In a 10-year period that saw a technology boom, a stock market bust, terrorist attacks, strict new corporate accounting standards and pharmaceutical regulations, a recession, and finally, an economic rebound, theindustry has gone through a lot just to get back to where it was.
Indeed, the industry has come full circle since 1997 as the key indicators — attendance and number of exhibits — have returned to the levels they had reached 10 years ago, according to the Healthcare Convention Exhibitors Association's new study, a 10-year look at trends culled from data on more than 15,000 medical meetings.
On the positive side, healthcare shows make up about 23 percent of all conventions in the U.S., making it the largest segment, according to the CEIR Index 2006 Edition, produced by the Center for Exhibition Industry Research. In addition, growth in the medical sector outpaces all other industries. Nevertheless, although the industry is now as healthy as it has been in the last decade, the HCEA survey shows warning signs that could hurt its future growth.
Back to the 90s
In the late 1990s, the healthcare convention industry was riding high, according to the HCEA study, which analyzed data from medical shows of all sizes. (See sidebar, page 34.) The average professional attendance at a meeting was 1,932 in 1997, while the number of exhibits at the average convention spiked to 159 in 1998, up from 153 the year before. But the times were changing. “One of the things that we found interesting [in the study results] was that the decline was already well under way before 9/11,” says Eric Allen, executive vice president at Atlanta-based HCEA, which collects data on healthcare shows worldwide and produces online and print directories of medical meetings.
For the five years following 1997, attendance dropped or was flat, falling to a low of 1,637 in 2003. The number of exhibits followed a similar trajectory, gradually falling from a high of 159 in 1998 to 134 in 2003. “The dip was probably a combined effect of the economy and then of September 11,” says Allen.
During the next three years, how-ever, attendance and exhibiting rebounded, thanks in large part to a recovering economy. The average number of exhibits at healthcare meetings has increased 16 percent since 2003, reaching an average of 156 exhibits per convention in 2005, only to dip slightly to 155 in 2006. Likewise, attendance has climbed 15 percent since 2003, reaching 1,889 in 2006 — the highest it's been since 1997. As HCEA reports, the industry has essentially returned to the success of the late 1990s.
Large Meetings Boom
Over the years, the types of events that have shown the biggest attendance increases are very large meetings (defined by HCEA as those with more than 10,000 attendees) and large meetings (more than 4,000 attendees), while average attendance at small meetings (fewer than 2,000) has decreased.
Comparing average attendance in two three-year periods, from 1997 to 1999 and from 2004 to 2006, professional attendance at very large meetings grew 7 percent to 12,483, while large meeting attendance rose 8 percent to 7,290. Small meetings, which make up 74 percent of all healthcare meetings, saw attendance decline 2 percent to 468.
In terms of specialty, oncology/cancer meetings are the fastest growing of all disciplines, with attendance up 80 percent since 1997 to 1999. Family practice/primary care meetings have experienced a 74 percent growth in attendance since 1997, while attendance at geriatric meetings has climbed 57 percent.
Despite the forward momentum, there are some red flags in the survey that could produce challenges for both healthcare meeting organizers and exhibitors. One concern is that in 2006 the average number of exhibits per event dropped for the first time since 2002. The decline was small (156 in 2005 to 155 in 2006), but it caught Allen's attention. “Is it the start of a trend — or a blip?”
What is clear is that companies are scrutinizing their marketing spend more closely these days to get the best value for their dollar. “Exhibit marketing is under more pressure than ever before,” he says, “and that pressure is for data.” Data, he says, is what's driving marketing decisions today because it allows marketers to quantify the value of one marketing channel over the other. “What the industry is demanding now is quantifiable measurements for how effective exhibiting at healthcare shows is,” he adds.
One of the reasons for doing the study, says Allen, was to determine just that — the value of exhibiting. What the study found was that, when adjusted for inflation, a 10-foot-by-10-foot booth costs 6 percent less than it did 10 years ago. Also, the space-cost-to-professional-attendee ratio — which comes from dividing the cost of a 10-by-10 booth by the number of professional attendees — is 4 percent lower than it was in 1997. Not surprisingly, large meetings are a better deal than small meetings, as the space cost per professional attendee is just 28 cents for large meetings compared to $2.10 for small meetings. “I was struck by how economical it is to reach medical pros through conventions and exhibitions, when you compare those to other media,” says Allen.
But costs for material handling, labor, and hotels — to name a few — have gone up in recent years. If organizers can help control or mitigate the “other” costs, it would alleviate some of exhibitors' cost concerns, he says.
And cost is just half of the equation; the other part of it is return. While the meetings industry tends to take for granted that conventions are an essential part of the marketing mix, marketers don't always see it that way, says Allen. “There's a tendency on the part of convention organizers to just assume that exhibitors are going to always see the value of being there because they can't afford not to be.”
As medicalorganizers know, the regulatory environment has altered exhibitor methods. Exhibitors now have restrictions on giveaways at their booths, and booth conversations focus more on education than sales.
But whether exhibitors are focused on return on investment or return on education, convention organizers need to embrace measurement, he says. “We've got to be able to document that essentialness every year. Associations that do a good job of helping their exhibiting customers tell that story to their parent companies are the ones that will probably thrive in the years ahead.”
Exhibitors conduct their own measurements on everything from booth traffic to product conversations and interactions, says Allen. But they are now pressuring convention organizers for more data, such as the demographics on who is attending the convention and whether they plan to visit the exhibit floor. Many convention organizers are reluctant to give out that information, in part, he says, out of fear that it might reveal that a smaller percentage of attendees are visiting the exhibitors than they would like. But exhibitors, feeling the pressure from marketing executives, need that information to justify participation in the show. Without it, many exhibitors may assume the worst, he says. With it, the exhibitor might be pleas-antly surprised at the numbers. If not, they might be more amenable to working with the show organizer to boost traffic.
Another warning sign in the study relates to the increase in square footage of exhibit space used. Over the past 10 years, the number of exhibits has remained essentially flat, yet, comparing averages in two three-year periods, from 1997 to 1999 and from 2004 to 2006, the square footage of exhibit space used has increased 26 percent for large meetings and 28 percent for medium-sized meetings (2,000 to 3,999 attendees). “What that means is the associations are selling more space, but to more or less the same number of exhibitors,” says Allen.
That's partly because of mergers and acquisitions. Companies are getting bigger, thus buying more space for their booths. The other factor is organizers have become better at selling the space.
Allen cautions organizers not to be too dependent on large exhibitors. “Every organizer needs to know what their tipping point is — [the point where] when they have so much invested in any single customer a loss could be catastrophic for their show.” He doesn't think the industry is in any imminent danger, but if the trend continues and massive exhibit floors are filled by the same number of exhibitors (or even fewer), it will become unhealthy. To a certain extent, that trend is what happened in the information technology business, where some major trade shows toppled under their own weight after large exhibitors pulled out following the technology stock bust.
To offset the risk, medical trade show organizers should broaden their search for exhibitors, looking into industries they may not have tapped before, such as biomedical and technology companies, Allen suggests.
Another challenge is attendance. While attendance has steadily increased since 2003, it isn't quite back to 1997 levels. Two big obstacles to boosting attendance are cost and online CME, which are interrelated, says Allen. If travel costs continue to rise to the point where healthcare professionals don't see the value in attending meetings, then they will get their CME credits online.
“Meetings are still the best way for healthcare professionals to get their continuing education because they are away from the distraction of their practices, and they can get [a number of credits] during a short period of time. Then, there's all the other informal education that takes place through networking,” says Allen. “But online CME is certainly a trend that bears watching,” he says, because it is cost-effective and convenient. (According to Medical Meetings' most recent physicians' CME preferences survey, doctors still earn the largest percentage of their credits — 32 percent — at out-of-town meetings; and they earn only 7 percent of their credits online. However, according to the Accreditation Council for CME's 2005 data report, the number of online CME activities offered by providers jumped 19 percent from 2004.)
And while eCME cannot replace the “robustness of a live event,” that robustness is not easily quantifiable, says Allen. “You don't get CME credits for those five hallway discussions.” Even if a physician skips a meeting once every two or three years to get credits online, that can affect attendance. There's also a push in the CME profession away from one-time meetings — which are not considered the most effective way to change physician behavior — toward self-directed education, such as performance-improvement activities, where doctors track and evaluate a specific practice area. Nevertheless, Allen says, the medical convention industry has to “do everything we can to keep meetings the No. 1 most cost-effective — and plain most effective — method for earning CME.”
Despite all the challenges ahead, Allen believes that the industry will flourish if it proves its value to both attendees and exhibitors. “The healthcare convention industry has a very compelling story to tell and we need to tell it,” says Allen. “If the industry can rally around the idea of quantification, then we have no direction to go but up. But if the industry sticks its head in the sand and refuses to go through the discipline of quantifying its own performance, then I'm not so sure.”
Vegas Is Doc City
Las Vegas wasn't a top medical meetings destination 10 years ago, but now it reigns as the most popular venue, according to the Healthcare Convention Exhibitor Association's industry trends report. It's also the fastest growing medical meeting site, hosting 145 percent more healthcare conferences in 2006 than it did in 1997. Chicago has 35 percent more medical meetings now than it did in 1997, while Orlando and Atlanta have 28 percent and 23 percent more, respectively.
It's worth noting that New Orleans, usually among the top five destinations for medical conferences, hosted only 20 meetings in 2006 because of Hurricane Katrina.
About This Survey
To produce the 2007 Industry Research Report on Healthcare Meetings and Exhibit Marketing, the Healthcare Convention Exhibitors Association, Atlanta, analyzed the statistical information it has collected during the past decade from about 15,000 medical meetings of all sizes, from fewer than 100 to more than 10,000 attendees, held throughout the United States. All data is self-reported. In addition, HCEA did comparative analyses using reference data from U.S. government or industry sources. HCEA plans to conduct an update every year to measure trends on a year-to-year basis. Copies of the report can be purchased for $995. For details, visit www.hcea.org.