Why events firms are spending less on ads
bengaluru — Organisers of conferences and trade shows are benefiting from a shift in the way marketing budgets are allocated, with companies spending less on advertising and more on events that allow them to connect directly with customers.
Research and advisory firm Outsell predicts corporate budgets for business-to-business events in the giant US market will grow four per cent to $28 billion this year, outpacing overall growth in advertising budgets of 3.5 per cent. London-listed Informa, UBM and ITE are among firms organising events around hot trends such as China’s baby boom or cyber-security.
“I don’t believe in trade magazines anymore. I don’t think anyone ever gets past the polythene. The magazine gets delivered but nobody ever opens it,” said Toby Roberts, whose firm Safety Media runs health and safety courses.
Speaking to Reuters at UBM’s IFSEC, Europe’s largest security event, he said: “There are few ways to get in front of our prospects [and] exhibitions are a great way to get as many people as possible.”
Safety Media, which has a £4 million turnover, spends half its marketing budget on this exhibition, which last year helped it get 380 leads. While the battle between traditional and online media outlets has grabbed headlines, companies are often sceptical that advertising with either translates into sales — hence the shift towards events that allow face-to-face contact with potential customers, competitors and talent.
“The reality is [other forms of marketing are] getting a lot more mysterious. If you have a marketing budget of a million pounds, half of it is wasted but you don’t know what half,” said Errol Taylor, an exhibitor at one of IFSEC’s sister events and CEO for the Royal Society for the Prevention of Accidents. The global events market was worth $25.6 billion in 2015, according to research firm AMR International, which predicts the industry will expand by about 4.6 per cent annually to 2020.
“The competition is for businesses’ marketing budgets,” said Charlie McCurdy, global head of exhibitions at Informa, whose exhibitions unit currently targets annual revenue growth of more than five per cent versus three per cent for the group overall. According to AMR, between 65 and 75 per cent of exhibitors at shows like IFSEC take stands every year and such events are highly cash-generative, allowing the likes of Informa and UBM to grow through consolidation.
Randy Giusto, Outsell’s lead analyst for media, advertising and marketing, said companies were increasingly focusing on online and exhibitions as a way of reaching clients. “We’re seeing marketing spending and advertising spending growth start to slow this year... but it is not as impacting on events, [which] scores relatively high on both regeneration and brand-building,” he said. —