Transcript
Hi Paul.
Hi, how are you doing?
Paul, you wrote an article, I think it was already two years ago. On LinkedIn. And suddenly it came across and it caught my attention.
And in the article, you're describing trade shows who are too big to succeed.
Well, it happened at about the time that we saw one or two casualties among the big, famous name trade fairs in Europe and one or two other places.
And I guess the one that really, sort of, rocked Europe to its core was CeBIT finally having to fold. And trying to look at what was going on there, we've seen quite a few of the big, traditional auto shows, also either folding or really struggling. I mean, there are very few of them left in most countries. And even the last few standing are really finding it hard to offer real value to their clients, these days.
So, I was sort of scratching my head and trying to work out really what was going on there. And, you know, this came in the middle of what otherwise and in general had been a really great time for the trade show business. Most of the big commercial for-profit organizers making very significant profits. We saw eye-watering mergers and acquisition transactions with multiples of up to seventeen times earnings. I mean, this was an industry that looked to be in fantastically great health.
But yet, some of its, sort of most famous brands, for some reason, were no longer satisfying the exhibitors, who ultimately are the people who pay the bills for the trade show industry. So, we're trying to get underneath that, really, and find out what it was. Why, particularly, the large corporate exhibitors…
You know, there are trade show models, very traditional trade show models, that look exactly like the trade shows that our parents, my grandfather, used to go to and probably his grandfather. You know, they kind of look exactly the same. And for some industries that's absolutely fine. It doesn't matter. I mean, if you're a transactional event for small, medium sized businesses then companies go there, really to place orders and it's a pretty simple process. And there's no reason that those fairs should look any different to the way that they've always done.
But particularly for events that have a significant number of large corporate exhibitors...
The B2B marketers, I think, are becoming increasingly demanding. And in many cases it seems some of the very big fairs were not able to satisfy those B2B marketers. That they were really giving them the value that they wanted. And a significant chunk of that comes down to data. And we can get into that or into other areas if you like.
But maybe, before we go into that, in the article you also gave an example. Of, for example, Swatch leaving the, I think it was the Swiss World Watch Fair or Trade Show.
It was Baselworld, which was the, sort of, most important watch fair, in the world, in Switzerland, yes. And a brand like Swatch leaving the main event for the business in the year, that's quite significant. It is.
I mean without, perhaps, going into the very nitty-gritty details of what went on in Basel and why they sort of lost the support of the Swiss watch industry.
I think, sometimes, some brands believe their own PR, shall we say. When they say: this is the most important event in the world and you have to be here. And they start treating their customers that way. You have no choice but to be here. We are the most important place to be in the industry. Everybody kind of says that in their brochures, but you have to be, a little bit, careful about how much you believe it yourself.
Because it can infect, I would say and I would use that word intentionally, the way you and your teams interact with your customers. And I think, sometimes, people then begin to forget, who actually is really in charge. And the people who are really in charge, are ultimately the ones who write the cheques to participate. And at those very big fairs, if you are one of the big brands of the industry and as I dare say, you're a wizz...
I mean Swatch is not just the plastic watches. Swatch owns a large chunk of all of the major luxury brands in the Swiss watch industry, as well.
If you are going to participate in the major event of your industry and you are one of the big, giant, corporate players, you spend a lot of money. I seem to recall...
As you say it's a little while ago now. But I seem to recall that Nick Hayek, the CEO and owner of Swatch, was talking of spending up to 50 million euros, in terms of their participation at Baselworld. Now, that obviously wasn't all money that was going to MCH, the organizers. In fact, the organizers themselves probably take no more than 20 to 30% over-all of what exhibitors spend. And for a very big spend like that, it could be even less.
By the time they've built these hugely elaborate stands for all of their brands.
By the time they've flown in their key-buyers and their key-customers, from around the world and they've put them up in hotels in cities in Switzerland or other cities in Europe, who triple their hotel prices in the honour of receiving the attendees at these large events. These are massively expensive investments.
And, clearly, what has been happening, in some industries, in some cases, some hard questions are being asked about: is this the best way that we can spend our marketing dollars? In the current world. In the current B2B-marketing environment. And clearly, in some cases, the answer to that question has been: no.
The title of the article was: Too big to be successful.
Is it actually the fact that the trade shows are getting too big, that makes brands go away and look elsewhere?
Well, I'll give you a horrible consultant answer to that question. Which is: it depends. And it does genuinely depend. Obviously on the industry being served. And in some cases there is clearly great value. In an event positioning itself as the one place, every year, that the entire industry comes together. And you know everybody is going to be there. You know that every company is going to be there. And at those giant events...
I mean, we saw some interesting research, very recently. That suggested that 20 to 30% of the interactions, taking place on the trade show floor, take place between exhibitors, at those giant events.
So, I was somewhat exaggerating if I was implying that all these very, very big events are too big to succeed.
But I think one of the things that we are now facing is that we now have the tools in hand. Relatively few people have been using them. But we do have the tools in hand. That can make it much more efficient in bringing exactly the right groups of people together. In the right place. At the right time.
One of the reasons that the very, very big fairs - where you could say: everybody in the industry is here - happened, is that you needed that sort of serendipity. That happy chance of people finding each other in the corridor and saying: aha! You know? How wonderful to see you. I never expected to see you here. Or: goodness, I've never heard of your business. This is wonderful. That sounds like the sort of business we'd like to be doing business with.
We now have an awful lot of tools that can make this whole process much less random.
It is very, very clear, from what's happened this year, that, in most cases, people want to get together. I'm sure you're hearing this in people that you're talking to. In all of your worlds. Nothing that has happened this year now suggests to anybody that there is a lack of demand for face-to-face events. In-person events. People getting together. Quite the reverse, in fact.
I mean: while we have all found surprisingly efficient ways in which we can do business, using the digital tools that are available to us, it simply isn't the same. And whilst we can exchange information reasonably efficiently, we can't network in the same way that we do at events. We don't have these happy accidents of bumping into people. So, people do want to get together. But equally they want to do so, I sense, in an increasingly efficient way. And I think, particularly coming out of this time that we've been experiencing this year, it's clear marketing budgets are going to be extremely tight.
Nobody, no industry, pretty much at all - other than possibly the vaccine’s business - is going to have money to...
More money than they had before, shall we say, to spend on their B2B-marketing. So, they're going to get choosier and choosier and choosier. And they will be asking harder and harder questions of event organizers. About the value. The return-on-investment. The return on people's time. All of those questions. Which some parts of the events will have, increasingly, begun to be able to answer.
But we are up against the giants of the digital marketing world. I mean, basically, B2B-marketing money is spent in two ways these days. It's spent on digital marketing and it's spent on events. And the digital marketing companies are able to provide incredibly detailed, granular, data on how your marketing dollars are working.
And we - and the world I know from events, most closely, is the trade fair world - we still rely on a very old-fashioned send around the salesman, arm around the shoulder: good news, twenty thousand more people came to our event this year. Isn't that marvellous? Who were they? Well, twenty thousand more people came. We have not, in many cases, been anywhere near as good as we should be. At really focussing in on: who is coming to the event? Exactly what is going on in the exhibition hall? Because we haven't needed to be. People have, sort of, liked coming to fairs. It's what they've always done. They've spent their money that way. And we've made lots of money doing it the old way, so why change. But my sense is increasingly hard questions will be asked.
The good news is that we do, undoubtedly, have the tools available to us to answer those questions. But it makes doing business more expensive. It will make business slightly less profitable for a lot of the organizers. So, inevitably they have resisted. Partly 'cause it's complicated. Partly 'cause it changes the way they're doing business. And partly 'cause it makes doing business more expensive.
A lot of trendwatchers also mention that events in the future will be more local. And I can imagine that could be a response, based on what we've seen with Covid-19. People don't like to travel these days. Out of fear, I think.
In your opinion, as an expert, how do you see that impacting the trade show business?
I think it will accelerate a trend that we have already been seeing over a number of years. Which is a divergence within the industry where two kinds of events work. And despite the title of that piece we were discussing earlier, the Too big to fail, sorry, the Too big to succeed article, I actually do believe that there continues to be a place for a very small number of absolutely, unquestionably, industry leading events. Where people will go. Once a year. Once every two years. Whatever the cycle is for that particular industry. On the basis of knowing that everybody in the world will go there. And I have, I hope, reasonable confidence that that will be feasible. In the future. It's clearly not going to happen in the next six to twelve months. In any sort of normal way. Possibly not in the next twenty-four months. But it will happen again. In due course.
But then I think you're right. I think there is a clear place for, you might almost call them sort of hyper-local events. Where you, very efficiently, deliver to your customers the opportunity to meet with a clearly defined set of people. Who do not have to travel too far. Who only need to take half a day out of their time. I'd say that trend had already been clearly developing.
I mean, it's one of the reasons why many of the traditional trade shows in many of the mid-sized countries across Western Europe, whether we're talking of the Netherlands, Belgium, Denmark, Sweden, other places like that, have become much less important as big fairs.
Because people, frankly, will go to the big fair in Germany or in Paris or in Milan or wherever it happens to take place. But in Europe, those are the main cities, obviously. Elsewhere in the world: in Las Vegas or in Shanghai. But then they need very efficient local sales opportunities. Where, perhaps just for as little as two days. And you're not hoping to see or you're not hoping to be able to claim, as an organizer, that a hundred thousand people came through the door.
In fact, rather more usefully, you might be able to say: two thousand people came through the door. But in this area, within a hundred kilometres of where you are, these were all of the key-people, in exactly your industry. And we can guarantee to you that every person who walked through the door of this venue was relevant to your business.
Because, realistically, if we go to an event that has two hundred thousand people attending, the truth is a vast majority of those are not really relevant to my business. And they're not really potential customers. For my business. In most cases. Unless I'm the very biggest company in the industry.
So, yes, I think you're absolutely right. I think a move towards local events, to complement these big mega-event gatherings of the industry...
But those will have to work harder to prove their value, I think. Because it is a softer value, frankly. The small events we're talking about, it's quite transactional. This is a sales activity, really. It's people meeting their customers. Possibly writing orders. Updating orders. We've got some new stuff. Can we send you the new stuff? The simple old-fashioned basics of doing business, day to day.
The very big affairs are buy in large, much more likely to be marketing, brand-building, schmoozing with customers. Future customers. Staff. Future staff. There's an awful of recruitment that goes on at these big trade fairs. So, a little bit harder to measure in hard dollars, the value that people get from those.
But, in the middle, I think the events that did sort of fall in the middle, will really struggle. So people will really have to be focussing, laser-sharp, onto the value that they're offering to their customers.
And also, like you said before, maybe focussing on how to prove that value. With data. With other tools available for them. So they can actually, like in the digital marketing, indicate: okay, this is the additional value we can provide for you.
I think so. Because there are a variety of ways available now, where we can essentially open up what was previously the black box of what went on in the hall.
If we were a good and competent exhibition organizer, we could, with a fair degree of certainty, say we knew who had come to the exhibition that day. They knew that you, Kevin, and me, Paul, we had both registered and we'd both shown up and actually gone into the hall. And that's normal of most... But that our friends Steve and Tim had registered but didn't come. They'd know that. But up until now, they 've had no idea what at all we do, when we get into the hall. It's entirely feasible that you and I know each other. It was the one chance a year to meet each other. And we went to the bar and had a couple of beers together and left again. And yet, they would walk around, telling their clients: that Paul Woodward, he's such an important guy. He was at the show. Equally, I may be somebody they've never heard of. But I might've gone to twenty companies. Seriously requested brochures. Seriously requested more informations. Seriously requested sales calls.
But that is now possible. We are going to have to be doing that.
To, sort of, prove to people, that they have achieved whatever the objectives that they genuinely had, going into the event. And that's a bit of an issue as well, of course.
Because to say: did you meet the objectives you had, going into an event, implies that the customer had clearly defined objectives, going into the event. And didn't go to the XYZ world show, just because we always do. And: we've been for the last twenty years. And: we have a booth at that show.
And I think anybody who's ever been involved in this process, will recognize that point where everybody's looking around and: oh God, do I really have to go to that city? And I won't name any cities, it would be insulting. But, you know, some of the cities in which major trade fairs take place are not terribly exciting places. And, you know: stand on our booth for five days, really, do I have to do that? So, it's not at all the...
It's certainly not all the organizer's fault. And a lot of organizers have spent a lot of time and effort over many years, trying to find ways to prepare their exhibitors to come to the fair better prepared. It doesn't always work. So, that's a challenge as well.
But, again, if marketing dollars are harder to come by, we can, I think, fairly assume that more companies will be asking harder questions and doing better planning about how they spend their events.
And as you well know, I think, one of the hard questions that's being asked, by many of the very largest companies in many industries, is: do we serve ourselves best by going to the event where all our competitors are also sitting? Or do we spend, probably, a similar amount of money, but do our own event? Choose who we have come to that event and control, entirely, the message.
We've obviously seen that for many years in the IT world, with Apple and Apple's events. I mean Apple stopped supporting the major IT events in the US and elsewhere in the world many, many years ago. I think we're increasingly seeing that in the automotive industry. Which is one of the reasons they're not really supporting the big, traditional car shows in the way that the used to.
The downside of doing that, of course, is: the people that you invite to your own events, are inevitably the people that you already know. What you miss by not going to a big, general event, is the opportunity to meet the people that you don't know. So, it's not quite the no-brainer that it seems to currently seem to be to some of the big corporations. But that's certainly a question that they're asking themselves. Do we spend our money better on doing our own event?
And certainly in the technology world, that has been the trend, hasn't it? We see a huge amount of money being spent by the big tech companies, whether the software companies or the hardware companies, on doing their own events.
So, for some parts of the events industry, that's fine. They don't really mind. I mean: if you are a venue or if you're one of the companies who builds the booths and does the AV and does the catering and all those things, it doesn't really matter to you whether the event is organized by Messe Frankfurt or Hewlett Packard. It doesn't matter. They will still...
But they will probably spend more money with you, if they are doing it as an own event. Than if they're going and participating in the big, general trade show.
But that's clearly a trend that has impacted on large trade fairs in a number of industries. Although not all.
Yes, Paul, thank you very much for sharing your insights. I think we learned a lot and also have a lot to think about, still. Thank you so much.
Thank you very much.
And you at home, thank you for watching our show. I hope to see you next week.
