows seemed to fall like dominoes in a row. In June, Comdex announced, in a not altogether surprising move, that it was pulling the plug on what had been the granddaddy of all megashows, drawing some 200,000 attendees annually. Although the consumer electronics show could have been run profitably in 2004, organizers claimed, it was clear to buyers and sellers alike that there was a better way to meet.
The shakeout wasn't limited to consumer electronics. Other industries saw their biggest shows fold as well. In September, CeBit America, the American arm of the Hannover, Germany, technology trade show, folded despite having attracted more than 15,000 attendees in the past. Bill Sell, vice president of brand and customer development for CeBit America said, "It just seems a one-size-fits-all show doesn't do it." And one month later, the American Hardware Manufacturers Assoc-iation (AHMA) canceled its 2005 AHMA Hardware Show and released a statement saying the organization had decided to focus instead on "creating alternative, optimally valuable, and relevant events" for its members.
But this cluster of cancellations does not herald the end of the trade show as we know it. Instead, it represents a changing business climate in which show organizers must find better ways to reach their target audience. Right now, there are three schools of thought: focusing on vertical, rather than horizontal, segments, co-locating smaller shows, and opting instead for business-to-consumer shows, as Ziff Media did in October, with the first annual DigitalLife trade show in New York City's Jacob Javits Convention Center. The event, which included more than 100 exhibitors, billed itself as the "first digital technology and entertainment event of, by, and for the consumer." Over four days, the show drew approximately 25,000 attendees, according to executive producer Jim Hasl. "My goal for the show was to put the consumers in the center of the universe and build a show around their needs," Hasl says. Rather than having a show for the trade, who would then try to reach the consumer, Hasl aimed directly for his target audience.
"It's like throwing a net out," says Vista, CA-based trade show organizer Candy Adams. "You've got to consider how big the holes are in your net." The emphasis now is on results, and organizers have been forced to admit that relying on a large trade show alone will not produce them. "A lot have found out that the big horizontal shows don't do it, and they're looking for different ways to get to their specific markets," Adams says. But that's not to say they're abandoning trade shows altogether. "There's no substitute for trade shows," says Skip Cox, president of Red Bank, NJ-based Exhibit Surveys, an events industry research firm. "But people need to create a more effective event mix."
Adjusting the Focus
"It's all about focus now, and that's why vertical events are really kicking the horizontal events' butts," Adams says. Horizontal events, which would include the entirety of, for example, the sporting goods industry, are losing exhibitors and attendees to vertical events, which would focus on one segment of an industry, such as golf or tennis. "The industry sectors that have organized into vertical segments have done much better than those that have not," says Doug Ducate, president of the Chicago-based Center for Exhibition Industry Research. Ducate considers the health-care industry the best illustration of the success of vertical shows. "Among the major industry associations, none has its own trade show. They have deferred instead to the vertical silos within the industry," such as cardiology, or pediatrics. "And as a result, that sector has 2,400 business-to-business events." That number represents approximately 24 percent of all business-to-business events in operation, and makes health care the industry with the most events.
But because many industries remain ill suited to vertical events, the large, horizontal event is expected to survive. Take, for example, the home appliance industry, in which there is a vast mix of product lines, from toasters to microwaves to washing machines and so on. "It's unlikely that you'd ever see a show just for microwave ovens, or just for mixers," says Ducate. "So there are some industries that can never go entirely vertical."
Hitting the Road
Companies seeking better results from shows employ what's being called relationship marketing, but what basically means working the existing customer list. Companies produce their own regional or road shows to market only their own products to attendees they already have in their database. "These events are heavily focused on customers and not prospects," says Cox. "They're preaching to the choir, which is fine, because it's good to reinforce that relationship with the customer." For many companies and organizations, this strategy makes better economic sense than participating in large trade shows. "A lot more Fortune 1000 companies started doing more private events after 9/11, when they didn't think they were reaching the right people," Adams says. "So they turned to regional shows and road shows to capture the people that they want, the people who are already in their database. They found they were better off focusing on current customers and trying to up-sell." Adams cites a Centrino Wireless road show as typical of this trend. "They went out in an RV, picked up press people, and took them to all the wireless hot spots, like Starbucks," she says. "This is what people are doing so they don't have to ship their booth in, pay exhibit fees, and ship in people. They're looking for innovative ways to get to the market and get the word out without having to do the standard four days at McCormick."
Corporations in many industries benefit from corporate events, but the trend has been particularly strong in technology, where the loss of Comdex triggered a reconfiguration of the industry's event universe. "Even in heavy industry, like manufacturing, we see 37 percent of trade show exhibitors producing their own events," Cox says. "Now we're up to 55 percent of technology companies, because in their own events, they've got no competition and can get a very specific message across." But doesn't it cost more to stage several private, regional events than it would to exhibit at a more comprehensive trade show? Michael Bandy, president of the Chicago-based Trade Show Exhibitors Association, says it's not a question of cost, necessarily, but one of results. "The question is, are they getting the best results for the cost? Corporate shows allow companies to control their costs and their audience. It's very complementary to trade shows."
Learning To Share
While exhibitors turn to more focused, vertical events to more effectively reach smaller, targeted audiences, some of these same shows are co-locating with other vertical shows to increase their attendee base. The primary motivation for co-locating is cost efficiency. "The co-located show is basically two show managers who decide to cross-pollinate," says Adams. "They can get two shows for the price of one, and add the other show's attendee list to their database." Richard Usherwood, president of the New England Apparel Club in Marlboro, MA, recently co-located that organization's trade show with the Men's and Boys' Apparel Club and the Empire State Footwear Association to form the Syracuse Super Show. Because so many retailers in the area sell items from all categories, it made sense to offer them the opportunity to do it all under one roof. "We all get more customers, and we share in the overhead costs." Usherwood says his sales were up 35 percent in the co-located environment, thanks to what he calls "crossover business."
But, co-location isn't a fail-safe solution for dwindling trade show traffic. Show organizers considering co-location must carefully consider the cost and the benefit of sharing a venue with another show. "Attendees will spend the same total amount of time at a trade show, whether it's a single show or two shows co-located," cautions Cox. "So if you add a new show for them to go to, they will be spending less time at your show." But, Cox says, it's a fine line between profit and loss. "You can really lose value if you cannibalize your own show too much. But, if you're getting crossover from the other show, it can make up for that. And adding value for the attendee is always great." The basic bottom line: Co-located shows can be very successful if the shows involved are a good match, but a good match is hard to find.
Cutting Out the MiddleMan
Finally, some show producers, like DigitalLife's Hasl, skip the trade entirely. "Consumer shows play a very important and growing role in the industry, and we're seeing these become far more common," says Ducate. Ducate attributes this growth to a shift in buying habits of consumers. "Our style of shopping for our personal needs is really paralleling how we shop for our business needs." Going forward, Hasl says, he expects "shows like this to have a measurable effect in terms of defining what kind of technology and entertainment becomes available." Each attendee was offered what Hasl calls a "Digital Passport," for which he says 6,000 took the time to apply. The passports collected information on consumers' purchasing habits, intentions, and needs. As attendees wandered from booth to booth, they could swipe their digital passports to receive special offers—and to share their demographic information with exhibitors. "It gives us deep market insight into this audience," says Hasl. At presstime, data from the show had yet to be tabulated, but Hasl expects to trace consumer activity beyond the show floor. "Out there in the city in the next 30 days, I want to see results," Hasl says, adding that he'll be able to do so by tracking redemption of the coupons and special offers distributed at the show.
Still, some approach consumer shows with skepticism. "Why do consumers need that when they can walk into a Good Guys or Best Buy?" wonders Candy Adams. Hasl argues that the retail experience is all about making a transaction, whereas the trade show floor is "about having fun and being able to make better purchasing decisions."
Whether future shows will court the trade or the consumer, the scope of the target audience will narrow. "Even after 9/11, the quality of people at trade shows was the same; the quantity was less." And ultimately, this may be a blessing in disguise. "I think it's a good thing that we're just having fewer people on the show floor now," Adams continues. "I don't need the looky-loos, the tire-kickers, or the trick-or-treaters with the big bags. I need the one who can make the decision."