marketing

McCormick Place Loses its Luster

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Has all the grumbling about Chicago’s vaunted McCormick Place as America’s premier tradeshow venue finally reached critical mass?

For years, corporate exhibitors have groused about government-controlled, money-losing McCormick Place. Stories abound of exhibitors being forced to spend hundreds of dollars for services as mundane as plugging in a piece of machinery, or being charged $1,000 to hang a sign from the ceiling, because of onerous union rules governing “who does this” and “who can’t do that.” It’s been a constant refrain of complaining I’ve heard at every tradeshow I’ve attended at McCormick Place, dating back some 20 years.

Despite all of the criticism about McCormick Place’s high costs and lack of user-friendly service, it remains the largest convention complex in America, with over 2.5 million square feet of exhibit space. But attendance has been declining pretty dramatically, from ~3.0 million in 2001 to ~2.3 million in 2008. While the figures haven’t been released yet for 2009, it’s widely expected that show traffic will be reported as down another 20%.

As the current economic recession has put the most severe strains yet on the tradeshow business, it seems that a rebellion against McCormick Place is in now full swing. According to a recent article in The Wall Street Journal, “a gradual drop-off in business … has turned into a rout as a string of high-profile shows have pulled out.” The deserters include a triennial plastics show (~75.000 attendees), as well as the Healthcare Information & Management Systems Society’s annual conference (~27,500 attendees).

But isn’t tradeshow attendance off in other convention centers as well? Well … yes. But clearly not as much. In truth, tradeshow attendance has been under pressure at a “macro” level ever since 9/11, and an important reason beyond the issue of terrorism is technological innovation and the ability for people to interact through video-conferencing and for companies to demo their equipment and services via the Internet and other forms of digital communication.

Tradeshows were once the only way to gather a community together, but now there are other options. One school of thought holds that large tradeshows are now less effective than small, targeted conferences that provide heightened ability for attendees to interact with one another on a more intimate basis. Some events no longer charge attendees … but they make sure to “vet” them carefully to ensure that the show sponsors who are underwriting the costs are reaching prospects with important degrees of influence or buying authority.

On top of these “macro” trends, the current economic downturn just makes McCormick Place look more and more like a loser when it comes to the tradeshow game. Compared to Chicago’s three most significant competing tradeshow locales – Atlanta, Las Vegas and Orlando – the cost of many items from electricians (union labor) to foodservice (greasy spoon-quality coffee at Starbucks® prices) to hotel accommodations (room fees and surtaxes that won’t quit) ranges two times to eight times higher in Chicago. And in today’s business climate when every cost is scrutinized closely, none of this looks very cost-effective to the corporate bean-counters.

True, Chicago is more centrally located for travel from both coasts: Who wants to take a five hour flight from New York to Las Vegas or from California to Orlando to attend a meeting?

[On the other hand, no one can honestly say that the weather in Chicago is preferable to sunny Florida or Nevada!]

So it would seem that Chicago’s worthy tradeshow competitors have achieved the upper hand now. I just returned from two national shows this past week – the International Air Conditioning, Heating & Refrigeration Expo and the International Poultry Expo. Where were they held? Orlando and Atlanta – the same cities which are attracting McCormick Place’s erstwhile customers.

The “Greening” of Corporate America: Fact or Fad?

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Considering the cold winter season we’re having – not to mention the equally cold economic and business environment – it’s not hard to imagine that the “corporate green” trend, so popular and prevalent only a year or two ago, might have stalled out in a major way.

Add to this the recent flap over climate change data fudging by some over-enthusiastic scientists, and it seems the perfect recipe for “corporate green” being a movement that’s on the wane.

But a just-completed market research study on “green” marketing provides interesting clues that this might not be the case. A group of U.S. commercial/industrial firms was surveyed for MediaBuyerPlanner, an arm of Watershed Publishing, to determine the extent of green marketing that is occurring. Among the key findings:

• ~70% of the firms surveyed consider themselves to be “somewhat green” or “very green” … but they suspect that customers think of them as less green than they actually are. Perhaps related to this concern, ~80% of the respondents expect to spend more on green marketing in the future – and that percentage approaches 90% among the manufacturers contained in the survey sample.

• For those who currently feature “green” marketing themes in their promotional efforts, the most popular media for that is using the web (~74% of respondents), followed by print promotion (~50%) and direct marketing (~40%).

• More than half of the companies reported that they are taking concrete steps to become “greener” in their operations. The most popular actions are conserving energy in their operations (~60%) and changing products to reflect greener characteristics, such as altering product ingredients, packaging, or intended uses (~54%).

And here’s another interesting survey finding: Quite a few respondents believe their green marketing efforts are more effective than their normal marketing efforts. (One third of them felt this way, compared to just 7% who felt regular marketing activities are more effective than their green messaging. The remaining 60% have not observed a measurable differentiation and/or did not feel knowledgeable enough to make a judgment.)

The survey also found that the commitment senior management makes to sustainability and other green principles in the form of specific actions is what comes first … followed later by “green” marketing efforts. In other words, there is a lower incidence of companies creating green marketing campaigns just out of a desire to appear “green.”

This suggests that green marketing depends first on company management buying into the ideological principals of environmentalism.

Certainly, the “soft economy” as well as the controversy of “soft science” could be acting as a damper on the potency of green messaging. But this field research suggests that “corporate green” continues to be a trend as opposed to just a passing fad … and that its significance as a marketing platform for companies will grow stronger in the coming years.

How are things clicking in Internet marketing at the moment?

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What’s happening with clickthrough behaviors on online ads these days? According to comScore, Inc., a digital market intelligence and measurement firm, activity today versus 2007 reveals that ~50% fewer people are clicking on Internet ads now compared to then. In fact, fewer than 10% of all Internet users accounts for ~85% of all ad clicks.

This may call to mind the old adage: “When a tree falls in the forest, does it make a sound … and does anybody know?”

On the other hand, it’s good to remember that banner advertising can have branding value. In fact, comScore research also shows that one in five users who click on an ad go on to conduct a search about the advertiser … and one in three visit the brand’s own web site.

Unfortunately, determining just how effective online advertising is can be a challenge to measure – reflective to some degree of the “bad old days” of print advertising. One reason for the difficulty is because of evolving consumer behaviors regarding “cookies.” When consumers delete tracking cookies from their computer, they’re counted as a “new customer” when returning to the site. Interestingly, comScore’s latest data find that nearly one-third of web users delete cookies – many as often as five times per month. And with the steady stream of news items warning of “Big Brother”-type information harvesting, it’s hardly a surprise that cookie deletion has grown by ~20% since 2007.

What’s the implication? Not accounting for cookie deletion can lead to an overstatement of unique visitors, reach and frequency – by about 2.5 times. (Relying on IP addresses doesn’t solve the issue either, because the typical computer in the U.S. has a multiple number of IP addresses.)

Of course, these hurdles don’t mean that an attempt to measure the effectiveness of online advertising is an exercise in futility. Just as in print advertising, there are clues marketers can hone in on that point to whether an online advertising campaign is a success. And prudent companies will discount web traffic statistics by a certain degree in order to paint a more realistic picture … not to mention incorporating conversion tracking triggered by specific actions on the web site such as a purchase, a customer query, or registering to download an informational document.

Loyalty? … What Loyalty?

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Godiva's newly announced customer loyalty program is a yawner.
Godiva is a late entry in the customer loyalty program sweepstakes.
Godiva Chocolatier has just announced its first-ever loyalty program for customers. It promises to ply chocoholics with all sorts of goodies — from free in-store confectionery gifts to free shipping on online orders. Anyone over age 18 is eligible to sign up with no obligation to purchase … and for those who activate their loyalty membership before June 13th, there’s even a chance to win a complimentary “chocolate party” for up to 25 friends at their nearest company-owned Godiva boutique store.

How wonderful. Now, pardon me while I stifle a big yawn.

For a program that seems pretty decent actually, how come it all sounds so predictable … so mundane? That’s because everybody’s doing it. (And Godiva is really, really late to the party.)

A recent report issued by consulting firm Colloquy contains some interesting statistics about loyalty programs. With more than 1.8 billion loyalty memberships on the books, the numbers have never been higher. (This translates to a whopping 14 loyalty program memberships per U.S. household.)

These stats underscore the fact that loyalty programs have migrated well beyond the original airline frequent flyer and hotel frequent stayer programs to encompass seemingly every corner of consumer activity today.

But according to Colloquy, fewer than 45% of all loyalty programs are actually active, in that they’ve had at least one instance of activity in the preceding 12 months. “The relative ratio of active to inactive loyalty program members suggests that more than half of all program memberships are merely names in a database,” the report states. “The implication for marketers is clear — the era of growing membership rolls just for the sake of growth is over.”

What this suggests is that companies have done a better job of signing people up for loyalty programs to begin with … but not nearly enough to keep them engaged as regular customers over time.

Could it be that the single most popular tactic — offering a one-time 15% or 20% discount on purchases as a “sign on” incentive — has attracted customers who cheerfully take advantage of the special activation offers, but have no compelling reason (or even any intention) to participate over the long haul?

If that’s the case, the loyalty is only skin deep … and the current economic conditions will likely spark even more instances of lax participation.

But what if companies tailored loyalty programs to individual customers based on their unique profile and actual purchase history? Would better customer conversion result — along wth improved ROI?

It’s more challenging to run a tailored loyalty program … and it requires more focus and attention than many marketing department personnel are willing to devote to it. Moreover, there’s no guarantee that consumers won’t simply “take advantage,” without spending any more on merchandise than they would have done without the loyalty program being offered in the first place.

But with the sorry participation rates currently being experienced with loyalty programs … it’s certainly worth a shot.