Due to the current uncertainty, only 12% of Spanish companies expect to increase their event budgets in 2012.
The Spanish MICE industry faces bleak prospects for 2012, according to the results of the Market Research Study 2012: the Search for Optimization, conducted by the Eventoplus Group for the 7th year running. Far from showing signs of recovery, this year promises to be just as tough, if not tougher, across the board than 2011.
Shrinking budgets
After three years of acute crisis, the budgets both of event firms and companies shrank in 2011, by 21 and 22%, respectively. Furthermore, only 26% of the corporate respondents maintained budgets at the same level as the year before, while 30% suffered budget cuts of over 30%. Despite these drastic measures, the meetings event industry seems to have fared better than the advertising industry, which has registered a drop of 37.5% over the last five years (source: Índice i2p de Inversión Publicitaria).
Nevertheless, as an example of the current uncertainty, many companies have not even set a budget for 2012, and it is increasingly more common for them to base decision-making on quarterly results. In 2012, cuts will be made by reducing budgets and cancelling events, while in 2011 priority was given to the former.
Nonetheless, companies are still dedicating practically the same share of their marketing budget to events (22.5% this year, compared with 24% in 2011). In addition, a significant 15% of the respondents stated that meetings and events represent more than 50% of their overall communication budget. Lastly, 5% stated that they were planning to increase their budget in 2012.
Relative optimism
Event firms and suppliers are slightly more optimistic, since those that have managed to weather the economic storm have learnt how to cope with the crisis, in addition to implementing new strategies, above all those geared to looking for new market and product and strategic alliances, as well as direct contracting in the case of suppliers. There is also less competition than before, which affords survivors a greater number of opportunities. As regards business forecasts, more than 50% of the firms and suppliers expect to see an increase in turnover in the region of 0-20% in 2012.
New strategies
In addition to forming strategic alliances, reducing production costs and trying to penetrate new markets, event firms are increasingly reducing their staff and outsourcing services. As regards suppliers, product launches and service packages figure among the main strategies.
Event types
With regards to event types, in Spain events tend to be external, since the majority of Spanish companies usually dedicate less than 20% of their budgets to internal events. Doubtlessly because of the economic downturn, the star event in 2012 will be of a promotional or sales nature, followed by street marketing and education events.
Measuring ROI
Another consequence of the crisis is the growing importance of measuring event ROI. Although negotiating advantageous prices and revising event portfolios are still seen by companies as the best tools for optimizing management models, the need to measure ROI is steadily gaining ground. Although it is not yet clear whether the MICE industry and the corporate world have the necessary training and knowledge to measure ROI effectively and precisely
Creativity and innovation
Much has been said about creativity in the meetings and event industry. It is frequently, and erroneously, related to the visual: spectacular staging, original theming or the simple aesthetics of an event. In reality, it has to do more with the need to implement radically different approaches in order to achieve goals.
As to innovation, which is also intimately related to creativity, good intentions are frequently contradicted by reality: 45% of the corporate respondents admitted having changed their event formats very little, shying away from experiments.
For further information download a summary of the study.
Comments:
Thanks for disseminating our study. At a moment like this, knowledge dissemination is everyone’s responsibility so as to continue to improve! (Alex, Eventoplus, 21 March 2012)
