Here today, gone tomorrow. Why would companies spend money on temporary installations in a recession? And more importantly when they do - what do they want? Anna Mitchell reports.
As the recession hits, audiovisual integrators have been plagued with specification reductions, project hold ups and cancellations. But how is the rental industry faring? Temporary installations are transitory by nature and if a company is cutting its budget for purchasing fixed equipment, essentially an investment, why would it plough cash into a short-lived event?
“There’s definitely been a reduction in budget spend, but whether that’s resulted in a reduction of technology spend is questionable,†argues Oliver Richardson, sales director of UK based DB Systems. DB offer audiovisual hire, specialising in exhibition, event and conference industries and Richardson says while some of his customers (design agencies and production companies) are squeezing their overall budgets the technology part has actually increased in some cases.
He does say, however, that work and confirmations are coming in later. “We’re quoting busily away and there’s a lot of pitching going on but ultimately the person paying the bill – the end client – is leaving it later and later,†he notes. “If you talk to exhibition organisers people aren’t necessarily booking their space later but they are delaying the design of what they are going to do. This is actually not a very good way to do it all. If you don’t do a lot of pre-production on your exhibition stand, you’ll end up with a lovely looking stand that isn’t very dynamic.â€
This sentiment is echoed by Karel Knetl, director of the rental department at Czech Republic based AV Media. “The period between the order and the event is now very short,†he says. “For example last year we had signed agreements, signed orders maybe two months before the event. These days we have orders coming in maybe two weeks before the event. This is because of the recession, people are afraid to sign agreements. They don’t want to be tied into anything.†Knetl explains that this causes problems with predictions and forecasting. “You can have a lot of clients in the pipeline but you have no idea what the final revenue will be.â€
He continues: “Overall, the rental business has slowed down. We do a lot of business for conferences in hotels and in the first quarter this was very slow. The hotels are in a bad position with many of their core events, for example product launches, being pulled. The events that are going ahead are often simpler and use basic equipment. Priorities change and often we see that audiovisual equipment is the first part of a budget to take a hit. They still use equipment but it is usually basic. They are cutting any gadgets, any interactive equipment – they don’t go for anything new because they are afraid of spending money. A good example is projection – many events now use standard data projectors where we used to have a lot of clients asking for edge-blended projection.â€
With budgets tightening companies are being more selective with regards to how and where they spend what little money they have to play with. Richardson says DB has noticed a shift towards dedicated corporate events.
“We’re doing a tour of eight shopping centres for a Peugeot launch that starts next month. We do a lot of conferences and we do a lot of internal customer events where a company will invite all its customers along to a wholly branded, tailored event. An exhibition is very spread out with a lot of people coming from a lot of different areas of industry. But a single company can invite all of their partners and distribution networks to one event. Very closed, tailor made events are becoming much more popular. Technology spends for these type of events can be quite astonishing because they’ve only got one or two days to really engage with their customer or their supply network and they utilise technology to deliver that.†Richardson backs up his argument citing Sony’s exit from IBC. The Japanese electronics giant said it would rather focus its efforts on a dedicated marketing campaign. (Follow link code 23859 for Sony story).
Someone else who has noticed a change in spending activities is Markus Sautter, managing director of Pani Projection and Lighting, an Austrian based company that specialises in large artistic public projections. “Definitely [the market] is undergoing some difficulties,†he acknowledges. “Many big companies we have been working with have had their branding and marketing budgets cut down to half of what they were in 2008. Nevertheless I keep hearing that there will be more consciousness involved in deciding how to spend this budget. The companies are really looking for projects that they deem significant in terms of recall value. Projects that generate a deeper impact on the human soul and will thus last longer in the memory are more attractive right now.†Sautter says the large-scale projections, or “art-vertising†as he calls them, are becoming increasingly popular as companies look to create maximum impact from tightening advertising budgets. “If you ask people arriving at their office – ‘You’ve just seen three billboards, what were they?’ - most will be unable to recall them properly. And that is something I think companies and agencies have realised, this is where we have a chance,†he added.
Peter Majewski, owner of Poland’s MOOV more video - a specialist in the production and rental of video equipment for events, said the market had changed and it was important to be flexible to survive. “[Now] only big corporations can manage to spend on the largest projects. We want to get back to a position where smaller firms are able to invest in a large project.â€
Although many companies have watched general spending trends vary greatly in the last few months, it is still the case that a single event can change the fortunes of the temporary installation market in a particular area. This is evidenced by Knetl’s experience as he watches the EU presidency transfer to the Czech Republic. “There will be a lot of call for interpreting and translation equipment for events related to the presidency,†he says. “Even though we are not the official provider for the new presidency of the EU, we benefit from it and we have picked up some nice events. This is good news, in spite of all these challenges this is something positive.â€
As far as technology trends go Richardson said the rental market is currently clamouring for touch screens and, more particularly, multi-touch. “Design agencies want to incorporate a lot of interactivity into the stand. From the very smallest booth to the very biggest booth touch screens are becoming a pretty much standard part of the brief now,†he said. “Funnily enough when I got into the business in the nineties touchscreens were quite popular. And they must have gone through a period of three to four years, maybe even five years where we didn’t rent a touchscreen out to anybody. Then around two years ago a trickle of orders started and recently it’s gone nuts!
“HD also important now,†he continued. “Pretty much all rental companies should be investing in HD technology now. That’s important for us. We do a lot of pharmaceutical events which require HD screens to view their products.â€
So where is the market heading and will the trends, spurred on by the recession, actually create a sea change in the marketplace. Richardson doesn’t want to be drawn into predicting the future at this point in time but says he sees things continuing much the same for at least the next year.
And as Knetl concludes: “New market, new activities, new challenges.â€