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Monday, October 19, 2009

Matt Grimshaw, from Future Fab Connect, had a thoughtful blog post on the future of the semiconductor trade press that I took a few minutes to respond to. Matt is responding to the common perception that there is a "new normal" in the industry and it doesn't look good for the trade press, trade shows or even marketers. Here's how I responded:

Like the trade media, SEMI and our events are also suffering from the demand collapse and reduced marketing spend in the industry. As you suggest, traditional justifications for trade show spending, such as leads for new business, are harder to come by, and marketers are being forced to compete with other functional heads (R&D, Sales, manufacturing, service, etc.) for budget dollars. Not surprising when capital spending in the industry has shrunk to $14-15 billion this year off its 2007 high of $42 billion. This shrinking-of-the-pie means something’s gotta give, and marketing budgets look attractive to executives trying to save jobs, meet customer demands, and keep the dogs on Wall Street satisfied.

More than the immediate financial crisis, however, is the widespread perception that our industry has entered a new era. You hear about about how semiconductors are a “mature” industry; "marketing" i snow done through product roadmaps shared with customers in private PowerPoint sessions, and new technology is sourced through the Internet, bypassing traditional trade shows and trade media. Without clear metrics for ROI, marketers and marketing are being starved, unable to compete with the--presumably--more solid justifications by engineering, sales, manufacturing and R&D for resources. You sum up the common marketers lament by stating, “The chip business is now entering a state of maturity that's pretty much equivalent to late teen angst.”

Well, teenagers, like semiconductor marketers, probably shouldn’t whine about the state of the world. It’s bit immature, unproductive and poor practice for life’s guaranteed ebbs and flows.

I think you’re on track with Option 3—experiment with new ideas—but my emphasis would not be on how to save the trade media or industry trade shows. Nobody cares about me and you. People focused on their business aren’t going to shed a tear if another trade magazine goes belly up or SEMICON West never returns to the scope of the show 5-10 years passed. Companies have to do what they’ve always had to do: differentiate themselves from their competitors in ways that make money. In communications, marketers are going to have to fight for their “differentiation dollars” just like R&D and other departments have to fight for funding, and those guys have no more sophisticated ROI metrics than marketers do. They have anecdotes from a few customers, some vague judgement about competitive positioning, and some interesting ideas from engineering for clever new features that might make a difference in a competitive bid. After all the sophisticated attempts to reduce risk through dubious quantification, these are about the same kind of justifications needed to support trade shows or media promotions.

The fact is, the business is harder for everyone in the industry. Gone are the days when agency-types could sweet talk management into ego-gratifying media campaigns and trade show booth palaces. The vast bulk of marketing dollars that are going to be spent in this industry will be firmly based upon well-informed, thoughtful arguments by people grounded in the technical, application, competitive, and sales cycle specifics of the product category. Trade shows, media promotions, PR, social networks, and even marketing “experiments” will be a part of that spend. Will it be as much as the past? Probably not, but we’re not selling salt or spring wheat; companies will continue to compete by aggressively differentiating their products and communicating those benefits through mediums like trade shows and trade journals.

For those of us who will continue to make their careers in the microelectronics industry, our job is to adapt or die

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