Are Trade Shows Dying?

Author: John Honovich, Published on Dec 28, 2008

Internet 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 and Pelco 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

How Much Does It Cost Per Attendee?

I estimate an average of $2,000 USD. While most attendees only go to the exhibits and the exhibits are usually free or only a nominal charge, other significant costs must be absorbed by companies:
  • 3 days out of the field ($1,000 USD)
  • Airfare, flight, meals, etc ($1,000 USD)

Why do Exhibitors Exhibit?

The main reason to exhibit is to secure new leads. While a booth can have some branding and signaling effect, the most concrete quantification of return is how many warm leads a manufacturer has coming out of the show.

How Much Does it Cost to Exhibit?

The minimum cost (all-in) for exhibiting at a major show such as ASIS or ISC West is $25,000 USD.  A 10' x 10' booth (those mini-booths in the back) cost $10,000 USD. Then you have the costs of constructing a booth, shipping it, staffing it with 2 knowledgeable people for multiple days, etc. 

The big booths at the front of the show floor usually cost exhibitors (all in) $300,000 or more. 

What Returns can an Exhibitor expect?

In good times, a small both may get a few hundred visitors and a dozen or so warm leads. A big booth may get a few thousand visitors and a few hundred warm leads.

Given that deals in the security industry are routinely in the hundreds of thousands of dollars, closing a few new deals from a show can be an effective investment.

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.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

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
The economics are compelling, and in a recession, the attraction will be even stronger.

Internet Traffic is Big and Getting Bigger

You might be surprised how big traffic on the Internet already is. Even small manufacturers can easily do 30,000 visits per year. My site only went live this April and I did over 100,00 visits this year. I would not be surprised if big manufacturers like Axis receive over 1 million visits per year. 

If manufacturers spent even a little money on search engine optimization, the traffic could be 500% or more greater. For instance, for a US google search for "ip cameras", Axis only comes in 4th, behind 3 companies selling cameras. If Axis was first, it would easily get 200,000 more visitors per year, just from that term, just from a 3 position increase.

How will the Recession Impact the Trade Shows?

Pressures on both attendees and exhibitors:
  • 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
Together, this fosters a vicious cycle for trade shows.

What can Trade Shows do?

I do think trade shows have value (just like newspaper have value). However, the business model faces fundamental and permanent downward shift. They will not be able to depend on historical exhibitor revenues and they will have to radically increase the amount of rich training, education and meetings that online cannot replicate.

Thoughts?

1 report cite this report:

How to Cut Costs Using the Internet on Jan 03, 2009
The recession is forcing broad reductions. Worse, the era of excess consumer spending is over. In response, most business around the world, whether...

Related Reports

ESX 2017 Final Show Report on Jun 16, 2017
The ESX (Electronic Security Expo) day 3 / Thursday is done and the exhibits are over. IPVM was in Nashville covering it in-depth. Below covers...
Hikvision: IPVM Is "Destined To Fail" on Jun 14, 2017
Hikvision has accused IPVM of 'cyberbullying' them, declaring IPVM 'destined to fail.' This is the 3rd anti-IPVM Hikvision post in 2 weeks,...
ASIS 2017 Cuts Day 3 Exhibits to 3 Hours on Jun 14, 2017
The 3rd day of major trade shows are always the worst attended. And with shows with poor traffic, like ASIS over the past few years, day 3 has...
NLSS / ATV Partnership Examined on Jun 13, 2017
NLSS has been one of the most ambitious security / surveillance startups. After selling his last startup, Sypixx, to Cisco, Pete...
Avigilon New COO James Henderson Profile on May 23, 2017
It has been nearly 2 years since the infamous Bryan Schmode 'resigned' as Avigilon COO. Now, Avigilon once again has a COO, promoting James...
Hikvision Marketer Caught Spamming, Fails at Coverup, Fired on May 23, 2017
A Hikvision marketing employee was caught by IPCamTalk trying to surreptitiously disparage IPVM and IPCamTalk. This is an outgrowth of Hikvision's...
ShotSpotter To IPO, Facing Low Revenue and Losses on May 17, 2017
A rare event for North American security manufacturers is upcoming. ShotSpotter is planning to IPO on the NASDAQ, aiming to raise $34.5...
A Marketing Home Run For Knightscope - Man Attacks Robot on Apr 27, 2017
We criticize Knightscope regularly - their lack of revenue, their trying to fool mom 'n pop investors, their associating themselves with a clueless...
Chinese 'Attacking Us From Every Direction', Says US FBI on Apr 25, 2017
"Chinese eating our lunch. Attacking us from every direction" said the US FBI's Deputy Director Andrew McCabe at the ASIS 2017 CSO Summit. .@FBI...
Beware The "Hit List" Ranking on Apr 21, 2017
The hit list. Kirschenbaum's recent newsletter complained about a 'hit list', bemoaning how a company took aim at ADT. Alas, that's the Google...

Most Recent Industry Reports

Avigilon Announces RADAR-Based Presence Detector on Jun 22, 2017
RADAR is gaining momentum within physical security. Two months after Axis announced a network radar detector, Avigilon has announced a RADAR-Based...
Covert Cloud Camera Service Launching (KJB) on Jun 22, 2017
Cloud IP cameras, for consumers, has become increasingly commonplace. However, covert cameras, lag there, with few options. Now, North America's...
Manufacturers Shipping Unlicensed H.265 Products on Jun 22, 2017
While H.265 support in video surveillance is growing, IPVM's research shows that most surveillance manufacturers are shipping H.265 products with...
Uniview Low-Cost Bullet PTZ Tested on Jun 21, 2017
Uniview is offering a HD zoom bullet camera, the IPC742SR9-PZ30-32G, with an integrated pan / tilt positioner, for the price of a low-cost...
QSR Video Surveillance Best Practices on Jun 21, 2017
Fast food restaurants or QSRs (quick service restaurants), are frequent victims of crime and fraud. Because they are open late, deal with cash, and...
45 Drives 'Lowest Cost' Enterprise Storage Company Profile on Jun 21, 2017
45 Drives claims the "lowest cost per Hard Drive Slot in the industry." But who or what is '45 Drives'? What started as a product design to...
No Hack, Still Liable, Court Finds ADT on Jun 20, 2017
Recently, ADT has been in the news for a $16 million settlement for a cyber security vulnerability class action suit. One of the most important...
Resolver / PPM 2000 Incident Management Platform Profile on Jun 20, 2017
You might have seen the company whose employees wear hockey jerseys at trade shows and wondered "what do they do?" PPM 2000 has been active in...
Axis P3225 Mk II Tested Vs. Original on Jun 20, 2017
Axis has released a number of 'Mk II' versions of their cameras, which are the same fundamental camera but with specific improvements. We tested...
Directory of 40 IP Camera Manufacturer Discovery Tools on Jun 19, 2017
Locating the IP address of a DHCP client or factory defaulted device on a network is often a difficult task.  In another report, we discussed...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact