Sequestration Looming; Take Cover, Keep Antennae Up

photo_Steve-Charles_65x85by Steve Charles, Co-founder and Executive Vice President

Like a distant tornado, the federal budget sequestration seems to have been looming on the horizon, but never quite comes into sharp focus.

Well, don’t wander too far from the storm shelter. In recent days, the likelihood of the sequester actually occurring has increased markedly. This remarkable development, the outgrowth of intractable political polarization, presumably means budgets will cut across the board.

OMB has been quite public in disseminating its preparation guidance to agencies. Its program-by-program impact analysis from last year simply drew a line of reduction of 7.6 percent to civilian spending and 10 percent for defense across the board. That now applies only to dollars unspent for fiscal 2013 ⎯ which is running under a continuing resolution at slightly below 2012 levels.

But, so many statutory exemptions to sequestration exist, and there is so much discretion given the White House, that the real effect of sequestration will be totally uneven across of the board. A new Congressional Research Service summary explains this phenomenon.

The law lets most entitlement programs off the hook. But the White House has a lot of leeway over administrative expenses related to these programs, so pay close attention to them. That’s where services and other contracting activities may exist.

In some ways, sequestration is preferable to Congress than actually doing the hard work of choosing which programs to kill, if it comes down to that. This way, everything continues, even if at temporarily reduced contract spending levels. But in this short term, sharpen your communications and sales calls focuses on the assumption your customers will be distracted by the simultaneous work of sequester planning and work — two months delayed — on the 2014 budget submission.

Three Reasons to Cut Your Trade Show Marketing Budget

by Allan Rubin, Vice President, Marketing

For most of my career in B2B/B2G marketing, trade shows have been an integral part of the marketing mix (for lead generation and branding/awareness). This was particularly true in the defense world, where large shows and face-to-face meetings were staples of the annual marketing strategy. Often, your absence from a show would be as notable as your presence, and that alone became a justification for investing marketing resources and budget.

I think it’s safe to say those days are behind us. Recent scandals, budget pressures, and political posturing have taken their toll on everything from attendance to activities at large conferences and shows. While I think these events may still play a role, smart federal marketers need to re-evaluate how much they’re spending and what they’re doing at these events, and they need to reset their expectations accordingly. I see three primary reasons to find other places to put at least some of your federal marketing funds:

  1. Trade Show Attendance is Down – We knew this was likely to happen as travel restrictions kicked in and spending scrutiny increased. AFCEA’s TechNet Land Forces South show, one of three regional shows that spun out of the former LandWarNet event, was held in Tampa last month with roughly 225 government attendees for a three-day show (compared to 600+ exhibit personnel).
  2. Off-the-Floor Events are at Risk – Looking to host a big party or fancy dinner to engage with your prospects? Don’t bother. Camera-shy attendees don’t want to answer questions about why they were partying it up on the taxpayer’s tab. We’ve learned at least one agency has forbidden its employees to attend vendor parties at an upcoming show and is encouraging exhibitors to keep things low-key to avoid negative publicity for the event. I’m sure they are not alone.
  3. Driving Traffic is Getting Tougher – FAR rules already restrict your promotions and giveaways intended to draw people to your booth. But expect attendees to be wary of accepting anything with any perceived value whatsoever. Don’t forget — any negative publicity for a show could lead to cancellation in this hyper-sensitive climate…a fate that has already befallen AFITC and threatened shows like GFIRST 2012. We’ve heard some show organizers may prohibit swag at future federal shows, making it even harder for you to get the attention of a limited number of visitors (although many of us would welcome a reduction in treasure hunters with overflowing goodie bags). Already, organizers at GFIRST have banned catering on the exhibit hall floor, so attendees will have to leave the hall (or hit the concession stands) to get their coffee, smoothie, or popcorn fix.

Our advice: if you need to be at a trade show, scale back your investment and/or put on your negotiating hat. Many exhibitors are pulling out and leaving empty booth spaces on the floor, so you can probably super-size your booth at little to no extra space cost. Don’t forget to remind your sales team to call on prospects in advance to schedule meetings. No matter what the environment is, those who put very little effort into a show usually get very little out of it.

If you’re looking for new ideas on how to re-direct those federal trade show funds, contact your immixGroup account manager or our marketing team to see what we’re cooking up.

House Committee Approves Bills to Lock in Travel Spending Cuts

by Allan Rubin, Vice President, Marketing

Yesterday Government Executive reported that the House Oversight and Government Reform Committee approved, and sent to the House, two bills targeting excessive government spending. The actions aim to cut agency travel spending by 30 percent with a particular focus on travel to conferences.

An amendment added more teeth to this request. The amendment would restrict agencies from paying travel expenses for more than 50 employees to attend a single international conference (unless they are approved in advance by the Secretary of State). Further, it requires each agency to post on its public Web site each quarter the details of any travel expenses paid for conferences during the previous quarter.

Personally I think the Secretary of State has more important things to do than sign off on travel requests. But my larger concern is with the increased scrutiny around individual travel details and the chilling impact it will have on demand among prospective attendees of government conferences and events. Since the details emerged from the GSA conference scandal, it seems that any government employee who wants (or needs) to attend an event in another city has to sign away his or her life and risk public humiliation, not to mention career growth, just to get approval.

Is the government over-reacting here? More importantly, will anyone in government have the appetite to go through the approval process (or face the risk) to attend any of the events at which we promote our products and services? Will they be discouraged from attending local events too? Or have those become an even more important tool for marketing professionals?

We’ll be following this bill as it winds its way through the House. And as always, we’re watching our attendance rates to see if our marketing ROI has been (or will be) impacted by these continuing changes. I urge you to do the same.

DoD Freezes Conference & Travel Spending

by Allan Rubin, Vice President, Marketing

Last week I wrote about the cancellation of the Air Force Information Technology Conference (AFITC) which was slated for August 2012. Today I was greeted with news that the Defense Department has ordered an immediate freeze on all conferences and related travel (see related articles on Defense Systems and USA Today).

Deputy Secretary of Defense Ashton Carter has ordered military service chiefs to review all upcoming conferences costing more than $100,000, which will require approval from top Pentagon officials.

Events have always been an important part of most federal marketers’ lead generation and brand awareness plans. IT companies targeting the DoD in particular tend to rely heavily on defense-related conferences and trade shows. Is that reliance about to change? Are we going to see much larger crowds at the local AFCEA breakfasts or other events that do not tax the travel budget? What role will social media, webinars, and virtual events play in picking up the slack?

We’re developing some new ideas to help our clients deal with these changes in the market. Let me know what you’re doing!

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