November/December 2010
Volume 30 No. 7

January-February 2011 Cover
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Virtual TV Trade Shows Coming Soon Near You

But traditional markets are on the rebound

By Dom Serafini

This business prizes relationships above anything else, including content. It’s not unusual for a TV outlet to acquire irrelevant programs just to keep relationships going. Conversely, a seller would reduce a buyer’s debt load with the distributor to foster the relationship for the long run.
It is because of the importance of personal relationships that TV trade shows, such as MIP, NATPE and the Asia TV Forum prosper. In effect, many medium-size and large program distributors keep sales offices in all key cities around the world; therefore, the need to meet in a far-away location would technically diminish if it weren’t for this thing called “relationship.”
The TV trade show business has indeed leveraged this “emotional” aspect, and it has evolved over the years into four key international markets a year: NATPE, MIP-TV, L.A. Screenings and MIPCOM, plus two secondary if specialized markets, such as AFM (for movies) and ATF (for Asia).

Some industry executives, though, consider these four annual appointments unnecessary, and six far too many. For others, however, especially those who don’t have foreign offices, the more gatherings there are, the merrier, even though each market has its cost and can be expensive. Invariably, all program distributors tend to pay personal visits to buyers, which they say effectively reduces the need for more program trade shows.

Trades

An additional factor has emerged with the advent of the Internet, which allows videoconferencing to conduct negotiations, streaming media to screen new programs and an abundance of information about new shows. The Internet, however, cannot create relationships, but can only foster them.

Nonetheless, due to the fact that the Internet exists and has taken such a big role in business, it is natural that it would come up with alternatives to the “brick-and-mortar” (real, physical or in-person) trade shows with “virtual” (or Internet-based) events.

Internet-based tradeshows were first talked about nine years ago. Today there are five major platform providers that develop virtual-meetings software, two of which are headquartered in California: Unisfair and ON24 –– this in addition to Linden Lab’s Second Life, which is consumer-oriented, and more than a B2B virtual event is a “virtual world.”

According to the Massachusetts-based Champion Exposition Services’ 2010 exhibitor trends survey, virtual events are gaining acceptance, with 24 percent of exhibitors surveyed finding them valuable and four percent very valuable, while 44 percent found them a little valuable and 28 percent not valuable.

In our case, a virtual trade show has to replicate the “feel” a participant experiences at a real event: Walking in the convention aisles; stopping for information at an exhibitor’s booth; the screening of a particular program and sitting down to negotiate the licensee fee.

From the exhibitors’ and visitors’ point of view, virtual trade shows mainly benefit companies with small traveling budgets; people that missed some traditional gatherings, and those who would rather look for an abundance of material on a single website, rather than take on the time-consuming task of searching through various companies’ sites.

From the trade show organizers’ side, associations tend to use the virtual format to set up shows that they otherwise can't afford. In addition, virtual trade shows can take advantage of a world-wide universe and reach below the top-strata that usually are allowed to attend in-person trade shows. Indeed, global reach is one of the biggest plusses of virtual shows. But there are cons. Naturally virtual shows don’t make sense for localized events. Networking opportunities are limited. There are no face-to-face meetings or serendipitous run-ins with customers. Participants can’t get goodies or go to parties.

On the other hand, the Washington DC-based Satellite Broadcasting and Communications Association (SBCA) stopped having its SkyFORUM trade show in the physical form two years ago, reportedly because attendance had dropped. It was revived virtually in November 2009. Produced by Unisfair, this year, SBCA’s virtual trade event was held November 17 and lasted from 11:00 am to 7:00 pm live, but remained available for 90 days to replay. It featured 12 conferences (webinars) and 15 exhibitors, such as DirecTV and DISH Network, which took advantage of packages that started at $1,500 and up. SkyFORUM was free to attend and 1,000 individuals paid a visit online and were able to download product info and see demos. For questions after the live segments, attendees were able to contact exhibitors via e-mail. A tracking system within the platform allowed exhibitors to see who visited and if they repeated. The official language was English, but there was a translator system for visitors who speak other languages.

Another TV-related virtual show was organized last January 20, by the Washington D.C.-based National Association of Broadcasters, called “DigitalVision 2010.” It utilized a platform from ON24 and offered 20 virtual exhibitors for a one-day visit.

Last year ON24 developed about 300 virtual shows, compared with 50 in 2008. Overall, in 2010 there were an estimated 700 Internet-based trade events worldwide.

According to ON24’s Mark Szelenyi, the world’s economic downturn helped the growth of virtual trade shows, and now that the economy is rebounding, organizations that are going back to physical trade events –– having experienced the advantages –– are incorporating a virtual element into their show. In this case the event is called a “hybrid,” and one such hybrid is sponsored by the American Society of Association Executives. The business model of hybrid shows vary: Some charge an extra fee to exhibit in the virtual environment, others use the virtual setting to entice exhibitors to buy space in the physical trade show. Plus, virtual show organizers can offer, for an extra fee, online booths with the opportunity of live chat. The virtual trade fair can also provide live interaction on a one-to-one, one-to-few, one-to-many and many-to-many basis.

According to SBCA’s Amy Hager, the cost of putting on a virtual tradeshow can range from $40,000 to $100,000, excluding the cost of marketing. ON24’s Szelenyi explained that, on average, one can calculate costs as $30 per visitor or $25,000 for a five-exhibitor virtual event with one-day live show and a three-month replay. Naturally, the number of exhibitors, the amount of information, the duration of the live event and the length of the replay all have an effect on costs.

A platform provider needs 12 weeks to set up a virtual event. Participants have to simply provide all the necessary information online.

The market for technology companies that develop virtual shows is now estimated at about $100 million per year.

As a case study there is the 2008 event staged by Cisco, a San Jose, California-based technology company that decided to transform some of its internal gatherings into virtual trade shows called “Cisco Live Virtual.” The cyber version came with a two-tier business model: The free, limited access and the Premiere Access, which cost $395 (about 19 percent of the registration cost at the real show).

But, after all is said and done, traditional trade fairs remain the industry’s bread and butter. According to the Massachusetts-based Champion Exposition Services’ 2010 exhibitor trends survey, 51 percent of exhibitors surveyed indicated that they’ll participate in more trade shows when the economy recovers, while 36 percent plan on sending more staff to trade shows. About 24 percent will increase exhibit square footage and 23 percent will increase advertising onsite/at show.

Trade shows remain a very significant part of the marketing mix and 62 percent of exhibitors report that trade show expenditures represent more than a quarter of their marketing budget – including 28 percent of exhibitors who indicated trade shows represent more than half of their marketing budget. While collecting leads (79 percent) and creating brand awareness (75 percent) are the top goals, exhibitors pursue a range of other goals as well with 21 percent seeking the immediate return of selling. Also 33 percent of exhibitors use trade shows to launch new products.

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