It’s that time of year again! Time to pack up your flyers and tables, brief your marketers, and spend three days pitching people who happen to walk by.
Yup. It’s trade show time.
Of course, if you’re already feeling a bone-deep sense of dread, you may have realized what many marketers are beginning to understand–despite their longstanding popularity as a marketing tool, trade shows don’t work.
What if we said there’s a better option out there? That you can target exactly the customers your business wants for a fraction of the price?
No, that’s not a sales pitch. That’s basic economics, and it’s just one of the reasons why digital marketing is a better alternative to the same old trade show circuit. Here’s why it’s time to put your flyers back in the storage closet and let your team focus on digital marketing.
Key Elements of a Trade Show
Before we talk about why trade shows aren’t working for your marketing team, it’s important to understand the essential elements of a trade show–and why they aren’t coming together the way you hope.
The goal of a trade show (as an event, that is) is to offer in-person, real interaction with businesses. Attendees can make their way through booths and talk to vendors about their particular product and even see it in action or give it a try. Some people might be tire kickers without any interest in purchasing, while others might be ready to buy on the spot.
Either way, they’re able to speak with vendors in person. That’s good news for vendors, as you might get a customer that would never have otherwise heard of you. Plus, you get to work your pitch on them in person.
The Goal of Trade Shows
For vendors (i.e. you) there are several potential goals of trade show attendance, but they often boil down into two categories:
- Lead generation
- Brand awareness
A lead is a person who indicates interest in your brand, product, or service in any way, shape, or form. Someone usually becomes a lead after the business has had opening contact with them. Lead generation is thus the process of converting strangers into someone with an interest in your brand, intending to eventually convert and make a purchase.
Then there’s brand awareness, or the extent to which potential customers are aware of your brand and associate certain images, features, or products with your brand. You need brand awareness to generate leads, but widespread brand awareness is a long-game enterprise.
Trade shows (in theory, at least) can be helpful on both fronts since you get vital human interaction that cannot be found elsewhere.
Why Trade Shows Aren’t Working
While brand awareness and lead generation are important goals, the reality is that trade shows are not the right choice to help meet these goals.
To be clear, trade shows can help with brand awareness and lead generation–to an extent. But when compared to other options–like digital marketing, for example–the truth is that the benefits for lead generation and brand awareness are outweighed by the myriad costs and inefficiencies of trade shows.
Here are a few reasons why trade shows aren’t working as well as your marketing team needs them to, despite their relative benefits.
One of the greatest drawbacks of trade shows is extremely high cost-per-lead.
Cost-per-lead is a term borrowed from the lexicon of performance-based advertising, but it works well to understand the issue here.
In digital advertising, cost-per-lead is a middle ground between cost-per-impression, where a publisher is not rewarded or punished for how traffic performs, and cost-per-sale, where the publisher bears full responsibility for how traffic converts even though they have no control over their advertiser’s site.
Cost-per-lead, as the name implies, is a payment model based on the number of qualifying leads generated.
For trade shows, cost-per-lead refers to the lead yield relative to the amount of effort put into attaining it (i.e. resources, money, materials, man-hours, sales time). HubSpot stopped exhibiting at trade shows because of the cost-per-lead–the Hubspot blog generates more leads in a single day that a two-day trade show.
A Lot of Man Hours
More importantly, the HubSpot blog can generate those leads with far lower costs–including a far lower number of man-hours.
Let’s be honest: trade shows take a lot of work. You have to select your presenters, prepare your pitch, put your exhibit together, run through your goals, and ensure that your presenters have enough materials on hand for the trade show. Then you lose those presenters for the duration of the trade show.
All of their responsibilities get put on hold. They can’t perform regular work tasks and run your trade show booth at the same time–not if they want to see real results.
Once they’re there, they have to spend the entire day pitching people. Anyone who walks by could be a potential lead, so you can’t take the chance. But because your booth stays in one place, you may not even see everyone who passes through the trade show, especially if your booth is in an out-of-the-way location.
Plus, even the people who walk by may not be interested in talking to you. They may need convincing. Trouble is, every other booth is trying to do the same thing, so people will eventually get tired of the same old story no matter who’s telling it.
In short: it’s hours of work for comparatively little return.
Return on Investment vs. Return on Objective
At this point, we should distinguish between return on investment and return on objective.
Return on investment and return on objective are the two main key performance indicators for trade shows. Return on investment, or ROI, is something you’re already familiar with–it’s a measure of how much revenue is generated relative to the cost of attending. Return on objective is more nebulous, measuring how participation helped meet non-sales objectives.
ROI is relatively easy to calculate. The formula is simple: Return on investment = (Revenue – Investment) / Investment.
Return on objective is harder. You need to know what you’re evaluating and what your concrete line of success is–otherwise, any degree of success can be considered a good day, even though the costs of attending and losing valuable manpower at the office are still high.
This is precisely why many companies struggle at trade shows. They know that trade shows are useful for soft, non-sale objectives, but they don’t know how to measure their success and they don’t know how to determine whether the cost was worth the relative success.
No Social Media
These days, social media is your first line of marketing defense. 223 million Americans use social media in 2019, and more than one in three social media users say they go on social media to find out more information about a brand or product.
So why is it that trade shows are lacking in social media?
There are layers of social media interaction happening at trade shows. There’s the social media of the trade show itself and the show’s host, then there are the social media of each vendor.
This adds another layer to the many responsibilities of your trade show attendees. Not only do they have to be ready and available to interact with people on the floor, but they also have to manage social media to try to attract more people to their booth.
Assuming, of course, that attendees are checking social media when they arrive, which they may or may not be. Picture a crowded conference center with thousands of people using the same internet connection or their data to check social media while also trying to browse booths and you can understand why.
Last but not least is the issue of presentation.
Trade show presentation has as many layers as an onion. There’s the booth itself, but the person manning your booth is just as much a part of the presentation as the materials decking out the booth.
This is where you run into a problem. If you’re like many businesses, you can’t necessarily afford to lose the people who should be there–senior marketing staff and product managers who know what they’re trying to sell and how to sell it well. So, you send interns or temps instead. After all, you can afford to spare them for a day or two.
But, as previously stated, senior marketing staff and product managers are the ones who know what to sell and how to sell it. Interns and temps are equipped to answer bare-bones-basics questions and hand out flyers, but they can’t do a deep dive the way your long-term staff can.
The net result is the same. The wrong person manning the booth can be just as detrimental to your success as a bad booth display, and you’re still sinking a relatively high amount of time and resources into a few leads.
By the Numbers
With that in mind, ask yourself: what does a trade show cost, by the numbers? What does digital marketing cost relative to what it brings in?
And which one is the more economical choice for your business in the long run?
These are important questions, especially if you’re trying to pitch a strategy shift to upper management with traditionalist tendencies. Here’s how trade shows and digital marketing stack against each other in concrete terms.
Trade Show Economics
Let’s say you have a trade show with 5,000 attendees, and let’s say this trade show spans over three days.
A company with a decent presence at the show (a 20×10 booth space) might get 100 leads per day requiring follow-up. For three days, that’s 300 leads. Not half bad, right?
Not so fast. Keep in mind that these leads require follow-up to further qualify them. That means your leads from the show will be whittled down, which could leave you with something in the family of 50 leads (just 1% of the trade show attendees, by the way).
Accounting for booth space, shipping, signage, travel costs, entertainment, and drayage, you’re realistically looking at an event cost of around $20,000, plus another $15,000 in staff time spent setting up the booth, manning the booth, qualifying leads, and closing down at the end of the show.
That leaves you with a total cost of $35,000, or $116 per lead. Go to 10 shows like this per year and your annual trade show budget is $35,000. Assuming that you have a gross margin target of 70%, you need to make $1,000 per sale (or $500,000) to make these shows revenue-neutral. Order sizes of less than $1,000 mean you’re losing money on attendance.
You can go cheap for a smaller booth in the back corner, but you’ll get fewer leads and lower lead quality. Spend a bit extra to attract more leads and your cost-per-lead shoots up, as does the necessary revenue required to make show attendance worthwhile (or, at least, not a loss).
Don’t forget brand impressions, if your goal is brand awareness. Brand impressions for trade shows aren’t overwhelmingly impressive either. Assuming that 30% of attendees who walk through the door are paying enough attention to your booth to make an impression, you’ll reach 15,000 people per year for $23 per lead.
Also, keep in mind that trade shows are the marketing equivalent of moon landings–you won’t know until after the launch has already come and gone whether your promotion works, and you won’t have enough rapid feedback to modify on the fly. So you could waste an entire three-day trade show on a promotion that doesn’t work.
Digital Marketing Economics
Now let’s take a look at digital marketing. For our purposes, we’ll keep it simple and focus solely on your website.
Let’s say you invested big in making an outstanding website, even hiring an outside contractor to outfit it for you. That total came out to about $200,000. Amortized over three years, this comes out to about $66,000 per year.
However, you also have to keep people on staff (or keep contractors on standby) to manage your website for you. Let’s assume you keep three people on staff for this purpose, managing content and technical infrastructure for a total annual cost of $150,000. Let’s also say that you spend about $15,000 per year on SEO (after all, you’re willing to invest big).
Your code isn’t eternal, so you’ll have to pay for ongoing coding and contract design to ensure graceful aging. We’ll assume you invested in good-quality work and that cost comes out to about $40,000 per year.
This brings us to a total of $271,000. Deep breaths everybody.
Let’s assume that because you have $271,000 on hand to spend on your website each year for development and maintenance that you’re a decent-sized company with a respectable following, maybe an average daily traffic of 700 visits with 2% conversion rate to leads and 1% conversion to purchases.
Annually, this means:
- 255,000 impressions
- 12,775 leads
- 6,300 purchases
With an annual cost of $271,000, this gives you:
- Cost per impression: $1.06
- Cost per lead: $21.31
- Cost per sale: $43.01
Assuming again that you have a gross margin target of 70%, you would need a break-even cost per sale of $61.44, or $387,000 annually.
Not only is the brand impression cost for digital marketing far lower than trade shows ($1.06 to $23, anyone?) but you have a far higher volume of leads and the quality of those leads is better since visitors find your site by looking for something that you specifically offer.
Why Digital Marketing Can Do Better
The numbers don’t lie, but the question remains: why does digital marketing perform so much better than trade shows?
The truth is that while trade shows have the benefit of in-person interaction to hold over digital marketing, the truth is that the reach and specificity of digital marketing greatly improve your performance. Plus, digital marketing offers ways to give the same effect as an in-person interaction, and quickly learn whether a strategy is working or not.
It doesn’t matter whether you’re using pay-per-click lead generation, Facebook lead generation, or one of the laundry list of other digital marketing strategies. Digital marketing offers marketing power that trade shows can’t match. Here are a few reasons why that is.
Once upon a time, social media came into the world to bring people together. And while social media has evolved in the past several years, it’s still the best place to bring together people from far-flung locations.
Your website is the same way. You no longer have to rely on customers who pass through your store by chance–now, you can reach anyone with an internet connection, provided that you use the right tools to ensure your site appears when they go searching.
Targeting Your Ideal Customers
This is also an area where digital marketing trumps trade shows every single time.
The benefit of trade shows is in-person interaction. There’s just one problem: you can’t filter the people coming through the door to ensure they’re the right fit for your business. You won’t even know if every person walking by your booth is a lead, or that every potential lead at the show makes their way past your booth.
You just have to try them all and hope for the best.
Digital marketing is built on the knowledge that this type of free-for-all marketing is unsustainable, inefficient, and wildly impractical. That’s why you can target your customers with incredible specificity.
Take Facebook ads, for example. The power of Facebook advertising is the level of refinement in your targeting–you can target 40-something married, childless ex-pats living in Madrid with an interest in soccer if you were so inclined.
Better still? You can be just as specific with other forms of digital marketing. That way, you never have to guess whether someone coming to your site is a potential customer–you’ll know that they have the potential to become one.
Of course, digital marketing goes deeper than targeting. Unlike trade shows (i.e. marketing moon landings), you don’t have to wonder whether your strategies are working–you can check your performance in real-time.
You can use analytics tools on social media platforms, SEO analytics tools like Google Analytics, or any of a laundry list of tools. All of them provide you with the same thing: concrete numbers showing how your campaigns perform and who is converting relative to how much a campaign is spending.
That way, you’ll always know whether your campaigns are reaching the right audience. And if they’re not reaching the right audience, or not converting at the level that you had hoped, your marketing team can make edits as you go to get the campaign back on track.
Ready for a Smarter Marketing Strategy?
If you’re like us, you know that marketing to everyone isn’t the answer your business needs to stay competitive. You need to market smarter, not harder. And that means it’s time to let your competitors worry about trade shows–you can outperform all of them with digital marketing.
Even better news? You don’t need to spend years learning the art and science of digital marketing to see the results we discussed. You just need the right set of experts in your corner. That’s our cue.
We know the power of digital marketing. More importantly, we know how important it is to match your marketing strategies to your business. That’s why we’re not just a marketing service–we’re your business partner, and we’ll work with you to develop a strategy that truly helps your business grow.
Ready to see what your business can be? We’re ready to make it happen. Pull up a chair and start the conversation.