Though the exhibition industry grew 3.2% overall from 2006 to 2007, that growth was impacted by a decline of 1.9% in the fourth quarter compared to 2006 levels, according to an April report from the Center for Exhibition Industry Research (CEIR).
The overall growth of 3.2% follows a trend of slowed growth for the industry over the past three years with increases of 5.8% in 2005 and 4.8% in 2006, according to the annual CEIR Index Report. Slowed growth was also seen throughout most exhibition industry sectors, and three key sectors saw declines during the fourth quarter: net square feet (-3.0%), exhibitors (-3.6%) and revenue (-1.6%).
Despite the setbacks, all four key industry metrics did manage to see overall growth from 2006 to 2007 with revenue up 6.8%, attendees up 4.9% and slight increases among exhibitors and net square feet of 0.9% and 0.3%, respectively.
Growth since 2000 is even more reserved, as net square feet and revenue increased only 3.1% each and attendees by 2.0%, leaving exhibitors last with only 1.5% growth.
The report combined data from more than 300 events across 11 industry sectors—all of which experienced growth in 2007, except building and construction, which fell 2.2%. The industry sector growth was led by government, public and nonprofit service (12.6%) followed by communications and information technology (6.9%) and raw materials and science (6.6%).
Doug Ducate, president-CEO of CEIR, said the slump in growth toward the end of last year was largely related to the recent downturn in the economy—especially in the building and construction sector. “The building and construction shows are held during the winter months, the bulk of those events took place in the first quarter of "07 before the building and subprime mortgage issues exploded. While we did see some decline, it probably is going to be felt more in "08 than in "07,” he said. “We've always known exhibitions are a trailing indicator and not a leading indicator.”
According to Ducate, there will be some industries that will continue to see growth—or at the very least remain stable—despite the economy. “There are two or three sectors that continue to lead everyone,” he said. “[In] healthcare we don't expect any change. Sports and entertainment is reflecting an interesting trend—there's an age influence.”
Ducate said that the retiring baby boomer generation and their Gen X children will help each of these sectors see continued growth over the next year. Which, ultimately, means good business for b2b industries.
“At the top end, you've got seniors. You're seeing a lot of advertising for senior communities built around golf courses ... a ski resort for senior citizens. At the other end, you've got the extreme games and kids doing things on skateboards that defy physics and gravity. You're watching the sporting goods industry manufacture new products at both ends of the spectrum.”
One metric in the report that did not fit in with the general pattern of slowing growth was the rise in attendance at events of 4.9% throughout the year, and continued growth of 1.0% in the last quarter.
According to Laura Ramos, VP-principal analyst at Forrester Research, the growth was indicative of a larger trend. “I found it interesting that the growth in revenue and attendance outpaced the growth in floor space and exhibitors between 2006 and 2007—showing that smaller, more targeted shows are what are popular and what's working,” she said.
Ducate said this trend is also an indicator that, despite a slowed economy, marketers recognize that events are essential to their overall marketing mix. “Exhibitions have shown a resistance to downturn and resilience to bounce back,” he said. “It's a much more efficient way to see customers.”
According to Ducate, marketers worried about next year should keep an eye on travel and advertising budgets. “Two things that businesses almost immediately cut in a soft economy is advertising and travel,” he said. “It's always important to watch the Smith Travel report and keep a handle on business travel, because that will be one of the first signals that businesses are pulling out of events.”
That said, the trend in smaller, more targeted events, should keep attendees engaged. “One of the needs that a convention serves is the gathering of intelligence about that industry,” Ducate said. “One of the more fruitful features is having industry experts that can talk about the future of the industry in the short and long term. Putting more influence on content and less on "see and be seen' [is important]. It's not about positioning, it's about value.”
Another important consideration for marketers, given the likely decrease in travel, is the growing trend toward virtual events. According to Ramos, “I think the impact of virtual trade shows is underrepresented in the [CEIR] report. Companies like ON24 and Unisfair are starting to produce platforms and services that simulate the physical event in an online world that is much easier to use than Second Life.” M