Budget forecasters are predicting that spending on large events will be down this year. But that's not an umbrella forecast for all types of events. Instead, marketers intend to increase financing for smaller, more targeted meetings such as executive breakfasts and roundtables.
According to a recent study, "B2B Marketers' 2008 Budget Trends," by Forrester Research, which surveyed 369 marketing professionals online during September and October 2007, almost 50% of those surveyed said they would increase spending on executive seminars and events. That represents the largest projected increase among all marketing and advertising budget categories, including public relations, print advertising, direct mail and sponsorships.
"These marketers understand that business decision-makers rely on peer testimonial, face-to-face gatherings and outside authorities to help them assess intangibles like legitimacy, credibility and trustworthiness—factors difficult to convey in both online and traditional activities," according to the report.
Although 27% said they would increase spending on trade shows while 22% said they would decrease trade show spending, survey respondents did admit to spending more on large, trade-sponsored events then any other budget category.
However, according to the study, "Client conversations and other anecdotal stories show that b2b marketers waste money when they scurry around last minute to staff the booth and expect show-related traffic, or a favorable booth placement, to produce leads. B2b marketers who fail to build interactive campaigns that preview show-specific offers, invite attendees to on-site executive briefings and continue booth conversations via email should look to spend their money elsewhere."
Analyst Laura Ramos, a VP at Forrester and the principal author of the report, explained that marketers are moving away from large events, but added, "they told us that one-to-one contact is still very important in the negotiated sales process that [is going on] in b2b marketing and selling."
Ramos attributed the shift away from spending on large trade shows to an increasing demand to prove ROI. "Over the past five years … marketers have been under a lot of pressure to demonstrate the value marketing brings to the organization," she said. "With CFOs and CEOs more accountable [for] how they spend corporate money, they want to know `What are we getting for this?' Marketers are looking at where they can get the best bang for the buck."
Smaller, more targeted events, Ramos said, are proving to be more effective, and marketers need to resist pressure to be at large events. "Our advice is stop thinking you need to be there; [instead] know you need to be there" Ramos said. "Do run up advertising online [pre-event]. Get your customers there, get your executives there and follow up afterwards. We're hooked on trade shows: Fine. Use them in a way that's going to maximize the amount of demand that you drive and the contact that you have with prospects and current customers."
Kerry Smith, president of the Event Marketing Institute, agreed that there will be a shift away from large trade shows in the coming years. "With every company's senior management focused on profitability and ROI across all parts of the organization, marketing has been under pressure for a number of years. What's happening is that attention is trickling down into events. … Marketers are looking for a business outcome that's measurable."
BtoB's "2008 Marketing Plans and Priorities" survey had similar results to the Forrester report. It found that 49.5% of marketers will increase their event budgets in 2008, but that increase will focus on smaller, more focused events for senior executives.
Large events not extinct
The shift away from large events, however, does not mean those events will go away or lose their usefulness. If anything, as marketers make more targeted decisions in choosing which events to attend and also hold events for niche audiences, those kinds of events may become more successful than in the past.
"The successful shows will become more successful over time," Smith said. "The unsuccessful ones will just keep doing the same old, same old and not be able to grow. … [Marketers] are still doing events; they're just doing them in different places. It's going to put pressure on trade show organizers to give attendees and exhibitors a reason to come back. It's not about the annual show anymore. Those arguments are gone. Marketers are waking up. If I'm spending $10 million to have a presence and I can't measure the results, there are other places I can invest money where I can get ROI."
Ramos agreed that more targeted spending can be a boon for the event industry. Marketers, she said, told Forrester they would not longer go to 100 events, instead they would go to 50 and be more selective about where they go and the size of their booths when they get there.
"Even lower spending will make events better," Ramos said. "People are going to be more aware about wasting their time. They are going to know what people entering their booths are looking for."