Silicon Valley got it's name from the material used to manufacture semiconductor ICs, and the semiconductor industry's roots in the valley run very deep. The semiconductor industry still lives here in the valley, but a lot of the actual manufacturing has shifted to other parts of the world. In the era of Internet time, many of the relationships in the semiconductor manufacturing industry span decades and generations, and the marketing and sales processes are shaped by those long term relationships.
Semicon is a cornerstone of outbound marketing within the semiconductor manufacturing industry. There are Semicon shows in all regions of the world, but for Silicon Valley, the show is Semicon West, held in July at Moscone in San Francisco. In contrast to tradeshows across other industries, one unique aspect of Semicon is how little things change. Companies exhibit in the same locations with the same space, there are the same meetings between corporate execs, the same corporate events -- it's very predictable.
This is probably why I found it surprising, in looking at a map of the show floor, to see a couple of big changes for 2008. The most obvious, and possibly the most interesting from an emerging markets standpoint, is the explosion of solar and photovoltaic manufacturing. Everybody knows that it's big, but how big is it? Semicon West has added an entire floor devoted to PV in Moscone West, and some of the reports that I've seen indicate that it's nearly full.
The other big change -- one of the large semiconductor equipment manufacturers has radically scaled down the size of their booth. In the past, they've had one of those huge, show landmark style booths. In contrast, if you were calculating statistics, their booth size is probably more inline with the median.
Why is that? Well, one explanation might be a tightening up in the market for semiconductor manufacturing equipment, but I really doubt that. My expectation for Semicon West 2008 is that attendance will be similar to last year if not greater, and that number of companies participating will be similar to last year if not greater (don't forget the growth in solar). Equally, this really isn't a situation where, financially, the company is on the ropes. I think that it's much more a function of the changing landscape of the outbound marketing program mix.
Across the landscape of marketing tools, it's getting easier and easier to track customers from contact through purchase and to measure ROI. In the old days, an advertising campaign might run for a year across multiple publications and the connection between customer contact and revenue wasn't very tangible. A one year advertising campaign might run between $60K and $100K per pub, so spending $500K to $1M wasn't out of line for the annual event. But things are changing in the marketing program mix. For a B2B company, you can reach a larger part of your target audience on the Internet for the cost of one print publication -- and track, analyze, and measure your results more directly. And as the landscape of the sales cycle is being mapped more closely, there is a lot of pressure to connect dollars spent in each program segment directly to revenue.
There is some marketing quackery connected to the 'I have a big booth too' mentality. Vanity, egos, and people with lots of influence but little understanding of the mechanics of marketing have been driving some of these decisions for years. It goes without saying that most of us like the idea of being a part of the big show. But modern marketing is all about benchmarks, establishing goals, measuring based on goals, and spending only as can be justified. And as marketing increasingly modernizes and becomes more metrics-focused, the historical oases of marketing extravagance and the slush-funds of frivolous spending are drying up in the harsh light of ROI.