Are Marketing Dollars Shifting? Exhibit Industry Down 12.5%

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In 2010, HubSpot decided to give up booths and tables
at trade shows as part of its lead generation strategy. Trade shows have long been a standard annual budget item for B2B marketers as a way to get face time with potential customers. However, new data suggests that this tradition is fizzling out.

Research from the Center for Exhibition Industry Research recently reported
a 12.5% decline in the exhibit industry in 2009. This decline is up significantly from 2008, which only saw a decline of 3.1%. Overall, the Center for Exhibition Industry Research index has declined for seven straight quarters.

Where Is the Money Going?

A recent Duke University’s Fuqua School of Business and American Marketing Association (AMA) study suggested that social media spending will be nearly 20 percent of marketing budgets by 2015.  The dollars to support social media marketing growth have to come from somewhere right? It is likely that money is being taken from trade show budgets as well as other forms of outbound marketing and being moved to online marketing efforts.

Why Is This Happening?

Trade shows work for some companies. The bigger question is, do they work more effectively than other marketing tactics such as inbound marketing? Trade shows can be extremely expensive. By the time a company pays for exhibition space, employee travel, giveaway items, etc., the costs quickly add up. In addition to the expense, many companies don’t have the clear processes in place for measuring the return on investment of trade show dollars. Much of the appeal of online marketing is the data that can be used not only to understand ROI but also to improve future performance.

Shifting Marketing Dollars by the Numbers

To better illustrate why these dollars are shifting, it is important to understand how costs scale. Let’s say that you lead the marketing efforts for a company that has traditionally had an annual trade show budget of $100,000. If we look at the decline of the exhibit industry in terms of one company’s budget, then let’s take the total approximate 15% decline from 2008 and 2009. That means your company took $15,000 out of its exhibit budget to spend on other marketing activities.

So in 2010, your trade show budget is $85,000 and you now have $15,000 to spend on inbound marketing. In the world of trade shows, $15,000 may have covered your booth space for one event.

How could you spend $15,000 online?

• Spend $1,250 per month in pay-per-click advertising for a year.
• Develop a corporate blog.
• Improve search engine optimization for your corporate site.
• Develop landing pages and custom forms for your key products.
• Develop and launch a social media marketing program.

The barrier and cost of entry on the web is low. Above are only a few ideas of how $15,000 could be spent toward online marketing.

Have you reduced your trade show budget in order to support online marketing efforts?

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