Theindustry, buffeted by terrorist attacks, strict new corporate accounting standards and pharmaceutical regulations, and a recession, has rebounded, 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.
The healthcare convention industry went from riding high in the '90s, with an average professional attendance per meeting at 1,932 in 1997, to a five-year drop in attendance that bottomed out at and average of 1,637 attendees in 2003. The number of exhibits followed a similar trajectory, gradually falling from a high of 159 in 1998 to 134 in 2003.
“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. Thanks to a recovering economy, attendance and exhibiting rebounded, with the average number of exhibits at healthcare meetings increasing 16 percent since 2003 to reach 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.
What's Up, What's Down
Very large meetings (defined by HCEA as those with more than 10,000 attendees) and large meetings (those with 4,000 to 9,999 attendees) were the biggest winners, the study found. 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 (fewer than 2,000 attendees), which make up 74 percent of all healthcare meetings, saw attendance decline 2 percent to 468.
Exhibits, too, continue to take a hit. 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.
The Costs of Doing Business
Interestingly, the study found 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: 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.
Another red flag for the exhibit side is that, while the number of exhibits has stayed essentially flat over the past 10 years, the average square footage of exhibit space used in two three-year periods, from 1997 to 1999 and from 2004 to 2006, 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.
If the trend continues and massive exhibit floors are filled by the same number of exhibitors (or even fewer), it will become unhealthy, says Allen. 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.
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.”For more industry meeting news, click here.