European Shows

What can we learn?

By Jenny Tesar

The numbers boggle the imagination: 630,000 visitors during an eight-day period...80,000 exhibitor personnel... 5,327 exhibiting companies from 43 nations... 3.3million net square feet of exhibit space in 21 halls. This was CeBIT '92, the computerand communications trade fair held annually in Hannover, Germany.

Many other European shows also produce stratospheric statistics. These hugeinternational events do not tell the entire story, however. There are also thousands ofsmaller trade and consumer shows in Europe. Indeed, Europe holds 60 percent of theworld's trade show events, with Germany accounting for the lion's share.

But even regional events generally draw larger crowds of exhibitors and attendees thando their American counterparts. Hannover's public show for car, boat, garden, tourism,caravan and camping attracts 250,000 consumers each year.

Why are shows -- or fairs, as they're called in Europe -- so much larger? What otherdifferences exist between European and American events? Might it benefit NorthAmerican show organizers to adapt some aspects of European fairs for their own events?

A matter of history
Many of the differences between European and American shows can be traced to theirbeginnings. European shows have always focused on selling and buying. They evolved from the age-old weekly marketplace. Even in Ancient Rome there were fish markets, grain markets, oil markets and other forums designed for people who wanted to buy and sell.

It is known that in the year 710 more than 700 traders attended a fair at St. Denis innorthern France. Frankfurt became an important fair site by the llth century, andin 1240, Emperor Ludwig granted Frankfurt the privilege to hold annual autumn fairs.Leipzig became a pre-eminent fair city in the 15th century, by which time fairs in manyEuropean cities had become well established events on marketing calendars, timed to fitcompanies' buying and manufacturing schedules.

Even specific aspects of the trade show industry can be traced back through the ages. In1564 the first known fair catalog appeared. In 1710 a lengthy text was publisheddescribing various fairs throughout Europe -- and offering guidelines on how to be asuccessful exhibitor!

The origins of U.S. trade shows were very different. By and large, they began as adjunctsto annual meetings of associations and other interest groups. They were largelyinformational, goodwill events. It wasn't until recent decades that companies becameenlightened to the marketing and sales potential of trade shows.

Because European countries are comparatively small, with comparatively small buyerbases, companies have traditionally been active in international markets. Today, almostall of the larger European fairs are officially "international." Foreign exhibitors andbuyers from all parts of the world are actively recruited.

A related factor is the heterogeneous marketplace that has always existed on thecontinent. Different languages and cultures make it very costly for manufacturers torely heavily on sales calls, direct mail or print advertising. Travel is expensive, too.According to a McGraw-Hill Research study, the cost of a business-to-business salescall in Europe averaged $640.13 in 1987, ranging from $128.18 in Ireland to awhopping $1,439.62 in Denmark.

At trade shows, exhibitors have booth personnel not only from domestic offices but fromoffices around the world. "Exhibitors bring in salespeople from the Far East, the U.S. andelsewhere because they expect visitors from these places," says Joachim Schafer,President of Hannover Fairs USA. "At many major European shows, 30 to 40 percent ofthe visitors are from foreign countries. Exhibitors make sure that contacts are available who know the visitors, can speak the language and understand the culture."

In contrast, the United States is a huge, homogeneous marketplace dominated by a singlelanguage. Companies are only beginning to perceive the importance of exports andinternational trade -- and they are only beginning to look at how to effectively enter andcompete in the international arena.

A look at budgets illustrates the relative importance of trade fairs in the marketing mix.European manufacturers devote as much as 50 percent of their annual marketing budgetto trade fair participation. In the United States, according to Business Marketingmagazine, the average is 16.5 percent.

Who owns what
In Europe, a fairground or convention center is typically operated by an independenttrade fair authority that is at least partially under government control. City and state governments are major shareholders in these enterprises.

In many places, the trade fair authority also owns many if not all the shows held at thefairground. For example, CeBIT is owned by the Hannover Fair Authority. However,various associations support the show and, as Klaus Goehrmann, Chairman of the Boardof the Hannover Fair Authority points out, if they aren't satisfied, they can go elsewhere. "We invest a lot in infrastructure, telecommunications, promotion and other aspects because we must compete with other show organizers. One reason why Germany is the leader in organizing fairs is that we are so competitive."

Some European shows are owned by associations. For example, the German Machine ToolBuilders Association (VDW) owns EMO, the world's largest machine tool show. Stillother shows are owned by private organizers such as Blenheim and Reed. Associations and private companies rent exhibit space from the trade fair authority, at so much per square unit. They may also contract with the authority for additional services. For example, VDW contracts with the Hannover Fair Authority to handle on-site operations for EMO.

Typically in Europe, there is one strong international fair in an industry. Other groupsthen organize around this fair, perhaps holding regional fairs or more vertical events.

EMO is unusual because it's got the clout of an EEC cartel behind it. EMO is a biennialshow, held at Hannover every fourth year, and at a rotating site -- Paris, Milan, etc. -- inthe other years. "During an EMO year, a company that exhibits in EMO may not exhibitin any other European machine tool show," explains Helmut von Monschaw, GeneralManager of VDW. "Therefore, EMO is the only machine tool show in Europe in that year.During the in-between years, companies participate in other shows. For example, in1992 there are seven machine tool shows in Germany, two in France and two in Italy.VDW runs two of the German shows; the remainder are organized by other groups,including both private groups and trade fair authorities."

No "colored diapers"
Generally speaking, European shows are laid out differently than U.S. events, and thereare significant differences in exhibit design, construction and set up. Shows are laid outby product categories. At CeBIT '92, for example, exhibitors with banking equipmentwere in hall two; network computing was in halls 12 and 13; production datamanagement was in hall 19.

U.S. show organizers prepare a floorplan for an upcoming show, then use any of severalspace assignment systems to have exhibitors pick their booth space. In Europe,exhibitors tell an organizer how much space they want and in which product area. Then floorplans are prepared and booth locations are assigned. Exhibitors may or may not get all the space they requested. Another kink is "grandfathering": exhibitors can often lay claim to the exact same spot year after year.

Carol Fojtik, Vice President of Hall-Erickson Inc., a U.S. show management firm,explains some of the problems this can cause a pavilion organizer. "When you apply forspace, there's no guarantee that you'll be given the configuration you request. So you takea risk selling space within the pavilion prior to receiving confirmation. For example,although we're pretty much grandfathered into a location at Automechanika in Frankfurt,this year they redesigned the hall and gave me a nine-meter-wide block instead of thesix-meter width I requested. To scale the block into booths of a size that would bemarketable to U.S companies, I had to cut it into island-type spaces. I lost a lot of salable space, which I still had to pay for; I had to pay for all the aisles I cut through the block in order to make it salable."

A show laid out by product areas can present problems for exhibitors whose productsspan several categories. Some companies solve this problem by having more than oneexhibit in a large international event. IBM had exhibits in five halls at CeBIT '92, staffedby more than 1,200 people.

Pavilions also are affected, notes Fojtik: "The organizers will ask you about the productmake-up of your exhibitors. But because you haven't solicited space sales yet, you maynot know the answer. You have to guess, and you may end up having several pavilions indifferent halls. At Automechanika, I had three U.S.A. pavilions in three different halls."

The plus side, of course, is that many attendees come to see specific kinds of products.They're only interested in banking equipment or CADCAM or local area networks.Organizing the show by product categories enables visitors to make the most efficient use of their time. Indeed, some shows are so large that it's almost physically impossible for a visitor to see everything.

When walking a European show, American visitors notice the absence of pipe and drape."Europeans laugh when they see pipe and drape," says Jim Kelty, Vice President of Sales& Marketing for R.E. Rogers, an international freight forwarder. Ingrid Boyd, President and Owner of Glahé International, a full-service international exhibit house, notes that Europeans call our drapes "colored diapers."

Instead of pipe and drape, a show organizer offers exhibitors a shell scheme, which isconstructed from Octanorm or one of many other available systems. The shell's walls extend the full width of the booth and from the back to the front edge. Lighting, in the form of spotlights or fluorescents, is included in the package and carpeting is usually included as well. The hardwall booth gives even small companies a classy appearance, and the exhibitor gains the ability to use the wall space for graphics and other materials.

Of course, exhibitors may choose to rent open space, and erect their own booths -- or"stands," as they are called overseas. Some exhibits may be only an 8' X 10'. Otherscover more than 100,000 square feet, have three or four stories and containrestaurants, bars, offices, meeting rooms for hundreds of people and other facilities thatencourage visitors to remain and conduct business. At some fairgrounds, companies evenmaintain permanent stands. At Hannover, for example, one huge hall is filled withpermanent multi-story stands belonging to IBM, Siemens-Nixdorf and other largecompanies. The hall is used only once a year, for the eight-day CeBIT fair.

Both booth space and booths themselves are much more expensive in Europe. Spaceprices vary depending on the industry and the success of the show. "They also varydepending on whether you have an in-row space, a corner space or a single-blockspace," says Boyd. "There are prime areas on the floor, which cost more. There'snormally an additional cost for a second story -- but not for third and fourth floors."

"In the U.S., the big thing is to qualify visitors, then send them on their way and follow-up later," says Kelty. "In Europe, exhibitors and visitors want to conduct business.Exhibitors want people to spend time in the booth. They want the people to feel welcomeand relaxed."

"Buyers are much more educated in Europe," adds Boyd. "Before the show, buyers havealready looked into the products or machines they want to buy. They arrive with theintention of buying. At the show they simply make up their minds about which model isthe better product, then sit down and negotiate. And the exhibitors use the show todetermine their production ceiling for the next year."

Hammers and paint brushes
Labor rules vary from country to country, but generally an exhibitor has more leewayin set-up and teardown than do exhibitors in the U.S. In Germany, for example, anexhibitor can drive his car right into the hall, unload his exhibit in his reserved space,then take his own hammer and set up the exhibit.

"Drayage is an unfamiliar concept to Europeans," says Kelty. "The contractor who takescare of the on-site handling of exhibit materials also takes care of international forwarding and customs clearance. For example, when we ship freight to a show at Frankfurt, we work with one of the designated freight agents there. We consign the goods to them, and they pick it up at the airport and move it directly into the booth space."

Unfortunately, rates are not standardized. "In the U.S., most drayage is done on a per-hundredweight basis," Kelty notes. "A freight-handling tariff in Frankfurt may bedifferent from that used in Hannover or Munich. And when you cross borders -- well, theBelgians do things one way, the French another."

Once an exhibit's crates are on the show floor, there is no labor pool to put together thebooth. European exhibitors typically rely on their exhibit designer/producer, whowears more hats than his American counterpart. The exhibit designer/producer haspeople on staff who unload the truck, set up the booth and eventually take it down andhaul it home. Large exhibits are actually built on-site by skilled craftspeople employedby the exhibit designer/producer.

"Probably 50 or 60 different exhibit builders were working in one hall at a recentFrankfurt show," Kelty remarks. "They brought their own labor -- there wasn't a laborpool from which to pick up a few extra workers if they fell behind. If they needed morehelp, they had to call back to their home office or go out to a temp agency."

"You cannot use casual labor," says Boyd. "Exhibits are basically built on-site. You haveto have people who know how to set up the steel skeleton to a second or third story."

Walk through a hall in the days prior to a show's opening and you sidestep framingmaterials, table saws, paint cans and other supplies. You can also trip into an aisle if youdon't watch where you're going. Most European exhibits are on two-inch-high platforms --hence the word "stand." Electrical wires are run under the platforms -- so there's noneed to tape wires to the floor.

Because European shows and exhibits are so much larger, the setup period is muchlonger than in the U.S. Three- and four-week installations are common. EMO takes sixweeks to set up, and two to three weeks to tear down.

Show hours are longer, too. Many shows run a week or longer, with the doors openingdaily at 8 or 9 a.m., and not closing until 6 p.m. This helps to compensate for all thetime, money and energy spent in preparing for the shows. Goehrmann also notes that longhours are the only way to handle the crowds of attendees: "Hotels, transportation systems and fairgrounds cannot squeeze the crowds into shorter time periods. Exhibitors couldn't deal with it either. Some of our exhibitors want us to make shows even longer, because they cannot handle all the visitors to their booths."

Ministers, kings, and John Q. Public
The seriousness accorded European trade fairs is not limited to organizers andparticipants. Host communities and government leaders also regard them as veryimportant. The infrastructure of a host city is usually geared toward making fairs work."Everyone in Hannover thinks 'fair' during a major event," explains Goehrmann. "Thepolice run a special program to ensure that traffic flows rapidly. [Fairground parkinglots accommodate 55,000 vehicles.] The number of streetcars in operation is increased.Helicopters shuttle visitors between the airport and the fair site."

The general public recognizes its stake in the event, too. Hotel space is often verylimited. Many attendees must stay in hotels on the outskirts of the city or even in citiesand towns an hour or two away -- which helps the economy of the outer communities.Also, many private homes rent rooms to attendees, which puts money directly into thepocketbooks of ordinary citizens.

"There's a much greater appreciation of the economic value of trade fairs in Europe,"says Fojtik. "And communities seek opportunities for additional revenues. For example,it's not unusual to see city buses carrying enormous banners advertising fair exhibitors.I don't think there's been a major effort in the U.S. to find ways that convention centersand other city organizations can help one another."

It's common for a city mayor, prime minister or federal secretary of commerce topresent a formal speech at the opening of an international fair. Government leaders alsowalk the floor, looking at products and talking to exhibitors. Belgium's King Baudouinchatted with exhibitors at a recent Brussels exhibition. "Events like CeBIT and EMO areoften platforms to launch political programs," says Goehrmann. "Politicians andentrepreneurs use them as opportunities to talk with one another, on an internationalbasis, about industry problems and other issues."

Top executives of exhibiting
companies are present at European shows -- not in distant hotel suites, but on the showfloor. "It is not below the chairman of the board of a company such as Siemens-Nixdorfto be on the show floor doing business," explains Schafer. "And that samechairman of the board will go to another show next week as a visitor and potentialbuyer."

Many trade events are also open to the public for at least a day or two, and they mayfeature special activities geared toward youngsters, such as computer camps anduniversity exhibits. Show organizers and exhibitors recognize that teenagers are theemployees of tomorrow. "It's also an image-building opportunity," notes Fojtik."Exhibitors are implanting their name in a child's mind at an early age. By continuing todo this over a period of years, companies anticipate that youngsters will purchase theirproducts when they become adult consumers."

Entrance fees can be set to either encourage or discourage a broad audience. "Aspecialized high-tech show may have a high entrance fee, say 30 deutsch mark [about$18]," says Goehrmann. "For a show like CeBIT, where we want a wider audience, theprice is perhaps 20 DM. For a public show, which competes with the circus or themovies, we might charge 10 DM for adults and 5 DM for kids. Then there are some showswhere the price is not prohibitive, but where entrance is limited to people who canidentify themselves as members of a specific industry."

Once on-site, exhibitors and attendees find that everything is geared toward makingvisits efficient and pleasant. At Hannover, for example, fair authorities provide acomplimentary bus service that operates continuously, making it quick and convenientfor people to travel from building to building. There are banks, post offices, pharmacies,grocery stores, florists and other shops. There are 18 restaurants plus numerous snackbars, stands and rolling carts both indoors and out that supply food. There are parkbenches and lawns where people picnic.

The Hannover fairgrounds even has a privately owned, 10-track railroad station,enabling people from throughout Europe to arrive directly at the show site. "The Swissand Austrian railroads send sleeping cars, so people can sleep en route, do theirbusiness, then sleep overnight on the way home," says Goehrmann.

"At these big fairs, people work hard," he adds. "They work hard from 9 to 6. Then theyhave parties at the booths or get together at receptions or dinners. The mainconcentration is business. And no matter how late the night, they are back at the exhibitat 9 the next morning."

But if it's a nice day, might not a chief executive take off to play golf? "No! No! No!" hesays, a look of horror on his face.

CES translates a European concept for its American audienceThis Spring in Chicago, the Electronic Industries Association celebrated the 25thanniversary of its Consumer Electronics Show by breaking tradition. For the first timein the show's history, the doors of Summer CES were opened to consumers. "We had seen that this worked in Europe, and we wanted to increase public awareness of consumer electronics products available in the U.S. market," says Cynthia Upson, EIA Staff Vice President of Communications. The move also gave the 984 exhibitors direct access to customers, and an arena in which to survey consumers and gauge response to newproduct lines.

The first two days of the show -- Thursday and Friday -- were open to thetrade only. On Saturday and Sunday, consumers were also admitted, at a cost of $10 perperson -- $8 in advance. By the time the doors closed, Summer CES had attracted 51,850trade visitors and 98,720 consumers. Upson stresses that opening a trade show to the public is a complicated endeavor: "You have to be very detailed, and go through every scenario that could possible occur."

EIA's efforts began long before showtime. They put together a guide that was given outfree to all consumers. Among the guide's features was a walking tour of the show floor,describing what to look for in different sections. EIA also created special attractionsspecifically for consumers, such as the Classroom of the Future, which offered hands-onopportunities to work with CD-ROM, computers, laser disc players and educationalsoftware. Over 40,000 attendees saw a laser light and video show that explained thelayout of the show floor and various product areas.

"We did a lot of regional radio and television advertising," says Upson. "During the daysimmediately prior to that weekend, we had costumed people handing out posters indowntown Chicago during lunchtime and during the morning and evening rush hours. Wealso worked with product-specific consumer magazines in areas such as audio, video andhome office.

"On Friday evening, we did a changeover from a trade layout to a consumer layout. Forexample, we installed booth areas in the lobbies where consumers could buy tickets. Weincreased parking and traffic control. We added personnel on the show floor to directvisitors and answer their questions."

Some potential exhibitors expressed doubts. Others signed up because consumers would be attending. They weren't disappointed. "We have never exhibited on the floor at CES," says Bob Mlynarski, Manager of Training for Bang & Olufsen. "We are here this year because of the consumers. And we've been extremely pleased with the traffic we had on trade days, too. It exceeded all our expectations."

"Consumers brought our products to life," says Jerry Kalov, President of Dynascan'sCobra and Lloyd's divisions. "They were excited by what they saw and what they learned,and their excitement was contagious."

"The biggest surprise to most exhibitors was the sophistication, interest and courtesy ofthe consumers who came," comments Sam Lippman, EIA Staff Vice President. "Theconcerns about security and ease of movement which kept some exhibitors and buyersfrom participating never materialized. In fact, there were less security problems thanin recent years."

Many exhibitors increased their booth staffs to enable one-on-one contact withconsumers. Some redesigned their booths to emphasize hands-on demonstration areas andallow for consumer surveys. They attracted attendees with celebrity appearances, prizegiveaways and informational demonstrations.

The show drew wider-than-usual media coverage, ranging from high-profile televisionnetwork news programs to six Chicago-area radio stations that carried live broadcastsfrom the show floor. Video magazine even sponsored a tour, giving its readers a package deal that included airfare, hotel rooms, a tour of the show with the magazine's editors and a special reception.

EIA is planning to invite consumers to Summer CES again next year. But based onresponses from exhibitors, three days of the '93 show will be open to the trade only; thefourth day will be open to both trade visitors and the general public.

EIA's first experience with this European concept was an expensive endeavor, but worthevery penny. "Our costs far exceeded the money we took in on consumer tickets, thoughwe do expect to break even on the show as a whole," says Upson. "As far as we'reconcerned, this was an investment in the industry. We're a non-profit organization andthat's what we're here for."