Exhibitors cycle in and out of shows all the time. Nothing new about that. But the pullout of a marquee-level exhibitor has the potential to be incendiary.

Galen Poss knows all about that. As Hanley Wood Exhibitions' president, he and the SURFACES show team faced a watershed moment when seven of their top 10 customers, along with some other exhibitors, dropped out of the show in the five weeks leading up to the 2004 event space draw. Total negative impact: 105,000 net square feet, representing 20 percent of the show floor.

Few shows can easily withstand the departure of even one of their bellwether exhibitors. Their product lines, size, and market power generate enormous interest, attendance, and competitive rivalry. If they dumped you, would your show recover … or decline?

That's the question the COMDEX show faced in 2000, when IBM, Apple Computer, and Compaq pulled out. Five years before that, leading videogame console manufacturers left International CES to support a new event - E3. CES retooled and today ranks as the largest annual trade show in North America, while E3 reconfigured and downsized when it faced the departure of key exhibitors after its 2006 exposition. Shaw and Mohawk, representing three-quarters of the residential carpet marketplace after industry consolidation, stopped exhibiting at SURFACES four years ago. And the National Association of Broadcasters is strategizing its ongoing response to pullouts from its 2008 exposition by AVID Technology (announced last November) and Apple (a few months later).

Even show organizers most engaged in their markets can be caught flat-footed.

Why Leave?
Three developments are having a big impact on corporate marketing decisions.

Stiffer competition for a piece of the pie. More events and more alternatives abound. These force marketers to question every dollar they invest - especially an expensive splash at an industry show. In fact, Skip Cox, CEO of Exhibit Surveys Inc., expects more exhibitors to rethink their event participation every year on a zero-based model.

"Budget drives a lot of the decision," said Glenda Brungardt, tradeshow/event manager, HP Imaging & Printing Americas Marketing, Hewlett-Packard Company. "Our philosophy is to do fewer shows and do them better." Her group has pulled out of shows when a business segment or vertical target was no longer a top priority, it could not validate attendee demographics, or its audience narrowed and no longer fit the portfolio. "The only way you'll ever know this is happening," Brungardt noted, "is if you're doing your measures correctly."

There's a reason for the shift of dollars to vertical, niche shows and proprietary events. "It's hard for [bellwethers] to reach their target market with so much clutter in horizontal shows," said David A. Weil, senior director of convention and tradeshow services, SmithBucklin Corporation.

As early as 2002, the Center for Exhibition Industry Research (CEIR) found that 47 percent of all companies that exhibit put on at least one private event that year. Big corporations like these events because they can control the message, brand, and takeaways. That is exactly why YRC Worldwide, a Fortune 500 transportation and logistics company, has aggressively built a program of proprietary events, funded with trade-show dollars. Benefits include a captive audience, fewer distractions, and full control of the educational programming. "We are not moving that way exclusively," said Gregory A. Reid, YRC's executive vice president and chief marketing officer, "but proprietary events are now part of the marketing mix."

Digital marketing pulls rank. More and different digital tactics - e-mail, search marketing, Webinars, Web 2.0 media, online display ads, and online video - are taking a bigger bite of the marketing budget.

"Everyone has a significant investment in online activities, compared to 10 years ago, and it is not incremental to the marketing budget," Reid said. "The money tends to come from the more traditional channels of trade events and print advertising."

Trade shows still represent the biggest share (20 percent) of the marketing budget for marketing directors and senior executives surveyed for B2B Marketing in 2008 by Marketing Profs and Forrester Research. But their budgets for trade shows would be one of the first to be eliminated in the event of a downturn. And more than 85 percent of respondents believe business-to-business media are more effective when they are integrated.

Show organizers need to take a leaf from this playbook. The more ways they can bring an integrated strategy of benefits and values to customers, Poss noted, the better off they will be. "It's a natural progression to incorporate print media, online offerings, events, and associations for audiences," he said.

But that integrated approach can mean participation in a pavilion, a speaker slot on the program, and sponsorship of an activity - with less exhibit space. "The Intels of the world aren't spending less money - they're spending it differently," Cox said. "Apple is a good example of a company that has never felt loyalty to an event. They pick their places and make decisions based on what's good for them."

Consolidation shrinks exhibitor and buyer bases. Traffic density drops when one buyer walks a show floor instead of three (bad news for shows). That attendee, though, has more buying power, and so a show that draws these higher-quality attendees can increase its value (good news). As large companies consolidate into behemoths (bad news), some claim the power and reach to bypass shows at will (really bad news).

Yet not all industries or marketplaces are feeling this pain. "I doubt that many health-care exhibitors feel more in control of their destiny than 10 years ago," said Eric Allen, executive vice president, Healthcare Convention & Exhibitors Association (HCEA). "With new state laws governing gifts to physicians growing like mushrooms, the No. 1 avenue for major health-care companies to reach their target audience - with the exception of their sales force - is still the major meeting in a particular specialty."

More Than 'Space'
A show doesn't just lose "booth space rental" when a marquee exhibitor flies the coop. A major presence is gone. So are its sponsorship of show activities, advertising in show publications, promotion of the event to prospects and customers, display of industry-leading products, and even news announcements for the media.

SURFACES encountered what Poss called "a perfect storm." The dominant companies in an important category felt their very presence brought a lot of their customers to the event, and exposed them to other suppliers and avenues of distribution. At least one of the companies proceeded to host more than a dozen of its own regional events over the next two years.

"They believed they had the bandwidth to do proprietary events for their audience, and they would tell you that they were spending more money on them," Poss said. "Their hope, I think, was to cocoon their customers, and in the process minimize the importance of SURFACES." Consequently, everything SURFACES was doing came under scrutiny. "We had to be heard over the controversy and confusion in the industry, so we turned the volume way up on what we were doing well," Poss said, "and changed what wasn't working." (See sidebar on p. 27.)

Plenty of shows are at risk. "We certainly are experiencing some of [these] challenges," said Greg P. Thomas, PA, MPH, vice president, professional education & alliance development, American Academy of Physician Assistants, as he looks ahead to his organization's 2009 conference.

To protect the asset, entire show management teams must ratchet up their actions:

• Elevate the scale of their involvement with key exhibitors.
• Strengthen their engagement with buyers.
• Increase the travel budget for their salespeople.
• Customize and strategize the consultative sell.
• Manage floor-plan design, booth size, and aisle density.
• Invest in education and programs that improve exhibitors' success.
• Work constantly on growing their base.

What to Do Now
As one industry executive put it, when a marquee exhibitor pulls out, a show is already two years late in dealing with it. What can you do now to stave off any chance of a pullout … or stanch an open wound?

Understand that costs will rise. SURFACES increased its marketing budget more than 25 percent from 2003 to 2004, in addition to adding plenty of new show features. While marketing costs remain a higher percentage than they were in 2003, they have eased back from the original steep increase. "Look at the alternative," Poss said. "When this dynamic has taken place in other industries, the show either has dramatically declined or gone away. Our show was threatened. Under those circumstances, you spend what you need to spend."

Rev up communication. It's when times are tough that trade shows can really demonstrate their value in helping suppliers move product. It's also the time when big exhibitors have to make tough marketing decisions. "Are you close enough to them that they will be comfortable confiding in you?" asked Tom Corcoran, president, Corcoran Expositions. "Can you help them back down a little so no one loses face?"

Positioning the relationship as a "partnership" changes the dynamics. If exhibitors are going to pull out, "you want their first phone call to be to you so you can work together to minimize the problem," said HCEA's Allen. And don't over-react. The hole left in the departing exhibitor's wake also can be an opportunity for a second-tier company to step up. That also requires outreach and relationship-building from the show organizer.

Rethink what you do. While it shouldn't change a well-produced show, a departing marquee exhibitor can be a healthy wake-up call. After reading CEIR's study on key exhibitors (see sidebar on opposite page), SmithBucklin reached out to key accounts. "We talked about their objectives, what they're seeing and what's changing, and what's keeping them up at night," Weil said. "We shared the information with our team, and it opened our eyes to the challenge with ROI."

Staff members were assigned to visit booths and personalize their relationships with exhibitors. "This said to them, 'You're important to us,'" Weil said. It also hammered home to SmithBucklin the importance of research in justifying the association's existence and its show's value.

Stepping back can be a "crossroads" moment. What if you thought about keeping booth sizes from becoming mammoth? "A lot of people are proud as peacocks about the giant booths at their shows, but it makes you more vulnerable," Corcoran said. "There's nothing wrong until the economy goes sour or consolidation happens. I never want a couple of guys to be able to turn me upside-down."

Define how shows will be judged. Show organizers that can align their value with a marquee company's marketing objectives will be less likely to lose those exhibitors to other shows or alternative marketing opportunities. You get that knowledge not from "selling space" but from "consulting" - extensive questioning in face-to-face calls that cost money and take time. Yet "a major hindrance for show organizers is the legacy staff that has to transition to the strategic sell," Cox said.

Hewlett-Packard is already planning priorities for 2009. "We spend a lot more time partnering with account managers at larger shows than we did 10 years ago," Brungardt said. "We are not uncomfortable sharing the metrics we need. If I am to be successful, the show has to be successful."

The communication must go both ways. YRC's Reid has begun to ask show organizers for more information, but he doesn't always get it. "A lot of older shows are really bad at providing attendee demographics," he said. "They're stuck in the psychology of floor space and don't feel the need to validate their value to the industry." It's only when YRC pulls out of a show or dramatically reduces the space it's buying that shows pay attention. "That's when we get into a discussion about who is attending and how the show aligns with our objectives and strategy," Reid added. "They're not as proactive as they should be."

Nor is it as simple as tracking sales dollar for dollar, added HCEA's Allen. Many exhibitors are working on sophisticated (and proprietary) models for quantifying what they're trying to achieve at shows and evaluating their effectiveness. Over time, these will reveal which media work best for specific goals.

Measure what's meaningful. Exhibitors like Hewlett-Packard measure everything, including numbering and grading inquiries (did they turn into leads?); their messages and how they resonate; and the effectiveness of booth staffing. They are demanding the same rigor from show organizers: attendance that is verified and audited, as well as buying power and decision-making data that is accurate and deep.

For the National Association of Convenience Stores (NACS), accountability means aisle density. The show will bring 9,000 buyers into 380,000 net square feet of exhibit space, so its metric is a retailer every 40 feet. Keeping to that aisle density last year meant that 100 companies were wait-listed for exhibit space. "It's about face time and future sales," said Bob Hughes, NACS vice president of supplier relations & exhibitions. "We will not grow the show [floor] until we grow the attendance." This is a legacy from the mid-1990s, when NACS' then-CEO cut the show floor by 50,000 square feet, choosing to exchange revenue for buyer density.

NACS also tracks features it adds to the show. Retailers who visit the new products showroom can select products of interest using a barcode-scanning system. When they leave the showroom, they receive detailed information and a map of where to find the products they scanned; the exhibitors receive information about the retailer's interest. The association also created a Web-based portal, using BDMetrics technology, for attendees and suppliers to personalize their show activities. Individual reports for attendees and exhibitors help justify their participation, and NACS can track their involvement.

Invest in key exhibitors. NACS learned a lesson from digitally delivering many of its touchpoints the last couple of years. Not only is it going back to the personal touch, with more customer visits and an expanded travel budget, it is taking along something of real value to share - industry data. The association even bought a research company so it can provide more and better data.

"Bringing a team to give a customized state-of-the-industry report is a very big deal and a great benefit to anchor companies," Hughes said. "It presents us as a knowledge base."

NACS' Hunter Club is another example of how shows can tighten their bonds with "frontrunner" suppliers. Gold, silver, and bronze members are engaged in events and recognized in front of retailers year-round. Their CEOs meet with big-chain retailer CEOs in "top-to-top" networking. They pre-select their booths ahead of other exhibitors. And NACS arranges for mystery shoppers to visit their booths, conduct exit interviews with attendees, and provide feedback. "It's about teaching them how to be better exhibitors," Hughes said.

A gold member of the Hunter Club pays $65,000 for the privilege. "We're not looking to walk away [from the show] with the biggest payday," he said. "We're really investing those dollars right back into the companies."

Engage your community. An exhibitor advisory committee must be "your eyes and ears," according to Corcoran - and "your voice," added Brungardt. If they're truly representative of all the exhibitors, they'll raise red flags in their meetings about what they're seeing.

Bellwether companies that pull out do not want to lose face, so they try to take other exhibitors with them or turn the herd the wrong way to hide their actions. Exhibitor stakeholders with strong and deep ties to show management can head them off. "They will stand up and say good things about your show because they know you're making good decisions on their behalf," Corcoran said. "It's harder for people to say bad things to people they know who have been good to them."

Making the Case for Value

When exhibitor departures snowballed before the 2004 SURFACES space draw, show management acted decisively and immediately. First, it contained the damage from word of mouth and reinforced value for the remaining exhibitor base. Then it ensured the show's continued viability by aggressively promoting its value to attendees. Here are other steps SURFACES took, which amount to best practices for all show organizers:

Get all stakeholders involved. SURFACES immediately turned to third parties - from other large and small exhibitors to publications and associations, buying groups and consultants, and show suppliers - that are vested in its success. "If the show is damaged, [those third parties'] ability to drive revenue is also damaged," said Galen Poss, CEM, president, Hanley Wood Exhibitions. "They benefit in keeping the show healthy." The media were especially important in getting out "the real story."

Hanley Wood had an especially important ally. It had bought SURFACES in 2000 from the World Floorcovering Association, which was still early in its 25-year sponsorship agreement. "They understood the importance of having a marketplace for the industry, and they could touch customers in ways we couldn't," said Poss.

Start early and promote often. By opening registration earlier, accelerating promotion deadlines, running more ads, and being truthful about attendance percentages as people signed on, SURFACES was able to counter any rumors being circulated that no one was coming. More importantly, the show team was able to communicate that if retailers bought from the same two or three big players, their offerings to consumers would all look the same. They emphasized to independent retailers the importance of buying different products based on their customer base. The ad campaign honed in on the show's value: offering "choice" and "variety."

Target, target, target. A database program called ADAPT, developed in-house and sold to A2Z, maintained 1.6 million attendee records for all Hanley Wood shows (which are vertically focused in building and construction). SURFACES could mine the records without barrier. When it saw a particular segment registering early, it could identify the demographics of the cluster and dump the criteria back into the database to pull up matches, no matter what show they had attended. Rather than fire shotgun blasts everywhere, the team took a very focused approach through e-mails, direct marketing, and telemarketing. "We would scoop those folks out and prepare a special marketing campaign," Poss said. "This was an important component of our success."

Help ongoing exhibitors make a big splash. SURFACES partnered with several exhibitors on entertainment events that benefited the show as a whole. Mannington Mills, for example, sponsored Kool & The Gang in an invitation-only event that ended up being very wide in scope.

Recognize and reward long-time attendees and power buyers. A member of the SURFACES team suggested a "Loyalty Club" for those with five consecutive years or more of attendance. They were given a special badge and a card to get into an exclusive Loyalty Club on site. Plus, exclusive times were set aside for power buyers to have exclusive access to and private appointments on the show floor.

Beef up new features. To attract both exhibitors and attendees, SURFACES added a host of new features, among them the Installation Showcase, "Win a Designer" Contest, Town Hall, and Best Practices Retail Forum. "When you're talking about 40,000 people attending the event, it's hard to say what did this or that," Poss said. "We just continued to heap things on the already attractive buffet table for customers. And while some have been modified or expanded, others have gone away in exchange for something better."

Hanley Wood is also launching CONNECT, a Web-based program linking databases of buyers and sellers three to five months prior to, during, and after the show, which allows them to set appointments, conduct specialized searches, and communicate with each other - "necessary in the marketplace of today and tomorrow," Poss said.

Stay connected. Show management did not adopt an adversarial role with the exhibitors that dropped out. Rather, the team has maintained good relationships with senior executives at those companies, leaving the door open for their return. "The market is big enough for both of us," Poss said.

Track and promote the results. At the 2004 show, the first after the defections, revenue was down 2 percent, the same number of exhibitors as 2003 took 12 percent less exhibit space, and attendance dropped 10 percent. SURFACES improved in 2005: Revenue grew 9 percent, the number of exhibitors was up 14 percent, the dip in net square footage narrowed to 8 percent, and attendance was down only 4.5 percent. The show rallied further in 2006: Revenues rose 18 percent, the same number of exhibitors as 2005 filled a sold-out show floor (about 19,000 square feet below peak in 2003), and attendance scaled 2003's high by 2 percent.

Editor's Note: Galen Poss' keynote presentation closed the Exhibition and Convention Executives Forum (ECEF) program on June 19 in Washington, D.C.

Prime Sources of Information

Two Center for Exhibition Industry Research (CEIR) reports, underwritten by the PCMA Education Foundation, pull no punches in examining key exhibitor needs and accountability for their show investment.

The June 2007 report Managing the Special Needs of Key Exhibitors and Market Leaders explains the increased challenges for exhibition organizers in engaging key clients and drilling down to discover their new needs. It also recognizes that a pullout isn't always bad: It may open the way for competitors and emerging companies, and give the exhibition a new look and fresh opportunities.

Measuring Return on Investment (ROI) From Exhibiting and Event Marketing, a November 2007 report, explores the growing need for shows to account for their value to corporate marketers. For a third of the 10,000 business-to-business exhibitions held in the United States each year at which orders are written, calculating ROI is relatively simple - total orders written versus the cost of exhibiting. That leaves, however, many thousands of other exhibitions a more complex measurement task. The report presents an ROI Tool Kit (www.pcma.org) to standardize show measurement. Meeting professionals can input information into templates; the sophisticated technology enables ROI calculations to be made, and tutorials help users analyze the results and present them to exhibitors as justification for their show participation. To purchase either of these reports, visit www.ceir.org.

Take a Fresh Look at Your Show

Think of Martin P. Smith as a secret weapon. The vice president and founder of ethnoMetrics, Inc., a sister company of GES, uses video technology (often tied in with RFID and data systems) to help show organizers analyze movement of traffic, timing of participant engagement, and tracking of audience segments.

Here's what he's learned from his work with shows:

Improve exhibitors' interaction with attendees. ethnoMetrics' data measures how many attendees walk by, enter a booth, and engage with a product or demonstration. Just 27 percent of those who walk into a booth actually find someone to talk to. Pulling out of a show may be a big mistake for a marquee exhibitor if the highly qualified audience is right but staff isn't executing tactically.

Show organizers need to remember that if attendees go into a booth and have a bad experience, they don't say, "I won't go into the booth again." They say, "I won't come to this show again." Connect the dots for the exhibitors, and your show will grow.

Help exhibitors understand the dynamics of design and behavior. The placement, size, and color of components will create certain behaviors that can be counterproductive to exhibitors' goals. For example, exhibit personnel will sit if chairs are put in the booth, or carpet colors can create a force-field effect. Too few staff manning the booth can telegraph the message that the company may not be doing well, while too many can make the company seem process-heavy or complicated.

Experiment with floor-plan layouts. One association formerly used a linear floor plan with three segments. By changing to a hub-and-spoke design that included all segments in the same aisle, the show increased attendee engagement in booths by 35 minutes. The show also began to rotate placement of four major anchor exhibitors. According to ethnoMetrics' data, less than 2 percent of attendees stopped at an anchor booth at the front of the hall, 21 percent entered an anchor in the middle, and 78 percent visited an anchor in the back. That stopped complaints about the back of the hall.

Keep the show's momentum high from start to finish. Too many show organizers schedule all high-energy events on Day 1, which makes the drop in momentum on Day 2 even more pronounced. It's counterproductive to what exhibitors are trying to accomplish. People will stay if you space out the activities.

Contributing Editor Maxine Golding is an award-winning writer, editor, and publishing consultant.