As the economy continues to trend downward, marketers are taking stock of event spending—and making changes. Travel is one industry hit hard, resulting in attendance drops at broad, large-scale events. On the other hand, business is booming for smaller, more-targeted niche events that can prove value for money and Web-based event marketing.
“In the beginning of the year, we did a research initiative on marketing outlook,” said Liz Miller, VP-programs and operations at the CMO Council. “Marketers said they were being asked to optimize their spend and budgets were staying flat. People [are] beginning to move dollars around.”
At the same time, however, event marketing remains one of the strong-est segments within the overall marketing budget. According to Event View 2008, a telephone survey of 1,000 senior sales and marketing executives in North America, Europe and Asia by the Event Marketing Institute and George P. Johnson, an experience marketing agency, event marketing is still considered to be an essential part of the marketing mix. The survey found that event marketing budgets made up 27% of overall marketing budgets in 2007, compared with just 22% in 2006.
In addition, 15% of those surveyed said they considered event marketing a lead tactic in 2007 compared with 13% in 2006.
In spite of this good news, these trends aren't likely to continue. B2b marketers, in general, are starting to make adjustments in response to the sluggish economy—and event marketing will see some of the effect.
Last month, at the Exhibition and Convention Executives Forum (ECEF) in Washington, D.C., Greg Reid, CMO of YRC Worldwide, in his keynote address told exhibition industry executives they must provide cost-saving alternatives to traditional exhibiting if they hope to keep large companies as customers. “Decision-making in the C-level suites of Fortune 500 companies is driven in large part by an urgent need to do more with less.” Consequently, these companies are examining their return on investment from exhibitions more closely than ever, he said.
The most significant concern facing marketers is attracting attendees to events as managers stop spending money on travel. Last month, the Society of Independent Show Organizers in an online survey asked its members how concerned they were about the impact of increased travel costs on their business—a majority of respondents said they were moderately to greatly concerned.
Respondents also said they were already seeing the impact, stating they were sending fewer of their own staff to events and cutting trips from their budget; exhibitors were also pulling back from participating in their events. Some show organizers noted up to a 10% decrease in attendance and higher then normal no-show or cancellation rates from attendees.
Event marketers agreed the reduction in travel is not hurting localized or niche events. Rather, they said, there is less draw to larger, less targeted events.
According to Andy Bosman, CMO of Navigant Consulting, a litigation and financial consulting firm, “Where I am seeing the impact is on more of your traditional industry-focused events—trade shows, educational seminars, etc. It has to do a lot with the fact that people aren't as quick to jump on their plane to fly somewhere. They are less likely to travel from outside the city into the city.”
Heidi Lorenzen, VP-corporate and international marketing at Interwoven, a company that provides content management software and Web sites services, said her event marketing decisions are being affected by the economy. “We're definitely being more selective on events that we sponsor. Demand generation is our first priority, not awareness. For us, that means creating actual leads for our sales organization to follow up on and not just making people aware of Interwoven.”
Some marketers are realizing greater return on investment on their event strategies by being more focused and targeted with corporate and customer events.
For example, Oracle Corp. is producing fewer events this year than last, but attendance overall is up 10% and the average deal size linked to events is up nearly 150% over last year, according to Oracle CMO Judith Sim.
She also said Oracle is producing more executive-level events, resulting in greater revenue opportunity for the company.
At Interwoven, smaller, more localized and targeted niche events, are not being affected by tightening budgets. “We're not having difficulty drawing attendees at our local seminars at the smaller levels,” Lorenzen said. “We are increasing smaller, targeted events such as the local seminars where we gather 40 to 60 people from a metropolitan area. It is the larger event that we're not going to be as aggressive with.”
With a need to draw attendees despite reductions in travel budgets, event marketers and attendees are turning to the Web. The ability to reach a wide audience at reduced cost is a major draw.
“With the economy, we are seeing people looking to migrate to webcasting because of its cost-effectiveness,” said Tom Masotto, VP-product management and business development at ON24, a webcasting and virtual events company. “Organizations are looking at pulling back on their marketing budgets and meet the same objectives with cost-effective alternatives.”
In his keynote at ECEF, YRC World-wide's Reid also urged events marketers to create alternatives to face-to-face shows, including virtual shows and online communities. “Get me there without the need to go there,” he said.
Matt Hubbard, VP-marketing at EWI Worldwide, an exhibit and event marketing company, said that his company has seen an increase in marketers requesting digital media as a way to reach their clients.
“In a downturn, there's more competition for fewer customers,” Hubbard said. “Many times, things like the Web and microsites are leveraged to develop a conversation preshow that will extend to postshow.”
Lorenzen has experienced the benefits of Web-based marketing firsthand. “We're definitely broadening the virtual types of events,” she said. “Based on events that I participate in, talking to my peers, I see a real variety of companies participating and experimenting in some of the newer technologies. It's getting to the point that people are so used to how they interact with the Web as a consumer, as an everyday person, and that's spilling over to expectations they have with how companies communicate with them.”
Of those marketers meeting their customers and partners in a live event, many are looking to personalized outreach to convince attendees that their time and money will be well spent.
According to Jim Burch, director of communications for Toshiba America Medical Systems, a medical equipment maker, the economic downturn has not had a major impact on his event spending decisions—but it has affected his customers.
“In a time where our customers are struggling, the last thing you want to do is flaunt a bunch of money in front of them,” Burch said. “We look strongly at the content and making sure we're being efficient—making sure that when someone comes to visit us they get served. We need to make sure that we are inviting the right people—we need to be more focused in reaching our target market.”
The CMO Council's Miller said she has seen similar trends, including marketers creating personalized URLs for event attendees that bring them to specialized Web pages with targeted information.
The message from marketers that are banking on continued success with events despite the challenging economy is to move with the times. The trick, said Burch, is to “maintain your core and get rid of superfluous costs.”
“Don't be set in your ways,” he said. “Change is good. Every business has a natural tendency when times are very good not to be as conscientious as they should be. It gets a little too free and easy. ... you can fall into traps if you're not careful: "How are you going to be bigger and better next year?' But in times of economic pullback customers understand that pullback is in tune with the industry.”
Weeding out unnecessary event spending is the best reaction to a sluggish economy, Burch said. “It helps to make everybody more efficient and the product more effective for the customer. Every event that takes place in business is an opportunity to do something positively. It's just a matter of how you take advantage.” M
Senior Reporter Kate Maddox provided additional reporting.