What’s the future for technical B2B trade fairs?
For almost two years the Covid pandemic has been raging across the globe, with all the negative consequences that come with it, of which we are all too aware. One of the business sectors affected the most is the event industry. Had we hoped at the beginning of 2021, that the situation will ease, and physical events will return, we were unfortunately proven wrong. And 2022 does not look too promising either. Even hardened experts say that they have never experienced such a disruption in the event industry.
Let’s take “Messeland” Germany – one of the most important trade fair venues in the world – as an example to get a feeling for the impact the pandemic had on the sector. Trade fair venues in Germany were forced to shut down for almost 19 months between March 2020 and September 2021. According to a study, from Munich based economic research institute ifo from September 2021, this led to a 70 percent loss of turnover for the trade fair organisers in 2020 alone. 2021 has not been much better: as of the end of September, more than two-thirds of the 380 trade fairs planned for the year had to be withdrawn from the program. According to calculations by the Institute of the German Trade Fair Industry (AUMA), the overall economic losses, due to the cancellation of trade fairs in Germany since the beginning of the pandemic, amount to an incredible 43.5 billion euros.
Apart from the financial losses, there is also the loss of trust and confidence from exhibitors and visitors alike. There is no certainty for exhibitors for their planning up to the last day before the show. Many industrial companies have lost a lot of money this way recently. Visitors also don’t know if they will be able or allowed to enter the fair ground or to fly in from abroad at the date of the event. Overall, it has become a lot harder to convince people to attend a physical event.
How do B2B companies react to trade fair decline?
As an expert working in a B2B technical marketing agency, I am concerned about what this “fair erosion” means for deep-tech companies that have traditionally used trade fairs as one of their most important marketing and sales channels. Let’s look at some of the important electronics and industry fairs taking place in Germany as an example:
- Electronica 2020 was a scaled-down to an all-virtual event. The 2022 edition seems to be planned as mainly physical event for now.
- Hannover Messe 2021 was originally planned as a hybrid event and was forced to be held as a scaled-down, fully virtual edition only a couple of weeks before the event. The 2022 edition originally scheduled for April as a hybrid event has now been postponed until later in the year.
- SPS show 2021 in November was fully cancelled just 2 days before the event. SPS 2022 is planned as hybrid event.
- Embedded World 2021 was all digital, the 2022 edition has been postponed from February to June.
Trade fairs have been considered as one of the most important sources of new leads for many B2B companies operating in the industrial, engineering and electronics market. This importance is also reflected in the marketing expenditures of German companies in this sector. According to various studies, before the pandemic companies in Germany spent between 37% and 49% of their marketing budget on exhibiting at trade fairs. This strong focus on trade fairs has presented many companies with massive problems since the start of the pandemic in 2020. With physical customer visits being severely restricted in addition, alternative sales and marketing channels were build up in haste.
Digital content campaigns for the purpose of lead generation and virtual events or webinars have proven themselves here. Creating these and getting these off the ground in a way to effectively engage with existing customers and new prospects has turned out to be difficult for many companies for a variety of reasons. First, there are new skills and technologies needed to produce compelling virtual events. Second, companies need a lot of relevant content in a lot of different formats. And third, there is now an overload of webinars and virtual events targeting the same niche audiences which makes it harder to attract attendees for your virtual events.
Physical, virtual or hybrid?
In 2021 some physical trade fairs did take place in Germany, in compliance with strict distance and hygiene regulations and in much smaller size than in the pre-Covid times. Many virtual or hybrid trade fair and digital event concepts were created from scratch and sometimes at short notice – with very different levels of success. Although the trade fair industry has proven that it can react in an agile manner to an unprecedented crisis and establish digital events, not all concepts have convinced exhibitors and visitors.
This is confirmed by a BviK (Federal Association of Industrial Communications) survey on the impact of the pandemic on B2B marketing. According to the survey only about one third of the companies surveyed (179 on this question) rated the attendance of virtual trade fairs as good or very good. Twenty-nine companies said it was poor or very poor. Many of us have attended virtual events in the last two years that were mediocre at its best. Accordingly, the prevailing opinion (90%) in the BviK study was that digital formats will complement physical events in the future but not replace them.
Let me summarise it this way: The last two years have shown two things:
- Virtual events can do many great things we never thought they could before the pandemic and are here to stay.
- Physical trade shows remain a powerful type of B2B live communication but need to change dramatically to stay relevant and successful.
The future of trade fairs
As I am an optimistic person, I hope that the trade fair industry and exhibitors will see the current crisis as an opportunity for change. Now, change is possible at a pace that was largely unthinkable before the pandemic. This is how I think the trade show landscape will develop in the coming years:
- Visitor experience will be placed at the centre of the live event: Industrial fairs will be smaller in size and focus even more on the strengths of physical events by significantly enhancing the visitor experience, creating more opportunities for personal networking, and bringing the live experience of trade fairs to the fore.
- Trade fairs will become community-based platforms that enable exchange, experience, and business options 365 days a year – with the physical event as a highlight and opportunity for personal networking.
- Visitor data will become vital for any successful event format. Only with a relevant and marketable data set can fairs and other events serve as effective marketing and sales platform for technical B2B companies.
- Trade fairs will become content hubs. Only with highly relevant (digital) content for the target audience will trade shows be able to attract the right visitors and decision makers.
- New digital concepts: Event organisers and exhibitors alike need to carefully think about which formats work better physically and what can better be implemented Both visitors and exhibitors must be able to digitally prepare and extend their appearance/visit in a meaningful, effective, and engaging way.
- Due to global competition and digitalisation, there will be less globally relevant shows, but more highly focused vertical local shows.
I guess we all agree that a return to continuous pre-Corona growth and the industry-standard splash with ever-larger areas and visitor numbers is probably difficult to imagine in the future. However, it is also too early to dismiss trade fairs altogether, on the one hand due to their enormous economic significance, and on the other hand, because physical fairs still offer some things that are, so far, difficult to present – even with the best virtual events. At the end, visitors needs and preferences will decide on which trade fair concepts create the best overall experience and therefore will survive in the future. No matter if physical, hybrid or virtual – I hope to meet some of you at compelling industrial, engineering and electronics events in 2022.