To 2015 and beyond exhibition organisers will increasingly need a dual strategy. While emerging markets will continue to offer strong growth opportunities, in mature markets organisers will need to compete more vigorously to maximise their share of visitors’ time and, by extension, exhibitor marketing budgets.
Three factors combine to mount a structural challenge to exhibitor value: the decline of visitor time at events; eroding visitor numbers; and the steady march of prices per square metre.
With visitor time-at-show in structural decline, shows need to compete more effectively for their share. As well as a segmented marketing approach that reaches and delivers high quality visitors, organisers need to provide these visitors with a more targeted, streamlined and value-added experience at the show. Additionally, winning organisers will increasingly be those who extend their contact with visitors outside the show.
Table: Exhibitor value and total exhibitor spend (US market), 200-2010.
Chief marketing officers’ (CMO) focus on measurability of returns will continue to sharpen, and with an expanding menu of digital tools competing for their attention, and claiming transparent ROI, trade shows are under increasing pressure to both deliver and demonstrate their value to exhibitors. This will require smarter use of digital tools, to understand and track exhibitor value, and support exhibitors with their broader marketing needs.
Digital is not a direct substitute for face-to-face. However it does enable the data and tools for organisers to engage audiences beyond the constraints of the show venue and dates.
Because of their solid base of community engagement, organisers are well positioned to address their audiences beyond the traditional show format.
While selling square metres continues to offer growth opportunities to organisers who can establish a presence in emerging trade show markets, it is apparent that in mature markets organisers will need a broader skill set to drive long-term growth. With an increasing number of resources and tools competing for share of both visitor time and exhibitor marketing budgets, organisers are increasingly challenged to demonstrate clear value to both groups. Launching and acquiring in dynamic, high-growth sectors will remain at the core of winning exhibition strategies.
In addition to this core competency, AMR believes that organisers may need to compete more aggressively for share of visitor time and, by extension, exhibitor marketing budget.
Table: Total Visitor Time (TVT) at trade shows. Us and Germany 2000-2015 including forecast.
Declining value
CMOs are focused more than ever on returns. While the need to make every marketing dollar count has undoubtedly been sharper during the recession, there is little question that the arrival of digital tools offering transparent measurement have transformed the landscape permanently and increased pressure on competing marketing channels to prove their value. At the same time, the exhibition industry appears – by one measure at least – to have been delivering declining value to its customers.
The definition of value to exhibitors as defined by AMR is best expressed in the following equation.
Visitor numbers x Average time in hall x Quality
Exhibitor dollars spent
We define the combination of visitor numbers and average time in halls as Total Visitor Time (TVT).
According to our analysis of the German and US markets between 2000 and 2010, TVT is in long-term decline. Notwithstanding cyclical effects, the hours spent in exhibitions halls are diminishing as pressure on visitors’ time increases and the number of resources available to them – particularly online – multiplies.
This creates a predicament for organisers, as raising or even maintaining price levels against this backdrop risks impacting exhibitor value, and ultimately square metre sales. Organisers face a dual challenge: Both to deliver and demonstrate value to exhibitors.
TVT has been in long-term structural decline since as far back as 2000 (see Figure 2), while the marketing dollars spent on exhibiting has been increasing. Between 2000 and 2008 TVT per exhibitor dollar dropped by 28 per cent (see Figure 1). The 2008-10 period saw a recession-driven correction, however this was driven by a dramatic decline in exhibitor spend, rather than an increase in TVT. In 2010 this measure of exhibitor value remained 16 per cent below 2000 levels.
There is some good news for exhibitors: TVT per dollar is not the only measure of value; visitor quality is a fundamental value driver, and there are others. Occasionally declining TVT can even benefit a show by removing lower quality visitors from the halls. For example, the number of visitor companies may remain constant while the number of junior, non-decision making visitors is reduced. However, on a fundamental level declining TVT presents a challenge to the exhibition industry, which cannot be met solely through measures focused on visitor quality, important though these are. Exhibition organisers require longer-term strategies that will allow them to compete more effectively for visitor time.
Getting them back next year
Having delivered the audience, how do organisers persuade visitors to stay longer, and to return to the next edition? The answer is to improve Return on Time (RoT). Unless visitors feel that the show experience is delivering them a good return on their time, they are unlikely to be generous with it.
There are two ways in which organisers can improve visitor RoT. The first is to maximise visitors’ productivity, through tools that help them get to what they want more quickly. The second is to add value, for example by offering must-have content or networking opportunities.
The third lever for maximising share of visitor time requires organisers to extend visitor contact further outside the dates of the exhibition (see Figure 3).
Where once organisers had to understand visitor purchasing cycles, they increasingly now need to understand “a day in the life” of a visitor. Visitors’ goals, whether they be keeping up to date with product developments, to problem-solve or to find and purchase products, can increasingly be met on an ongoing basis by online tools.
Thus organisers who are unable of engaging visitors outside their show through development of these tools may find themselves competing for a diminishing share of visitors’ attention. There are already several examples of e-media owners launching exhibitions successfully, and these “online and live” providers are likely to become increasingly attractive acquisition targets for traditional organisers.
Many exhibitors are still unable to accurately track the value captured by exhibiting. This places exhibitions at a disadvantage versus all things digital, which come with transparent measurement built-in. But once again it is digital tools that can help exhibitions to deliver, and prove, their value.
As we have seen, visitor time has become more expensive to exhibitors, and this may in part be responsible for impacting the share of budget CMOs are willing to dedicate to the medium.
In mature markets, a strategy based solely upon the sale of square metres carries long-term risks. Whether generated at the show or off-site, organisers need to increase their share of non-stand revenues.
The good news is that this is consistent with, and directly ties into, the “share of visitor time strategy” that organisers need to develop.
Table: Expanding exhibitions' share of time in the visitor workflow - illustrative.
Getting into the mind of the exhibitor
The first and fundamental step is to understand exhibitor goals up front. Survey data enables organisers to understand the diverse goals exhibitors have across the different segments of the exhibitor base – be it flag waving, meeting current customers, sales or just lead generation – and the extent to which these are being met. Only then can organisers understand how and to who they are delivering value, how they are over- or under-delivering, and to take the measures required, from improving or adjusting aspects of the event, to raising prices.
The next step is proof of delivery, which as leading-edge organisers have realised, needs to be more tailored than the traditional post-show press release proclaiming total visitor numbers; however the exhibitor defines value. This may be anything from the number of buyers from California; the total value of goods signed at or post-show; the number of design directors from London who say they will return next year, all potential deal-clinchers for the potential exhibitor.
Organisers can leverage data to assist exhibitors with lead management. Through tracking mobile app user behaviour, organisers can further capture insights on the visitor journey around the trade show, be it amount of time visitors spent at each stand, or the number of whitepapers downloaded.
Whatever drives value perceptions, today’s organisers have the electronic tools to identify these drivers, to measure delivery and to communicate this to exhibitors.
– AMR International is an events industry consultancy firm. Copies of the full white paper can be downloaded at www.amrinternational.com. Any comments? Email exhibitionworld@mashmedia.net
