Lighting trade shows are critical for the exchange of new product and technical information, but the expense for exhibitors – and the growing list of events – has left many wondering if it has become too much. By Cindy Foster Warthen
[dropcap style=”letter” size=”52″ bg_color=”#ffffff” txt_color=”#1e73be”]F[/dropcap]or any lighting industry professional – whether you are an engineer, a leading lighting company, designer, or a student – attending relevant trade shows and conferences to learn about the latest technologies and product advancements to help further your education and awareness is vital. However, who really pays for the price of that knowledge and how does one decide how many and which shows to invest time, money, and energy in?
With lighting trade shows considered the largest effective method for providing the critical exchange of new information, educational training, and ideal networking opportunities, there comes a major price tag. As the industry is constantly evolving, so has the scale, size, and format of these events. Manufacturers can now choose from week-long expos, local lighting representative showcases, and targeted one to two-day regional shows. Each of these generate sizable expenses for the participating manufacturers.
With the passing of each new year, the marketing departments of companies across the industry evaluate their annual budgets. For many lighting manufacturers, trade shows are an enormous expense that can account for 25 to 35 percent of the budget. Since manufacturers may allocate anywhere from 5 to 25 percent towards industry shows and events, it’s not uncommon for the Chief Financial Officer (CFO) to ask, “Why are we participating in Show XYZ?”
It’s a valid question — and one that should be asked every year. Armed with a variety of measurements and metrics, many companies struggle with identifying the ROI and managing/controlling expenses as well as identifying which non-residential shows they need to participate in.
At what cost?
Trade show displays are expensive. The investment a manufacturer makes in exhibiting at trade shows is based on numerous variables. Companies are minimally required to invest in the display, the show space, transportation, labor, literature, airfare, hotels, meals, and often client entertainment. These numerous expenditures can add up quickly.
Let’s say a manufacturer purchased an $18,000 inline display (10′ x 20′) booth, and then assume the company participates in four trade shows a year. Now, take the average cost per event including show space, literature, airfare, hotels, meals, entertainment, transportation, and labor. If the company is somewhat frugal, it will still minimally spend around $25,000 per show for that 10×20 space. Multiply this by four shows annually and the investment is $100,000. But the costs don’t stop there — these expenses are considered the “cost to exhibit” and do not take marketing expenses into consideration such as pre-show promotions, client entertainment, and lead follow up.
In surveying an array of lighting manufacturers and sales agencies, the top non-residential shows that made these companies’ priority list included the following for a variety of reasons. The list comprises everything from one of the commercial lighting industry’s oldest and largest shows to smaller regional shows that are hosted by independent design associations or local sales representatives.
|LED Specifier Summit
|IES Events (local chapter events)
|Local Representative Agency Shows
How Does a Company Determine Which Is Best?
The Traditional Format
Lightfair is the industry’s oldest and longest-running show in North America. Over the course of its 27-year history, Lightfair has become the go-to event for non-residential lighting designers in the U.S. and even draws attendance from overseas. The show has grown exponentially each year, attracting 27,939 registered attendees in 2017. The exhibitor side of the house is expected to reach 500 exhibitors next year in 200,000+ square feet of exhibit space.
For some manufacturers, this is a “must” event and for others, it’s a secondary option to more preferred show formats. Many of the industry’s larger and leading manufacturers tend to use Lightfair as a multi-purpose event beyond the trade show floor for customer entertainment and agency training due the considerable expense and corporate investment. However, an increasing percentage of manufacturers have stopped participating in these larger standard industry trade shows and have opted to participate in smaller regional shows.
Are Regional Shows the New Star?
Multi-day shows hosted by regional clubs, industry associations, or by a variety of trade publications are a growing market that has been gaining traction over the last several years. These events include LightShow West, Boston Lights, LEDucation, Strategies in Light/The LED Show and the LED Specifier Summit Series to name a few. They tend to have the same format as the larger shows – with a trade show expo and educational sessions – but are targeted to draw a specific regional audience based on location.
There is also a growing trend for shows targeting specific verticals such as Healthcare, Hospitality, Education, Workplace, and Residential Design. Innovative products and services that aid in the design of these types of facilities and have a direct impact on their design and construction can be seen at shows such as Healthcare Design Expo, Design Connections, and others.
Most events today find it mandatory to host a variety of educational sessions to draw and increase attendance for those seeking AIA or educational credits. This inclusion tends to ensure the draw of local architects, lighting designers, and students into the venue and hopefully to the trade show floor. The specific exhibitor format for these regional shows and association events can even the playing field for the participating manufacturers by having limits on space allocation and setting stringent rules regarding the size of displays.
Some manufacturers responded to enLIGHTenment Magazine’s inquiry that they prefer the local regional shows and association meetings/tabletop events over the larger, more traditional format. Typically, at shows such as Boston Lights and LEDucation, you won’t see island exhibits, but you will see pop ups, tabletops, banner stands, and lightweight hybrids. Historically these events were originally created as tabletop shows to allow all exhibitors to be viewed equally by attendees. However, exponential growth and management changes may have caused the original intent to diminish as many of the tabletops in the past few years have succumbed to lightweight hybrids and traditional 10×10 booths.
Most of these shows are hosted by local associations such as the IES local chapters or Designers Lighting Forum with exhibit fees that range from $500 to $4,000 per table depending on the event, number of days, and event management. Considering that the display investment can range from $200 for a basic banner stand with graphics to $8,000 for an upscale portable hybrid, manufacturers then must add the “cost to exhibit” expense such as shipping, labor, hotel stay, and meals into the equation. This means that the manufacturer can still be investing a minimum of $2,500 for the smaller regional show — even with the reduced footprint and exhibit expenses.
Sales Representative-Hosted Shows
There is a new player in the trade show midst: some of the larger manufacturers’ sales representative agencies now host their own trade shows to provide their customer base with a focused and controlled environment for their representative brands to showcase their latest products and to provide an ideal environment for client entertainment.
From the manufacturers’ perspective, they feel that these shows are well-attended because the agents are personally invested in the success. However, the manufacturers who spoke to enLIGHTenment Magazine indicate that there are often many additional costs beyond the normal “cost to exhibit” expense that they cover directly or indirectly.
The hosting agency asks each of the brands represented to participate. Typically, each manufacturer pays for their own exhibit and related expenses, and the overall show expenses are solely incurred by the agency host. However, there are now numerous shows where a major contribution from the participating companies is requested or required. According to manufacturers surveyed, these mandatory expenses can mean paying a portion of the catering fees, entertainment, and additional expenses to host the event.
With So Many Options, What Is the Industry Still Missing?
Manufacturers and agency representatives were asked by enLIGHTenment Magazine what they felt the industry is missing within the current trade show environment — and the responses varied. Some indicated that a few of the regional trade shows have not figured out a good value proposition to attract the ideal attendance to justify the cost of the event. Others felt the pressure of budget constraints make it too expensive overall to exhibit and indicated that the drayage companies, the unions, and the show organizers make it an unpleasant and wasteful experience. Then there were those who felt that the trade show environment was well-saturated and if it becomes too populated with shows, there will be diminishing returns for the participating manufacturers.
There are lots of reasons to participate in trade shows, but in the end, it all comes down to three things: the customers, the suppliers, and the competition. Does the investment – no matter what format – provide a return? That is the million-dollar question manufacturers must ask when evaluating budgetary spending towards trade shows.