My colleague Barb Pellow wrote very eloquently about the value trade shows like Graph Expo have for attendees from a business, educational and networking perspective. I spent some time talking to several executives from the supply side who echo the value the value of trade shows that Barb pointed out but offered a slightly different perspective, especially as it relates to the frequency and configuration of the shows in our industry. I also spoke with Ralph Nappi, CEO of GASC, the show company for Graph Expo, to get his perspective on this issue.
One thing that was very different at Graph Expo 2010 as compared to previous years was the dearth of offset presses. Vince Lapinski, CEO of manroland North America, said, "Having machines running makes the show exciting, and I understand that. But it just doesn't have a payback for us anymore." manroland, with its North American headquarters in Chicago, has not had presses at the show since Print 05. Lapinski adds, "Granted, it is harder to get people to come to your booth without running equipment, and that is the tradeoff. But we use Graph Expo as a platform to show off our technology from an automation and services perspective." manroland offers show attendees who wish to see presses in action the opportunity to visit its local demo center outside of show hours, and a number of attendees have taken advantage of that opportunity. "This approach has been effective for us," he adds. "The ROI to set up a large press for four days and then dismantle it is simply not there."
GASC and show companies from other industries worked hard with McCormick Place and the City of Chicago to change the cost model for exhibitors, and to make the set-up and break down much more efficient and cost effective. GASC also offered a "stimulus package" that offset some of the exhibitor costs associated with the show. Their hard work made a difference in the costs suppliers incurred, and those efforts should be applauded. Yet many suppliers would like to see even more changes. Clearly, I was not able to speak with all 500 exhibitors at this year's show, and this article does not reflect everyone's opinion. But I have heard enough comments on this topic from exhibitors at this show and others, especially this year, that I believe it bears discussion. Please join the conversation by sharing your comments using the comment feature at the end of the article.
Are Silos Obsolete?
Fred Rosenzweig, President of EFI, finds the current proliferation of shows burdensome for his company. He says, "With our diversified business, we end up going to nine or ten fairly good-sized shows a year around the globe, plus Connect, our users' group, and smaller regional events and open houses. That is a huge investment for us, in the multiple millions of dollars, funds that could perhaps be better applied toward research and development that would bring more innovation to the market." EFI typically invests 25% to 28% of revenues back into R&D. Rosenzweig continues, "Trade shows are still important in our industry. They can bring in people that normally don't get to see us, resulting in surprise visits for us as well as existing customers who are surprised by the range of our product offerings. The problem is the number and proliferation of trade shows and the ROI (or lack thereof) on that proliferation. If you look at deals for printers and MIS applications that are signed at the show, we make the investment back. The question becomes whether you would get those sales anyway."
Rosenzweig suggests that while consolidation has driven down the number of printing establishments, the number of trade shows has increased. He says, "GASC has Graph Expo; Tarsus puts on Label Expo; you have Questex with On Demand. And there are several grand format shows, including SGIA, ISA, and now FESPA picking up Graphics of the Americas. That is just in the U.S., and we have to operate globally. The model is not sustainable."
Richard Barham, Vice President of Inkjet for Agfa, adds to the discussion, saying, "We see a big consolidation in the technology platforms across all of the different exhibitors. If you look at what you see at Graph Expo and what you will see next week in Las Vegas at SGIA from Agfa, EFI VUTEk, HP, Canon and others, you will see the same work force and the same products one week later in another part of the country doing the same job all over again. From an industry point of view, the costs are unsustainable and the lack of focus becomes a challenge. The industry as a whole would love to have one major exhibition in the spring and one in the fall in the U.S. If you look at the cross-platform nature of the industry today, the old idea of having an offset printing show or screen printing show is no longer valid. As the boundaries continue to blur, the exhibition industry has to start reflecting that fact by coming together logically to adapt to the way the world is in the 21st century."
From a Graph Expo perspective, Nappi points out that today's Graph Expo already reflects much of this consolidation and diversification. "There has been huge consolidation already," he says. "This includes mailing and fulfillment, newspapers, packaging. The mailing shows barely exist anymore, and all of the packaging shows except Label Expo as well as the regional shows except Graphics of the Americas are basically gone in the U.S. Those needs are being met by Graph Expo. Our big success with newsprint can be attributed to the fact that NEXPO is gone now. People forget that there has already been huge consolidation and it will continue. But I can't stand here and tell you publically that shows like SGIA, ISA and On Demand will be gone. What I can tell you is that the NPES and GASC boards are engaged in a strategic process to decide where they are going in the future, and Graph Expo is part of that discussion. The decision about the frequency of the show shouldn't be played out in blogs but should be played out with the associations, their members and their boards. We had 500 exhibitors here this year and well over 10,000 attendees, although it is too soon to give you exact numbers. At Print 09 last year, we had over 10,000 companies that attended the show with one or more representatives from each. Whether future shows look, smell and taste like our current Graph Expo is part of the ongoing discussion. If there was anything consistent about this show, it was the fact that the show is continuing to evolve and change. Co-locations, like the international newspaper group, the G7 Summit, and a number of users groups want to come back and want more space. Skip Henk of Xplor has indicated Xplor will be back. All of these dynamics will help us decide what we do with the show as we move into the future." Nappi also stated that Heidelberg and many other exhibitors have already committed to 2011 and that Heidelberg will be back in its front row location in 2011. "Several years ago," he explains, "we established a point system that is based on frequency of exhibiting at the show, booth space, etc., in order to prioritize booth locations. Under that system, Heidelberg will be back in its traditional space next year."
So what is the answer? Executives floated several ideas that all of the associations and show companies should take into consideration, for their own future success as well as for the health of the industry.
Rosenzweig offered, "Graph Expo used to have three halls and tens of thousands of visitors. The size of the industry has gone down and the diversification within the industry has gone up. Flexo printers have offset and digital; offset printers have moved into grand format. We need to see the various show organizations come together and create, in our opinion, a couple of U.S. trade shows a year, perhaps spring and fall, East Coast/West Coast. Let them be big and let us bring what we want in terms of products and services. We don't need to segment anymore. And customers would benefit from this type of convergence. At Label Expo, we showed Jetrion. But maybe there are flexo printers that want to see other things we and other suppliers offer, things that could help them expand their businesses."
Presstek's Chairman, President & CEO Jeff Jacobson chimed in: "The fact that Heidelberg is not here at Graph Expo 2010 is telling. For us, it is kind of interesting to have had the only three offset presses that were running live, and that is not a bad thing for us. We are here because it is a good way for us to sell presses. This is one way to put it all together. But I certainly wouldn't be averse to shows moving to every other year. It is a big expense, no question about it. We would be willing to spend a little more on a consolidated show. To be candid, packaging and labels is not our focus, but we surely would encounter some customers from those segments that would find value in our offerings, particularly with the larger format and expanded capabilities of products like the 75DI. It could represent an incremental business opportunity for us and for them."
Lapinski echoed those thoughts, saying, "Grouping shows together to result in one strong, powerful show is what we want as an industry. Any vendor that would deny that is crazy. One WOW show is what we need as an industry. That would benefit everyone and would be a positive thing. It would bring more power to print and to the show. Shows are not really a sales event anymore, but rather a marketing event. We have to reach people that we don't already know."
Agfa's Barham would like to see even more diversification in terms of the types of attendees that could be attracted to a combined show: "There is a need to educate brand owners, retailers and other end users of printing and communications technologies on how the many technology advances in our industry affect their businesses and the opportunities they bring. We miss a huge opportunity by not including these folks in our shows and conferences in a meaningful way."
Timing is Everything
The supply-side executives I spoke with were definitely in agreement: There are too many shows and they are too siloed. As a result, all of the shows suffer from declining attendance. And the suppliers suffer from having to stretch both human resources and operating capital to have a presence at all of these shows. Rosenzweig pointed out that in the fall, a good portion of his marketing team is consumed for 35 days or more just with shows, taking focus away from other activities that might, in the end, have more value to the company and its customers.
Whether the answer is two large consolidated shows per year in the U.S. or one large consolidated show every other year, or some other configuration, certainly many of the suppliers would like to see the show companies collaborate to reduce the overall number of shows as well as the specialization of these shows. I also heard objections to holding shows on weekend days causing higher costs in drayage and other fees, with a strong preference for Tuesday through Thursday show days, although Nappi indicates he has not heard that complaint. Shows held during weekend days present many inconveniences for suppliers, not the least of which is the added labor expense of set-up and break-down during these overtime hours.
Rosenzweig points out, "Associations are supported by the manufacturers, and we are at a point where they don't want us to solve the problem, let me put it like that. If we solve the problem, it may be more painful than if they solve it themselves. We value the associations, we want to go to them and be part of the solution. We need them to recognize that the respective technologies are not competing against each other. We are competing against Internet, email , radio, TV, often perceived as more efficient communication devices than print. So we have to be really good at what we do, and we need innovation to make us more efficient. The show companies and industry associations need to realize that we are not competing against ourselves, and we will be stronger as a holistic industry. Printers can't afford the time and money to go to all the shows, either. Let's bring 100,000 people to a trade show instead of 10,000 or 20,000 and make the printing industry stronger, more cost effective and more efficient."
Agfa's Barham agrees, saying, "Trade shows are crucial. Particularly where you have rapid technology change, trade shows play a critical role in allowing our customers to actually see, feel, and get a first-hand sense of the technology. You can look at a brochure, but new technology needs human interaction. We are firm believers in trade shows, but there are just too many. If we could bring it down to one, we can do a far better job for the customer, bringing more products and more effectively explaining the technology and the business opportunities rather than spreading ourselves paper thin over a large number of shows."
Not Everyone Agrees
In an interview with WhatTheyThink's Patrick Henry, Xerox Chairman & CEO Ursula Burns said her company remained committed to yearly events at McCormick Place because people like to see Xerox's wares in the hands-on setting that a trade show provides. What's more, she said, Xerox welcomes the opportunity to be compared by showgoers to competitive vendors across the aisle. "As long as this is useful to us, we will be here," said Burns, but she added that Graph Expo's usefulness as a marketing venue isn't something about which her opinion could never change. "I ask the question all the time," she said.
Nappi concludes, "The key message from my perspective is this: how Graph Expo should be configured in the future is being discussed and debated, and the strategic process underway within GASC and NPES is the right way to go about it. We get input from all of our members. It is an industry event and the group will take into consideration the needs of the entire industry."
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