The EACA, along with all other industry stakeholder associations, has been invited to participate in an Exhibition Industry Summit on October 6, 2011 in Irving, TX.

The invitation states that “the times demand unprecedented communication and collaboration among the organizations that represent all segments of the exhibitions and events industry.”   The invitation also states that “notwithstanding our excellent market position (as an industry)… we may be at a crossroads that will require some modifications to some long-held industry traditions and business practices.”

The hope here is that this event will be informed by the work of the Exhibit Industry Council, who, for the past two years, has endeavored to identify the concerns of our industry’s customers, the exhibitors.     At present, two Best Practice Recommendations have been developed to address the primary exhibitor concerns of cost control and event measurement and metrics.     While these Best Practices are not intended to be the final word on these subjects, we certainly hope that they provide ample fodder to start the conversation on issues that are near and dear to the hearts of the exhibitors.

Are there are other topics that should be addressed at this industry pow-wow?

If so, let us know and post your comments here.     Our commitment is to keep the conversation going and let you know the outcomes of the meeting on October 6.

The Exhibition Industry Summit is being hosted by ASAE (American Society of Association Executives), ESCA (Exhibition Service Contractors Association), IAEE (Int’l Association of Exhibitions and Events), and SISO (Society of Independent Show Organizers).

Back in March of this year, we posted Part 1 of this discussion topic and cited examples from President Obama’s Export Council, IAEE President Steven Hacker and from EDPA’s recent participation in Duesseldorf, Germany at EuroShop 2011.  In that blog I wrote, “If we want to be truly competitive in the larger global marketplace, it is going to mean change.”

Fast-forward approx. three months to last week at the JW Marriott in Washington DC, where the President and CEO of the Consumer Electronics Association (CEA) Gary Shapiro told the 10^th annual Exhibition and Convention Executives Forum (ECEF) that “the US exhibition industry needs to share innovation strategies to improve it’s competitiveness on the world stage.”

Looks like we’re all saying the same thing! But what can be DONE about it?

One thing seems pretty evident; if we’re not willing to challenge the tradeshow business model in the USA, there will be little growth, no real development and the status quo will bog-us-down in the end. And there will be an end…

Speaking for the EDPA, I can tell you that as an association we’re willing to go anywhere to have an open, honest (and civil) discussion about our industry’s model and how we can improve it to make it easier and more cost effective for the end-user exhibitor.

To this end, the EDPA Board of Directors has been invited to attend and participate in the Exhibition Services & Contractors Association’s (ESCA) Summer Educational Conference in Branson Mo. later this month. Not only will we hold our next quarterly board meeting there on Tuesday, June 28^th, but I will personally be participating in an industry-wide coalition panel discussion with my fellow directors from ESCA, IAEE, IAVM and SISO.

What are you willing to do to bring positive change to our industry?

The 2010 Federal Patient Protection and Affordable Care Act (PPACA) requires that healthcare exhibitors disclose the number of physicians to whom they give “gifts” and other transfers of value, which is also known as the National Provider Identifier (NPI) numbers.  The mandate to disclose NPI numbers is included in what are commonly called the law’s Sunshine provisions, which require the electronic disclosure to the Department of Health & Human Services (HHS) of any “payment or other transfer of value” given to a physician.  Being out of compliance with this law can impact decisions about exhibiting and sponsoring, which is why medical associations and their exhibitors are looking for answers now.

Important to know:

• The Sunshine provisions originated in a stand-alone bill, but were eventually wrapped into the overall PPACA.  The provisions require that healthcare companies disclose gifts and other items they give to physicians.
• One mandate in the Sunshine provisions is that healthcare companies report the NPI numbers of physicians to whom they give items of value.
• Healthcare convention marketers and exhibitors are asking the organizers of healthcare association conventions to provide the NPI numbers of their healthcare professional attendees, yet most healthcare associations are not currently collecting these numbers.
• Because healthcare companies must begin disclosing information on activities starting in 2012, it is critical that healthcare companies and associations work together to create solutions for the collection and reporting of NPI numbers.
• The implementation rules for the Sunshine provisions are expected to be released in October 2011.
  

For additional information on this topic click here <http://www.hcea.org/news/2011-0215-npi.asp> .

The Real Cost to the Trade Show Industry of Weight-Based Drayage

One of the principal reasons for the formation of the Exhibit Industry Council was to advocate for full disclosure and better control over exhibitor costs at trade shows and conventions.   Nowhere is this need more pressing than in the area of material handling (a/k/a drayage).    The cost of material handling is a huge source of frustration for many exhibitors, and poses a significant threat to all trade show industry stakeholders.

Drayage rates can vary by as much as 35% from show to show within the same city and the same convention facility.   Worse yet is the survey of drayage rates in several convention cities over the past 10 years.    Drayage rate increases over the past 10 years in these cities are three times the increases of the cost of labor, and more than four times the increase in the Consumer Price Index over the same period (source Tradeshow Week).   These rates have increased so dramatically, that in some cases, it can prove to cause the “trade show death spiral.”

Inherent Threat of Weight-Based Drayage

The trade show death spiral can be caused at shows that unabashedly continue to escalate material handling rates and charges.   Increases in material handing rates (along with special handling fees) have the same effect as those we experience with drastic increases in gas prices – demand goes down and customer frustration goes up.  Or, in the case of trade show drayage rates, exhibitors, who work on fixed show budgets, bring smaller and lighter exhibits to the show in an effort to maintain their presence.   Smaller, lighter displays result in smaller show footprints, a decrease in space sales for the organizer, and a decrease in weight – the primary revenue source for the general service contractor.   In addition, the smaller footprint accommodates fewer exhibitor products so the attendee has much less to see and experience on the showfloor.   This then leads to shrinking attendance – the ultimate result being a downward death spiral for the show.

Possible Solutions

There are forward looking associations and show organizers that are addressing the problem.   It has been noted on this site, as one of our Case Studies, that Pack Expo responded to this threat by taking their general contracting services in-house, and by making material handling charges a part of the booth space fee.   This move has proven to be hugely successful for Pack Expo.  Not only did the show curtail the death spiral of exhibitor downsizing, the show has experienced tremendous growth in recent years, along with a great resurgence in exhibitor enthusiasm.

Many automotive industry shows require their general service contractor  to charge for material handling on a time and material basis as opposed to weight-based charges as a means of keeping their show alive and thriving.   We hear that other events are considering this option as well.

Collateral Damage

The weight-based drayage model has another significant downside as well.   It’s the damage done to the collective psyche of the exhibitor customer, and their flagging enthusiasm for show participation.     Faced with material handling costs that are impossible to predict, or rationalize, the exhibitor can be led to presume that the association/show organizer and its general contractor are out to get them.   Stung by drayage rates and special handling charges that don’t make sense, or have no justification, the exhibitor, and their representatives, can be driven to a frenzy of mistrust that can border on hysteria.

Evidence of this was a recent discussion that took place on LinkedIn posted by a display builder.    This showfloor supervisor thought that the general service contractor was charging exhibitors for Empty Labels at the show.    He was so outraged that he posted his comment online.

After much online back and forth, and gnashing of teeth, the allegation proved to be completely false.   What really happened was that the service desk informed the showfloor supervisor (when he came to grab some empty labels) that they didn’t have a credit card on file for the material handling charges.   The supervisor mistakenly connected the request for a missing credit card with his need for Empty Labels and overreacted.

While an unfortunate misunderstanding, stories like that one are too often fueled by stories that aren’t as easily explained, or excused.  A couple of recent examples include:

•            “My client was charged special handling for their entire load as well and they were charged $146/cwt for special handling vs. the $111/cwt normal rate.  My supervisor talked to the dock foreman and he produced pictures of the back of the truck before they unloaded. The few items he referred to were not even booth property and did not get moved to the exhibit hall.  They were items owned by the driver!!”

•            “I exhibit at a show where the cost of drayage exceeded the cost of prepping and shipping the booth to the show, the cost of the I&D at the show, and the annual cost of storing the booth.”

The resulting damage from all of this, real or imagined, is the negative impression it makes upon our industry’s exhibitors – setting up a significant threat to their continued participation.

What’s Next?

It’s time that associations/show organizers take a serious look at this issue – particularly those that are seeing dramatic trends in booth space reductions.    Understanding that association / show organizers and general service contractors both need to make a profit, we encourage them to look for a new model for material handling that can better sustain long term growth.   Working with their general service we’re confident that solutions can be found that work for the organizer, the GC, and the exhibitor alike.      Whether it’s incorporating material handling into the booth space fee or changing to a time and materials basis, it seems clear that the time has come for a new approach.

We just hope that those changes come sooner than later.

In the March issue of Expo there is an article on exhibitors titled “Exhibitors Unload”.   While I think the article did a credible job on creating a focus on the plight of exhibitors as it relates to cost it made an unfortunate mistake which perpetuates a common misconception that many show organizers have.

In the section on “Cost Management”, the article states that “Torregroza was in the middle of negotiating a six-figure bill with a UNION that had yet to be resolved”.

I’m not sure what was being referred to here, but my guess is that the exhibitor was negotiating with the General Contractor.     I can’t think of a situation where an exhibitor would be dealing with a union directly, or receiving a “bill” from them.    If the exhibitor did have a relationship with the union, they wouldn’t be “billed” they would simply make payroll payments to those workers they employed.     If they received a “bill” it would have been from the GC, who employs union labor and then provides a service.     My further guess is that this “bill” was for drayage and probably contained some surcharges that are being questioned.    Unions are too often made the scapegoat for these complaints.

My hope would be that Expo would correct the error and make sure that the show organizers that read the publication understand that the unions don’t establish drayage rates for shows, nor do they have any influence on material handing surcharges.   In fact, show organizers have much more influence on the drayage rate that gets charged to their exhibitor than a union ever would.

In other words, that aisle carpet and those registration counters aren’t really free and when exhibitors complain about the cost of drayage it’s not the unions fault.

A few weeks ago our EDPA association exhibited at EuroShop 2011 in Duesseldorf  Germany. This was my first big international show (over 2,000 exhibitors in 17 halls and more than 100,000 attendees over 5 days). Of course I was blown away by the size and scope of the expo…no real surprise there. But EuroShop also got me thinking about what it takes to be a globally competitive tradeshow marketplace…

If we go back to our favorite tradeshow industry pie chart (and metaphor) it seems to me that a lot of our energy goes into how to get as much revenue as possible from the existing pie. Not enough of our work and focus goes into making (or baking) the pie any larger.

Last week, a handful of tradeshow industry associations and leaders urged President Obama to quickly accept a series of recommendations advanced to him on March 11^th 2011 by the President’s Export Council intended to repair failures of existing U.S. visa and entry policies that are preventing thousands of international buyers from attending U.S.-based trade events.

Chairman of the President’s Export Council and President and CEO of Boeing W. James McNerney recommended five priorities to the President designed to help U.S. companies compete globally including:

• Facilitate visa processing for B visa travel by establishing dedicated business windows at U.S. consulates, setting aside specific times for B visa traveler interviews and encouraging U.S. posts abroad to collaborate with American Chambers of Commerce wherever possible to assist small business owners to secure their U.S. travel documents.
• Streamline the visa interview and issuance processes by increasing the number of consular offices abroad, moving resources to those posts with the highest demand and waiving the interview requirement for low-risk cases.
• Work with Congress to reform U.S. visa and immigration policies to attract the kind of highly-skilled workers, entrepreneurs and innovators from around the world.
• Establish a Trusted Employer Program through U.S. Citizenship and Immigration Services to facilitate and streamline travel for employers with strong track records of compliance.
• Form an informal public-private working group to serve as a mechanism to improve transparency and increase communication between the Departments of Commerce, Homeland Security and State, other relevant government agencies, and affected U.S. companies and industry groups.

Citing the alarming and chronic problems that international business visitors continue to endure when trying to secure travel documents to visit U.S.-based trade events, IAEE President Steven Hacker wrote President Obama, “The United States is not losing the competition, we are forfeiting it. We are not even in the game.”

IAEE has been an early and outspoken supporter of the President’s National Export Initiative (NEI) which was launched in early 2010 with the goal to double U.S. exports by 2015.

What can the EIC and its founding member associations do to help? This blog page has been designed for discussion. Please participate and add to the dialogue.

If we want to be truly competitive in the larger global marketplace, it is going to mean change. Next month we will explore how our counterparts in Europe approach the tradeshow industry with their model. Stay tuned and stay involved.

The economy and ever-changing compliance responsibilities will continue to challenge healthcare exhibit marketers in 2011, as shown by a survey of HCEA members conducted in December 2010 to assess their convention marketing  plans for 2011.   According to the survey, 37% of  HCEA’s healthcare exhibitor members expect decreases in their convention marketing budgets in 2011, while 18% expect increases.

The study was conducted by Exhibit Surveys, Inc., and the results were presented at the 2011 HCEA Healthcare Convention Marketing Summit in January.  A similar study was conducted in December 2009, so it is possible to make comparisons between the two years.  For example, for the healthcare exhibitors who will increase their exhibit budgets in 2011, the increase will be by an average of 15 percent, which is down from 19 percent in 2010.  For those with expected declining budgets, the average decrease will be 18 percent, a change from 20 percent in 2010.

Other key results of the survey include:

•  Roughly two-fifths  (40%) of members plans to decrease the size of their exhibits by an average of 17%.

•  Almost a third of members (33%) plan to decrease the total number of conventions they participate in for 2011, while 29% plan an increase.

•  Two-fifths (40%) of members plan to increase their participation in regional and local events.

•  About a third of convention marketing members plan to decrease certain sponsorships and promotions.

The survey also assessed the perceived importance of critical issues faced by healthcare exhibit marketers including:

•  legal and regulatory compliance  – 97% ranked this with high importance (as compared to 82% in 2010)

•  cost containment  -   82% ranked this high importance (as compared to 94% in 2010)

•  booth traffic generation – 79% ranked this as highly important (as compared to 94% in 2010)

•  ROI/ROO – 72% rated this as being highly important (as compared to 78% in 2010)

What do all these numbers mean?  While the healthcare convention marketing industry is still fundamentally sound, it appears that budgetary pressures are the “new normal,” and results measurement will become increasingly important to help exhibitors make better investment decisions and justify their convention marketing programs.  For more information visit www.hcea.org.

Each year a large portion of a marketer’s budget goes to trade show participation.   Event managers pour over the show schedule for the year and try to piece together a business case for which show(s) to attend and why.

Getting our hands on hard and fast numbers from the show organizers would help in this decision-making process.  Making a business case for attending one trade show over another requires data that can demonstrate which shows provide the biggest bang for the buck.  The problem is that few show organizers audit their shows which presents a challenging task for the event marketer trying to sell his or her show plan to upper management.

Establishing validated event metrics exhibitors can use to compare the prospective marketing value of one event to another is a huge leap forward and would be a valuable asset in the decision-making process.

That being said, exhibitors should in turn provide the trade show organizers with their show results: hard and fast numbers.  The show organizers would then be able to evangelize successes in order to promote their show.

This type of give and take relationship keeps the wheel moving and helps everyone attain success.  Cost reduction and budget pressures are the new norm for exhibitors and exhibitors are competing more than ever with other marketing channels for budget.  If exhibitors and organizers don’t develop the type of open strategic partnerships where event data and metrics are shared, it will certainly limit the ability of exhibitors to make the case for trade shows to their management and likely negatively impact growth for organizers.

In case you hadn’t heard there was a news item in Meetings & Conventions that came across the wire this week regarding an alliance between ESCA, IAEE, SISO, IAVM and DMAI.

The CEOs of these organizations plan to meet at least twice a year to discuss opportunities for “joint cooperation.”        While I applaud any effort for industry associations to facilitate better communication for the purpose of improving opportunities and outcomes for trade show exhibitors, my hope is that these CEOs will also reconsider the invitations that was extended to each of them by the Exhibit Industry Council last year to participate in the development and adoption of Best Practices for our industry.    As of this writing, the EIC has not received any positive responses to that invitation.

In my experience, there is already a fair amount of communication, and joint cooperation,  between and among show organizers, facilities and general service contractors.    Our industry will really move forward in more positive,  “joint cooperation” kind of way once the coalition that plans to meet in Washington DC in June is also open to regularly planned communication with the customers of the trade show industry, the exhibitors, and the organizations that build and service their exhibit programs.

Our belief is that for any new industry initiative to succeed it must have the buy-in and cooperation of all industry stakeholders.     We look forward to the day when the members of this new alliance join the EIC to promote Best Practices that will provide the kind of cooperation that will lay the foundation for our industry’s future success.     Because when our exhibitor customers succeed, everybody wins!