Viewpoint
Reading the runes
Jochen Witt asks: Where do we fail and why? and suggests organisers should be prepared,
if necessary, to intervene to moderate exhibitor spending
ur industry has
experienced
considerable growth
over the last decade –
something many other industries
envy us for. Annual growth rates
consistently over 4% (for some
companies even over 8%) have
confirmed the strong position of our
industry in the marketing mix of our
clients.
However, recent developments
should draw our attention: CeBIT
and Interbike have been cancelled,
Baselworld slipped into severe
difficulties, as has Photokina, while
E3 has lost important exhibitors – all
shows which appeared to be solid.
There is never just ‘one’ reason
for these developments, causes are
always manifold. Mostly it is a mix
of factors tradeshow management
cannot influence, such as market
developments, shift of marketing or
sales channels, changes in underlying
industries and the like; as well as
aspects which show management
can influence, such as reliance on
bellwethers, over-aggressive pricing,
lack of focus on exhibitor and/or
visitor ROI, frequent changes in
strategy and/or target groups, or
uncaptured industry developments
– to name a few. However, these are
all factors which have contributed in
one way or another to the decline of
shows.
Two real life examples may serve
as illustrations:
In the second month of my time as
CEO of Koelnmesse, one of our major
shows took place – Domotechnica,
a B2B show for white goods and
household appliances. The show
was dominated by 3-4 bellwethers,
all of them competing fiercely.
These companies, consequently, had
increased their presences steadily
w w w.exhibitionworld.co.uk
over previous editions, resulting in
one spending €8m on 5,000sqm of
exhibition space for five days. When
I visited their stand, the CEO and new
CFO stated, surprisingly, that this was
the last edition for them, claiming
the “show would not render an
appropriate ROI” and “costs were not
justifiable”.
The company withdrew, its
competitors followed and, after two
more editions, the show had to be
discontinued.
In recent times a similar
development occurred at Baselworld,
where some exhibitor spending
exceeded reasonable levels due to
volume and heavy price increases.
Some bellwethers withdrew, citing
lack of ROI and preferences for
other means of marketing, along
with management failures. I do not
think the show will collapse any time
soon, but it will need a fundamental
repositioning – meanwhile the
financial losses for the organiser are
severe.
What were the lessons learned?
Although it is always tempting
to see exhibitors increase their
investments into a show, organisers
need to act as moderators of exhibitor
Jochen Witt is
President and
CEO of Cologne-
based JWC, and
a former UFI
President
spending. A tradefair is the only
product where the customer is
part of the product: A withdrawal
of bellwethers changes the DNA
and the character of the show and
is difficult or even impossible to
compensate. Where shows depend on
key participants, organisers should
be highly alert with regard to the
spending habits of those companies.
The Easyfairs model may be a way
around this problem, but I assume
the company will also have difficult
discussions if bellwethers want to
demonstrate their market leading
position on a show.
Nevertheless, a regular assessment
of exhibitor costs and ROI is a
“must” and can prevent organisers
from facing bad surprises. As
the Domotechnica example
demonstrated, regular customer
satisfaction surveys do not provide
the necessary insights. The above-
mentioned exhibiting company at
Domotechnica had always been
“extremely” happy with the show,
with management stating only six
months prior to the show, that it was
a “huge asset for them” and a “must
attend event”.
It became obvious that the
company’s spend at the show was not
driven by internal ROI calculations
but by the desire to have a more
impressive show appearance than
its competitors. With the arrival of
the new CFO, costs of participation
became the critical focus. It is, clearly,
hard to defend a spend of €8m.
Organisers should, therefore,
assess independently – at least for
bellwethers or top spenders - to what
extent costs for the show participation
seem appropriate considering the
ROI. If necessary, organisers should
be prepared to intervene actively as
moderators of exhibitor spending.
Issue 4 2019
43