Outboarding is Wrong

Great article in the New York Times today about the practice known as “outboarding” where companies set-up shop in hotel meeting rooms during industry trade shows, avoiding the costs of formally exhibiting, but benefiting from the huge efforts by show managers and exhibitors who bring the crowd to the city. I’m sure no one is surprised that outboarding is common at SEMI expositions, especially SEMICON West.

What I enjoyed about the article was its insistence in bringing up the clear ethical issues involved in the practice. The article states:

The industry sees the vendors as parasites who latch onto the host convention and reap the advantages of the often-considerable resources spent on organizing the show and drawing a crowd — without paying their share of the costs.
The vendors, on the other hand, argue that they are suffering in the weak economy and that the rock-bottom rates offered by some hotels help them stretch their marketing budgets.

In the semiconductor industry, some people have been outboarding for so long they don’t even realize the ethical implications of their behavior. They think there is nothing wrong with setting up shop in the Marriott, W or Yuerba Buena for private customer meetings, drawing people away from the exhibitors who are bankrolling the customer draw. Most of these outboarders even congratulate themselves on being so wise and so clever with their marketing dollars, how they don’t have to waste time and effort on exhibiting when they can cherry pick the top buyers to come to their hotel suite or hotel exhibit site. They are often the loudest critics of trade shows, claiming how times have changed, how the industry has matured and how the need to differentiate through exhibits and live marketing has passed.

The fact is these outboarders are trying to reap of the benefits of SEMICON West without paying any of the costs. That’s not ethical in my mind, it’s not what honorable companies and marketers do. And customers know it. They might meet these outboarders and listen to their PowerPoint presentations, but they understand the context. It frames their perspective and reinforces their commodity bias. Cusomers know your freeloading on West. Start-ups may outboard, but leaders don’t. Commodity suppliers might outboard, but not companies serious about extracting the full differentiated value of unique technologies and products.

We try to limit outboarding by trying to reserve as much of the local hotel space as possible. We do this to protect our franchise—our IP if you will—but also to protect our exhibitors who are undermined by the outboarders. We are not as powerful as the CES show and do not have the tools or authority to police outboarders as much as we’d like (hotels hold the cards here).

And we try to give companies ways to participate in West other than exhibiting. We have low cost meeting rooms that can be built to in Moscone, we have had underwriting programs that enable participation with exhibiting, and we think a small booth with a sponsorship for high quality visibility could be a great compliment to a private meeting room. And, we are open to new ideas on how best to make West work for any company.

I certainly sympathize with companies who have survived the recent industry depression and can’t waste any marketing dollars on ineffective programs. At the same time, I can’t sympathize with people who claim trade shows don’t work anymore, yet spend a ton of money on boozy parties and gutless meeting rooms. Just because you can benefit from West without paying for it—just like you can benefit from SEMI without being a member—doesn’t make it the right thing to do.