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CEIR Update Especially Prepared for MATSO Orlando, FL

CEIR Update Especially Prepared for MATSO Orlando, FL. Presented By: Douglas L. Ducate, CEM, CMP President & CEO Center for Exhibition Industry Research. Role and Value of Face-to-Face Marketing Study. Role and Value of Face-to-Face Study. Conducted by CEIR (to be released in early 2003)

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CEIR Update Especially Prepared for MATSO Orlando, FL

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  1. CEIR UpdateEspecially Prepared for MATSOOrlando, FL Presented By: Douglas L. Ducate, CEM, CMPPresident & CEO Center for Exhibition Industry Research

  2. Role and Value of Face-to-Face Marketing Study

  3. Role and Value of Face-to-Face Study • Conducted by CEIR (to be released in early 2003) • Objectives: • Role exhibitions play in the Customer Continuum • Value attendees and exhibitors place on exhibitions – now and in the future • Use and value of exhibitions compared to other types of face- to-face activities • How can exhibitors maximize ROI/ROO? • Trends in use of exhibitions for 2003 • Respondents from all major industry segments (2,718 attendees and 916 exhibitors)

  4. Importance of Face-to-Face Interaction • High importance placed on face-to-face (f-to-f) : • 76% of attendees rate f-to-f with potential new vendors very or extremely important • 87% of exhibitors rate f-to-f very or extremely important in marketing to prospects • Economy, Internet, videoconferencing and/or tele- conferencing has not negatively impacted the importance of f-to-f even in a post 9/11 era.

  5. Face-to-Face Activity *Vendor produced user groups, conferences, exhibitions, road shows, mobile truck exhibits, briefing centers

  6. Value of Face-to-Face Interactions % Rating Very/Extremely Valuable * Value in performing their jobs ** Value in marketing their products or services

  7. Change in Value Over Past Two Years

  8. Change in Value Over Next Two Years

  9. Importance of Exhibition Face-to-Face in Purchasing Process & Customer Relationships % Very/Extremely Important

  10. Conclusions • Face-to-Face (f-to-f) overall continues to be important, and of more value today than two years ago. • Perceived value of f-to-f at exhibitions is strong relative to other f-to-f. • Exhibitions play a strong role in the purchasing/sales process, not just marcom and branding. • Private events compete heavily for marketing budgets. More importantly, they compete for attendees. • Private events not just a large company trend. • Private events are often successful because they deliver high value and focused information. Lesson: segment and “customize” shows to deliver high value information.

  11. Conclusions • Disconnect between attendees and exhibitors as to the relative perceived value of exhibitions and private events. Private events of secondary value to attendees compared to exhibitions as an opportunity for face-to-face with vendors. • Quality f-to-f interaction is critical to providing high value to attendees. Communicate to exhibitors: • Exhibitions are an important part of the sales process. Be prepared to advance attendees along the purchasing path with specific info. • Attendees prefer “one-on-one” as opposed to “one-on-many” approaches for delivering information. • Knowledge of product is most important staff attribute • They prefer to talk to people who know the product more than top management • Train staff. Only 2% use outside vendors for training

  12. Event Marketing Definition Events are face to face experiences designed to educate and motivate customers and prospects to accelerate the sales cycles more efficiently, effectively and consistently than a sales call alone can.

  13. Key Marketing Objectives in a Tight Economy To retain and grow my existing customer base To educate and demonstrate thought leadership To provide a forum for rich conversations To build a community around my brand

  14. Key takeaways from global research results High touch matters more than ever: events (not tradeshows) are an increasingly important part of the marketing mix Globally, ‘event marketing’ represents from 12.5% to 30% of the respondents’ marketing budgets (25-50% of that is tradeshows). Event are used primarily for building relationships and increasing product knowledge…Tradeshows for building awareness and capturing leads. Measurement is critical, but appropriate tools and cost are obstacles

  15. The role of shows and events in marketing How do you get more share of the mix?

  16. The role of shows and events in marketing Proprietary Events Sponsorships Share of Voice Trade Shows Channel Events Leadership

  17. Four things to consider • Support and deliver marketing metrics that matter • Redesign shows to support key marketing objectives • Consider roadshows, regionalization and consumer expansion • Deepen relationships with largest customers to provide more strategic and creative events

  18. There is a Perceived Value Decline in Some Exhibitions

  19. To Analyze Problem • Understand business model • Identify results concerns • Identify costs concerns • Develop remedies • IAEM - Publish manifesto

  20. The U.S. Exhibition Industry Business Model

  21. Show Room Bellman Catering Banquet Engineering Housekeeping Ambiance in Place Concrete Drayage Food Service Furniture Rental Utility Service Cleaning Service AmbianceTemporary Hotel to Exhibit Hall

  22. Access to a MarketOrganizers Facilities

  23. Facilities • Control services that invade building systems • Electrical • Telephone • Water/Waste • Gas • Food Service

  24. Organizers • Official Contractors • Exclusive Contractors

  25. The price for access to a market is free services and/or revenue sharing • Free services and revenue sharing result in cost shifting • Cost shifting is allocating the cost of market access to revenue centers • Allocating costs creates above market pricing for products and services that are then considered out of value

  26. There is a Perceived Value Decline in Some Exhibitions

  27. Why?ResultsCosts

  28. POTENTIAL AUDIENCE • Messaging • Leads • Sales • PR • Brand Enhancement • Awareness Building Exhibit Performance Model EXHIBITATTRACTION • Exhibit Size • Promotion • Awareness/Perception • Products Exhibited • Design/Graphics • Attention-getting Techniques EXHIBIT EFFICIENCY (Person-to-Person Contact) • No. of Staff • Staff Performance • Profile of Staff • Staff Knowledge • Training RESULTS Source: Exhibit Surveys

  29. Less Face to Face Interaction EXHIBIT TEAM EFFICIENCY(Personal Contact Achieved With Visitors Attracted) Exhibit Team Efficiency Industrial 59% Medical 76% Retail 61% Computer 62% Telecom 63% Source: Exhibit Surveys

  30. Changing Attendee Activity Total Buying Plans (TBP) TBP Industrial 49% Medical 62% Retail 59% Computer 56% Telecom 51% Source: Exhibit Surveys

  31. Changing Attendee Activity Average Hours Industrial 10.4 Medical 7.4 Retail 10.1 Computer 9.3 Telecom 9.6 Average Hours Spent at Exhibits Source: Exhibit Surveys

  32. Changing Attendee Activity Traffic Density (Td) Lower(Td = Attendees/100 sq.ft.) TD Industrial 2.0 Medical 2.2 Retail 1.6 Computer 4.2 Telecom 2.6 Source: Exhibit Surveys

  33. Traffic Density Relative to Satisfaction Low Exhibitor Satisfaction High Low Attendee &OrganizerSatisfaction High Assumptions: Average Hours Viewing Exhibits = 8.0 hrs. Total Show Hours = 20 hrs. Source Exhibit Surveys

  34. Why?ResultsCosts

  35. Nominal Air Fare 1982 2000 Total % Increase $122.77 $143.58 16.9% Source: Air Transport Association

  36. Average Annual Room Rates 1982 2000 Total % Increase $50.56 $85.89 69.8% Source: American Hotel & Motel Association

  37. Occupancy tax Rate 199519982001 Anaheim 13% 15% 15% Atlanta 13% 12% 14% Chicago 7% 15% 15% Dallas 13% 13% 15% Las Vegas 8% 9% 11% Orlando 11% 11% 11% Philadelphia 12% 13% 14% Average 11% 12.6% 13.6% Source: IACVB

  38. Consumer Price Index 1982 2001 Difference% Increase 96.5 177.1 80.683.5 1992 2001 Difference% Increase 140.3 177.1 36.8 26.2 Source: Bureau of Labor Statistics U.S. Department of Labor

  39. How the Exhibit Dollar is Spent 198219962001 Exhibit Space 21% 29% 28% Exhibit Design 18% 12% T & E 13% 21% Shipping 12% 9% Show Service 18% 19% Promotion 9% 5% Other 1% 5% Source: CEIR/TSEA

  40. Exhibit Space Rates 1982 1987 1992 1997 2002 $9.25 $11.57 $14.15 $18.14 $21.40 1982-2002 131% increase Source: Trade Show Week

  41. National Average Labor Rate 1982 1992 2002 Total %Increase AV Technicians $37.76 $57.39 52% Booth cleaning (per sf/per day) $0.09 $0.13 $0.24 167% Carpenters $26.56 $38.04 $64.60 143% Decorator $25.41 $37.48 $64.37 153% Drayage per CWT (direct to hall) $12.68 $24.23 $44.00 247%* Source: Trade Show Week - *Adjusted

  42. National Average Labor Rate (cont.) 1982 1992 2002 Total %Increase Draymen $24.47 $37.18 $63.45 159% Electricians $32.24 $43.30 $60.48 88% Forklift with operator (highest weight range) $50.12 $83.85 $150.38 200% Forklift with operator (lowest weight range) $47.84 $68.24 $126.61 165%

  43. National Average Labor Rate (cont.) 1982 1992 2002 Total %Increase Plumber $33.42 $41.92 $60.12 80% Riggers $28.09 $43.39 $79.31 182% Security Guard $8.61 $12.28 $17.88 108%

  44. National Average Furnishings 1992 1997 2001 Total %Increase Side Chair $21.00 $32.35 $38.82 85% Standard Carpet $1.41 $2.86 $2.32 65% (Cut & Lay Per SF) 22x28 sign $43.38 $56.70 $63.33 46% Color Monitor $175.89 $204.45 $215.35 22% (3 Day) Lighting Outlet$51.12 $63.69 $68.23 33% (120V 500 Watt) Source: Trade Show Week

  45. Cost to Close A Sale 1984 2001 Total %Increase Close sale w/o exhibition lead$1,130 $1,140 1% Close sale with an exhibition lead$254 $705 178% Cost of a typical field sales call$205 $308 50% Average cost per visitor reached at an exhibition$90 $212 136% Source: CEIR

  46. The Value Gap Still Exists but it is Incumbent UponUs to Stop the Shrinkage

  47. Exhibit Dollars (In Billions) 1996 2001 Total % Increase $16.5 $20.5 24% Source: CEIR/TSEA

  48. There is a Perceived Value Decline in Some Exhibitions

  49. Without Real Value We Cannot Succeed With Real Value and Responsible StewardshipWe Cannot Fail

  50. Voluntary Contribution Program(VCP)

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