Are Trade Shows Nearing the Brink?

The impact of the coming electronic marketing revolution

By Francis J. Friedman

When the history of the trade show industry is written, it will show that 1994 was the year that brought us a giant step closer to what could be called the compunication revolution--the uniting of computers and communications technologies.

History will also show that the compunication revolution posed a potential threat to the continuing financial and marketing health of our business and all related industries--from hotels to halls and busboys to CEOs.

In the last decade, corporate executives have learned that if they invest in computers and communication equipment and services, they can multiply the productivity of their workers. "More for less" is accomplished by using data systems to create, track and monitor the daily operations of business.

In addition, telephone, fax, modem, and on-line computer interactions all speed the rate and intensity of communications. The change in computing format from mainframe-based systems to desktop systems of interconnected PCs improve worker productivity and alter the structure of organizational life.

The exposition industry has historically relied on a series of presuppositions:

• Manufacturers cannot more easily bring their products to the customer.
• Customers can come to a central hall to see the manufacturers' products.
• Trade shows attract new, previously not found customers.
• Trade show selling is the most efficient and cost-effective way to sell.
• Trade show results justify exhibiting expenses.
• Trade show attendance is cost-justified.
• "All together at one place and at one time" is a compelling rationale for a trade show

Technology that will be especially critical to the future of the trade show business includes:

• CD-ROM
• Digital compression
• Videoconferencing
• Networks and multimedia
• Interactive file sharing
• Wireless computing
• Convergence and individual addressability

A machine that makes or records an original CD costs around $ 4,000. With one of these, a company can prepare individual CDs for each of its customers, specifically showing products of interest to that customer. And because a CD will hold a tremendous amount of information, the seller can include on the customized disc: catalogs, order forms, parts lists, maintenance and repair information, demonstrations, etc.

At trade shows, product displays are static. If customers can get a full demonstration of an exhibitor's product customized to their specific needs on CD, why do they need to attend a trade show?

Digital compression
Digital compression is a technology where information is converted to electrical signals in binary code and compressed into small electrical bundles for transmission over phone wires or onto fiber optic cable. The impact of digital compression is that the existing global phone system has become an international data network. For most types of information, given the current advances in digital compression technology, the existing phone networks are adequate to carry the majority of the digital signals with a fair degree of reproductive fidelity. In three years, with the increases in the sophistication of this technology, and the expansion of fiber optic cable networks, the speed and quality of digital signals throughout the world will be outstanding.

Videoconferencing
The use of digital compression technology has enabled the cost of on-line, real-time videoconferencing to drop and the quality of the interaction to go up. Conference room-sized systems are available today in the $15,000 to $20,000 price range and will allow participants on each end to see and hear the other, show documents to the other, and access computer files for sharing. The transmission is available over regular phone lines at the same cost as a phone call. Today, this service is good. Three years from now, the quality should be outstanding.

Telemanagement Resources International of Lake Wylie, SC, installs teleconferencing systems. Its clients have shown an average reduction in travel expenses of 18 percent. If a company has an annual travel budget of $100,000, and teleconference equipment costs $ 20,000, it would be beneficial to buy, because it would yield almost a one-year payback on the investment.

Teleconferencing relationships with vendors, including full-motion demonstrations of their products specially prepared for each customer's application--either on the teleconference or through a previously supplied CD--will further the question, "Why go to a trade show?"

Networks and multimedia
Local area network, or LAN, computing (also known as desk-top to desk-top communication) is one of the driving forces in the new compunications revolution. LANs also can be wired into WANs, or wide area networks, which link computers at different sites. A LAN network in a branch office, for example, can be wired into a larger regional network of many branch offices until there is an entire global network of interconnected PCs.

Information on a WAN can be available to anyone across the network. A simple example of this is corporate e-mail. This network capability makes it possible for a worker to work at his or her own pace and have access to necessary information on the network at any time, making the worker more productive and independent of time and location.

The development of multimedia software has made possible the network exchange of straight text or numbers as well as graphic information. On advanced networks, sight/sound and full-motion video can be shared.

Interactive file sharing
Interactive file sharing allows two people to work on a network and share computer files. With "work group computing," a networked group of people can share the same set of files at the same time and interact with them simultaneously in real time. The benefit of this is that each person can access the large amounts of information stored on his or her own company's network, as well as share information on each other's network.

Desktop videoconferencing takes interactive file sharing one step further. Personal computers can be fitted with special PC boards and cameras so that two people working on a network can see and talk to each other via their PC screens. They also can share computer or CD files and work interactively.

The impact of on-line videoconferencing or interactive file sharing for trade show producers is significant. Suppose a builder wants to find air conditioning or windows for his next major project. He can go to an on-line directory of vendors for these items, where each potential vendor shows him their products on-line, in full-motion multimedia, and in an application suiting him based on their computer files of similar past projects. They could also have him upload blueprints or a computer-aided-design file, and they could load their products into his design and give him a complete final cost estimate.

If all of this capability and custom service is offered on-line and without leaving the office, why would the builder want to attend a trade show? Why should he spend money and time going to a trade show to see a static display, interact with a salesperson and then have that person contact him with a cost estimate three weeks later?

Wireless computing
Wireless or portable computing offers the ability to travel anywhere in the world and still be able to send and receive information, without being connected to a hardwired network. In the next three years, the cost of wireless services and equipment will substantially decrease and quality services for wireless users will increase.

The impact is location-independent workers with more control over their lives. These new "virtual workers" exist only as nodes on the end of a network. They are not location-specific in terms of real estate. They operate from their network addresses. They are not clock-bound, as they are on the network and can access information at any hour. On the network, the doors are open 24 hours a day, worldwide, seven days a week.

How will show producers reach these people and convince them to come to one place at one time to see a display of exhibitors' products and services? What will convince them that the on-line files from exhibitors are not as valuable as being at the show? How will potential exhibitors be convinced that they should come to a show and not post on-line files of the merchandise they exhibit?

Convergence and individual addressability
Convergence may be the hottest topic in compunications today. It is the joining of the telephone, cable TV and direct broadcast satellite to deliver information and "programming" to a television set. One feature of convergence is the computer that manages the programming/information into the TV and the "intelligence" built into the delivery networks. Another feature of convergence is the "interactivity" between the set owner and the delivery network. The final feature is each set's own "address" that can receive programming sent specifically to that address.

RCA recently launched a satellite that broadcasts 150 direct channels, and all that's required to receive the signals is an 18-inch antennae and a special set-top decoder. The system will allow the user to order special services on a per-play basis on certain channels, including a library of movies that is available on-demand. Through the set-top decoder, the user places the order and creates a record for billing purposes.

This same system can be used to beam conferences, meetings, seminars and electronic product demonstrations to a specific "address." Therefore, a "national conference" could truly be national with no one traveling to a convention or meeting site. With phone links and computer links, these interactions can be two-way interactive between the "addressee" and the programming source.

For our industry, direct broadcast satellite conferencing could eliminate airplanes, ground operators, local labor, hotels, restaurants, tabletop displays, decorators and CVBs. An entire conference could take place in "cyberspace" or on the electronic highway.

Motorola is planning to launch a series of low-orbit satellites, starting in 1997. This system would be large enough to encompass the entire world with telephone coverage. Users will be able to send and receive phone calls from any location with this system and also fully interact by file sharing via a wireless computer/communication device. Files will be sent directly from the sender to a phone/fax/computer address.

Users will be able to work at their own paces, anywhere, anytime, and they'll have access to the files they need to get the job done. Vast databases and on-line services also will be available, making research easy from any location.

Trade show survival
Despite the power of new technology, trade shows will survive.

Today, the basic nature of our business is changing. We are no longer in the "bed and freight" business, but in the "face-to-face" information business. As part of the information business, we face new forms of competition that we haven't confronted before -- tough and well-financed competitors who want their share of the dollars currently going to expositions and meetings.

But trade shows will survive because humans still want to interact with humans. We need to meet face-to-face to "sense" each other and to see, feel and smell the merchandise. What will change domestically is this -- shows that are not able to clearly and convincingly demonstrate their reasons for existence will fail. The shows that survive will offer outstanding, clear-cut and cost-justified reasons for exhibiting and attending.

Today's market tolerance for a "soft" show is quite short. Exhibitors are under mandate from their CFOs to continue finding ways to reduce expenses and buy more marketing clout. The hint that a show has gone "soft" or that attendees no longer find the show attractive brings a very sharp review of the show.

In the future, we will see a continual tightening of exhibiting budgets. Marketers will extend their technological capabilities and increase their aggressiveness on domestic customer bases. Data based marketing will flourish and direct mail and marketing will move to a higher level of sophistication. With convergent compunications, the QVCs and home shopping networks of the world also will not be sleeping when it comes to direct, addressable, interactive marketing.

Preparing for the future
To compete as an industry, all segments of our business need to communicate. We must address the goals of providing high-quality facilities and service to our common customers. We need to work together to reduce the disincentives of using trade shows as a major marketing vehicle.

To compete successfully, we will need meaningful research about trade shows as well as reliable statistics about individual shows. Exhibitors are pushing for more accurate information about all marketing expenditures, and our industry is no exception.

We must develop electronic communication standards so that we can work with our customers on-line. An inter-industry council could be created to develop an on-line data protocol, so the industry could communicate electronically. It will take time to establish an appropriate communications protocol, and we should get started as soon as possible.

No matter what your role in the industry, we are in this together. The compunications revolution is moving forward at blinding speed. Technology is getting simpler to use and more sophisticated at the same time. The competitive threat is real. We still have time to make the necessary preparations, but we need to get started now.