The new corporate event: think globally, do business locally?

[Events spending over the last three years; click the image for a larger version.]

Yesterday, one of our customers asked us to look at some trends in events spending -- that is, conferences, shows, and private business get-togethers -- so I thought I'd share the results with readers. While the data isn't conclusive, it does show an interesting divergence.

The big question was, how have US companies changed their event spending over the last few years? Well, the chart above shows you the answer using our Blackfriars Marketing Category Indices. What's a Blackfriars Marketing Category Index? It's a measure of spending that compares quarterly spending on a marketing category against the same spending in 2003. The 2003 value is artificially set to 100, you can just add a percent sign to a Blackfriars Marketing Category Index, and you'll know how that quarter's spending stacks up against one 3 years ago.

Now there are two numbers on the chart: a budgeted value in blue and an actual value in red. The budgeted number is, as its name suggests, the amount that senior executives budgeted to spend in a quarter. And that means that the actual number is, you guessed it, the actual amount they did spend. The interesting bit about this chart is that actual spending on events was above the budgeted values in 2005, but then dropped to less than half of budgeted values in 2006. Those actual values also were below the 2003 level for three out of four quarters too. Our conclusion: companies got a lot more cautious with actually spending their events money. And this makes perfect sense given the overall decline of marketing budgets at the start of 2007.

But you know what? This seems to line up pretty well with what we're anecdotally hearing in businesses. We don't hear so many companies saying, "We have to have a 150-foot, two-story booth at the big Vegas show," any more. We're hearing a lot more people opting for targeted, more focused shows instead of the big budget-busting mega-exhibitions.

In some ways, I see the events business suffering from a tyranny of too much trend as much as a declining spending trend. If executives feel overwhelmed by events and event choices, they become a lot more selective with their time. So they decide to spend their time at intimate interactions like the < a href="recently-noted unconferences and less for big, rah-rah events. I see focused events like Walt Mossberg's D conference, which is hosting Steve Jobs and Bill Gates on a single stage, winning out over giant exhibitions like CES. I see people I respect and admire choosing the TED conference in Monterey over jetting off to Davos conference in Switzerland. And frankly, air travel is such a hassle nowadays, that I don't think anyone is regretting staying closer to home. So ironically, companies may be spending less, but getting more from their event dollars.

Some consumers have recently started buying more locally grown food (I've heard local food called "the new organic"), noting that shipping food half-way around the globe costs us all freshness, money, and energy that get in the way of sustainable food sources. Perhaps this declining spending on events spells a similar trend in business. Think globally; do more business locally. It has a nice ring to it.

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