Are Trade Shows Dying?
By: John Honovich, Published on Dec 28, 2008Internet economics and the recession pose a significant risk to the future of trade shows. A broad trend facing all technology industries, we may see dramatic reductions and changes to leading security trade shows in the next 3 years. With Norbain [link no longer available] and Pelc [link no longer available]o both not exhibiting at IFSEC plus weak attendance at ASIS 2008, these fears and concerns are rising.
This report examines the underlying economics of trade shows and the comparative value to Internet marketing.
How Do Trade Shows Make Money?
Just like newspapers depend on classified ads for the bulk of their revenue, trade shows depend on exhibitors. And just like the Internet is destroying the classified ad business for newspapers, the Internet will undermine the exhibitor business for trade shows.
Why Do Attendees Go?
Two general motives exist for integrators and end users to attend trade shows:
- Entertainment: Companies send attendees as a reward or bonus
- Information: Companies want to learn what is new and find solutions to their needs
- 3 days out of the field ($1,000 USD)
- Airfare, flight, meals, etc ($1,000 USD)
How the Internet Hurts Trade Shows
Company websites are essentially virtual exhibits for manufacturers.
They key here is that the cost per visitor on-line is 100x or 1000x less than the cost at trade shows. Indeed, the effective cost per warm lead on line is significantly less than at trade shows.
The online costs per lead will only drop as manufacturers online strategies mature and the Internet becomes more ubiquitous.
This is an issue of economics. Exhibits at trade shows will always provide richer, more personal interactions than the web but the ROI of exhibits will not be able to compete with the ROI of online marketing.
A Simple Example of Online Marketing Benefits
Let's say a small manufacturer wants to generate new leads. Rather than spend $25,000 on an exhibit, they do the simplest thing possible and buy Google search ad results.
They would pay $1 per click for the term "video surveillance." This places them in the top 1 - 3 position and generate an estimated 30 clicks a day. (You could even get much cheaper and many more clicks by using more targeted keywords - try out the Google estimator).
In a year, that would be 10,000 new visitors to a manufacturer's website for $10,000. If only 1% of visitors became leads that would be 100 new leads (1% is a poor conversion rate).
Compare this to an booth at a trade show:
- 60% lower cost
- 800% more leads
- No hassle with travel and risk
- Without any optimization
- Companies will reduce the number of attendees and the number of shows attended. Employees sent as a reward or for entertainment will be significantly cut.
- Companies will look for cheaper ways to find information.
- With lower attendees (and likely less people looking to buy), exhibitors will generate fewer warm leads.
- Exhibitors will tigten their marketing budgets in general and then further as they see lower attendees and leads.
- Exhibitors will shift budget more on line
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