April 2004

The Opportunists

From advertising agencies to I&D houses, everyone wants a piece of the event marketing action. They're evaluating the options and counseling your customers. They may even be your competitors.

By Cathy Chatfield-Taylor

A new breed of agency is insinuating itself into the relationship between show producers and their customers, whispering in the exhibitor’s ear the promise of better returns on investment, equity and opportunity. They bring an outsider’s perspective to what has been an insider’s game — telling marketers what to say and where to say it.

And your show may not be the best place.

“We don’t see ourselves as replacing the show organizer’s relationship with the client. We see ourselves as facilitating it,” says Dan Belmont, President of Carat Business & Technology, Newton, MA, part of a global communications agency that places $17 billion in media time and space every year. “What we want to guarantee the organizer is, if your event is relevant to the client, then we’ll put it in the mix and scientifically consider this event with all those others that could potentially make a difference.”

More and more agencies like Carat are entering the event space to help companies evaluate their options, make informed choices and, ultimately, justify their budgets for event marketing. They come from all quarters — marketing communications, general contracting, I&D, exhibit building, even show management — and each company brings its own bias to the negotiating table.

“Let’s call a spade a spade,” Belmont says. “If you’re traditionally a shop that makes most of your money on designing, building and managing trade show programs, how likely are you to say trade shows should be less important next year than they are this year?”

If you’re acting in the client’s best interest, very likely indeed. In a surprising twist, San Francisco-based MediaLive, a self-proclaimed “media and marketing solutions company,” has made clear its intentions to provide companies with integrated marketing advice that doesn’t necessarily include the IT industry events it produces, such as COMDEX and Networld+Interop.

“People don’t want more choices, they want better choices,” says CEO Robert Priest-Heck. “If we build an integrated strategy, it’s not always going to include a MediaLive property.”

What’s going on here? Why are these people cutting in, and how can you turn the threat of being cut out into an opportunity to get a cut of the action?

Entering the event market
According to the 2003 Event Trends Study conducted by Meeting Professionals International and George P. Johnson Co. (GPJ), events now command 23 percent of the corporate marketing budget, but trade shows only account for about one fifth of total event spending. Instead, they’re allocating up to 30 percent of event budgets to conferences, seminars and mobile road shows.

The various exhibit managers responsible for these events typically engage different suppliers to produce different events, depending on the market — business-to-business, business-to-consumer or business-to-employee. What’s been missing is someone who looks at the big picture to see if event dollars are being spent wisely.

To compound the problem, industries that experience rapid change — including information technology (IT), financial services, automotive and healthcare — have seen a profusion of smaller, more frequent events where companies can get the word out about their latest offerings. With the profusion has come confusion — which events produce the best results?

Enter the agency.

“We’re working with clients to let them look at more events than they could look at themselves,” says Belmont, whose clients include Microsoft and Hewlett Packard. “We put science, process and tools against what has typically been a process of gut-level decision making and instinct.”

More than twice as many businesses now use the services of an independent measurement company than in 2002, according to the MPI/GPJ study. And measurement is a hallmark of the event marketing agency’s services.

Nth Degree (formerly known as I&D Group) now offers consulting services in support of its event production business. They calculate a payback ratio by dividing the total event value by the event budget. Then, clients can compare payback ratios of various events and allocate resources accordingly.

“Companies are looking at events and deciding where to get the best payback,” says Ed Jones, Vice President of Consulting Services for the Stone Mountain, GA, event marketing and management company. “We can help clients look at the event marketing mix and make wise choices.”

Agencies negotiate with shows on behalf of multiple clients, usually with each client represented by a dedicated team. Instead of having each fragment of the event marketing industry lobbying for its share of a company’s business, the agency puts all the pieces together — exhibit space, sponsorships, advertising, etc. — and allocates the company’s resources in the most cost-effective way.

Unlike the old days when a majority of agency fees were based on commissions paid for media placement — and trade show space was non-commissionable — today’s agencies are paid for their time, so their media recommendations are unbiased.

“We make it a point not to analyze where we make more money — on advertising, PR or trade shows,” says Gary Slack, Chairman and Chief Experience Officer of Slack Barshinger, a Chicago-based integrated marketing communication agency. His agency eliminated commission-based compensation five years ago.

And although an agency’s origins can influence its recommendations, appropriate incentives prevent that.

“In many cases, we’re incented to improve the performance of a given event based on the investment,” says Michael Westcott, Vice President of Marketing for GPJ, a North Easton, MA, company that was historically a general contractor and custom exhibit designer.

When IBM planned a presence at an overseas event, GPJ advised against it. “It was heresy as a company that grew up in the display business to talk them out of going to a multi-million dollar event, but we did, because it didn’t make sense for them,” he says.

Evaluating performance metrics
Faced with too many choices and not enough budget, companies like IBM look to agencies as a strategic partner who can help them do more with less and be successful wherever they go — be it a horizontal trade show, vertical industry event, corporate event, user conference, road show or Web-based seminar.

According to the Computer Event Marketing Association (CEMA) Industry Trends and Issues Survey, the top three factors influencing event marketing decisions are budget (31 percent), measurement (19 percent) and the economy (17 percent). As corporate marketing becomes more involved in the decision-making process, exhibit managers are spending more time — nearly 30 percent — on strategy, as opposed to planning and logistics.

“We try to work with clients to document objectives and do it in a measurable way,” says Westcott. “That can help companies recognize where they spend that they shouldn’t be, and where they could be increasing their investment.” GPJ encourages clients to spend about 5 percent of their marketing budgets on measurement so they can justify and adjust their spending from year to year.

Another way agencies help exhibitors justify event spending is to achieve cost savings by reducing future travel expenses. An industry event creates an opportunity to meet face-to-face with channel partners, management and staff, as well as clients and prospects.

“You can get tremendous cost justification by looking at trade shows as a basis for other events,” says Jones.

For example, Sprint, an Nth Degree client, at one time had almost 200 meetings with executives, customers, salespeople, product managers and suppliers at various trade shows “Each meeting had the potential to save almost $1,000 in future travel expense,” he says. “You could have potentially $200,000 in cost justification for being at these shows.”

 Jones refers to the process of evaluating events as “show opportunity analysis.” Nth Degree uses a predictive model to forecast results based on budget, booth size, traffic density, promotional opportunities, target audience interaction and other factors.

 “I advise clients to look at what the objectives are, and get your objectives that should be done on the show floor done at the exhibit, and get your objectives that work better off the show floor done outside the exhibit,” Jones says. “I don’t see it as replacing the exhibit. I see it as making it more effective.”

As exhibit managers become more focused on performance objectives, they have less time for logistics. The Freeman Cos. has stepped out of its traditional third-party role to fill that gap.

“The trade show department of 8–12 is now down to 3.2 people on average, and those people all have marketing backgrounds,” says Allen Reichard, Vice President of Strategic Management and Sales for the Dallas-based general contractor. “Their role is to identify where we go, what we say and who we talk to. The need companies have today is for suppliers to be a strategic partner to do logistics and tactics.”

Asked if Freeman will partner with agencies to deliver a full suite of exhibitor services, from strategic planning to logistics management, he says, “That’s a very interesting question and one that I can’t comment on.”

Exhibitors clearly want partners who tailor solutions to their situations and who are accountable for the results. Freeman’s new customer-centric approach is indicative of a sea-change in the industry — one that is driving together unlikely partners.

“In this industry, show management has always sat in the driver’s seat,” Reichard says. “Now the corporate exhibitor is calling the shots because the dynamics have changed.”

And agencies may be their most outspoken advocates.

Sharing market intelligence
Because there’s no industry standard for reporting event profiles, agencies dig hard and deep to make apples-to-apples comparisons between events. They ask for numbers, and they want to know how they were collected.

“It’s a tower of babble out there, with trade shows claiming any audience visitation figures they want,” says Slack. “There’s just enough exaggeration going on to create a job for agencies to do for our clients.”

To stay in the running, show organizers need to demonstrate that their events deliver the target audience in sufficient numbers to make a presence worthwhile. That means sharing more of what they know about their industry and its participants. CEMA’s Industry Trends Survey indicated that exhibitors rate barely half of show managers as helpful in accomplishing their event marketing goals, and 21 percent as too focused on show management’s objectives.

“Shows have a tremendous amount of information about the industries they serve that is not typically put forward,” Carat’s Belmont says. “They’re arming their people with what they think they need to make the sale. But they need to educate the people they’re sitting down with.”

If an agency can’t get a good, reliable read on who will be at a show, it’s unlikely to recommend it to the client. That’s why an independent attendance audit is one of the first things agencies ask show organizers to produce. Belmont warns, “You’ll hear from some event organizers who say, ‘I don’t hear my clients asking for audits.’ But what they are not hearing is that their clients don’t believe them. Isn’t that enough?”

ABC Expomark, a division of the Schaumburg, Ill.-based Audit Bureau of Circulations and the largest provider of show audits, closed its doors in December 2002. But the IT Event Measurement and Audit Council (IT EMAC) is filling that void with a push for standardized event audits by third-party providers such as BPA International and Exhibit Surveys. Initiated by MediaLive, the consortium of IT event organizers, exhibitors and their agencies, including Carat and GPJ, is expected to release draft standards by June 2004.

Acknowledging that event marketing happens both on and off the show floor, show organizers will also need to work with exhibitors and their agencies to define how much space and time they need to be effective. Adding a day before or after the show when companies can plan private events, and reserving that meeting space as part of the facility contract, is one way a show can add value for exhibitors.

“It’s a shift from hospitality events as the only ancillary event at trade shows to more carefully orchestrated, focused marketing events,” says Jones.
If shows begin to take a more consultative approach, facilitating these events can even drive new revenue to the bottom line. Show producers with foresight are partnering with agencies to develop programs that work for their clients. “Those who reject the idea and want to work with companies directly are fighting a tide,” says Westcott.

When the Consumer Electronics Association (CEA) launched the TechKnow Overland Tour to 25 college campuses last fall, GPJ worked with Toyota to sponsor a TechKnow Car exhibit, featuring a fully loaded and accessorized next generation 2004 Toyota Scion. “It was a creative way for CEA to facilitate more conversations,” he says. “And it was a new revenue stream — a way to get more business from and for their members.”

Show organizers who segment their business by media, events and online will need to give their sales staff the flexibility and authority to cut across media and create packages that add value. “The trick is to think creatively about what you have to offer, not just selling space,” says Westcott. “There’s a whole bunch of stuff you can sell me, but give me a sherpa — I need a guide.”

MediaLive clearly sees that. Tapping the company’s core competency in communications that engage audiences across multiple media, MediaLive now consults with customers on integrated marketing solutions that target its massive database of active technology buyers.

“We do great events, and because they have visibility in the market, it’s what we’re known for,” says CEO Priest-Heck. “But if that’s not the right solution, it’s not the right solution. It’s a short-term strategy to push something they don’t want to buy.”

Instead, he’ll be working with agencies on solutions that help customers do a better job of marketing in a changing market — be it a MediaLive event, a competitor’s event, a custom-made event or no event at all.

Cathy Chatfield-Taylor is a freelance writer/editor. E-mail cathy@cc-tunlimited.com.