Winning Exhibitions Strategies in 2015 and Beyond.

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Contents.
About AMR International
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2 3 3 4 5 8 9 10 11

Executive summary 1 Introduction 2 The value challenge 3 Maximising visitor time 4 Demonstrating value 5 Beyond booth sales 6 Extending brand permission 7 Emerging marketing strategies

About.
Founded in 1991, AMR International Limited is the leading strategy consultancy to the events industry. AMR International has worked with the majority of the world's top 20 exhibitions organisers, as well as with a number of leading players in the wider business media and publishing arena. AMR Internationals mission is to help clients develop superior, customer-driven strategies by putting customer insight at the heart of all its work. AMR International supports major public and private media groups in developing their strategies. We have also assisted numerous strategic acquirers and private equity investors in evaluating acquisitions and other investments in media. For further information please contact denzil.rankine@amrinternational.com or jonny.baynes@amrinternational.com

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Executive summary.
To 2015 and beyond, exhibitions organisers will increasingly need a dual strategy. While emerging markets will continue to offer strong growth opportunities, in mature markets organisers will need to compete more vigorously to maximise their share of visitors time and, by extension, exhibitor marketing budgets.
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transparent RoI, trade shows are under increasing pressure to both deliver and demonstrate their value to exhibitors. This will require smarter use of digital tools, to understand and track exhibitor value and support exhibitors with their broader marketing needs. D  igital is not a direct substitute for face-to-face. However it does enable the data and tools for organisers to engage audiences beyond the constraints of the show venue and dates. F  rom their solid base of community engagement, organisers are well positioned to address their audiences beyond the traditional show format. However, they will need to be closer than ever to their served markets, to understand visitors needs and deliver the relevant content and tools that both gain visitor traction, and meet exhibitors broader marketing goals. O  rganisers will look for a variety of ways to increase their portfolio exposure to emerging markets as these continue to offer strong underlying growth. As well as cloning strong brands into growth markets and acquiring or partnering with local players, organisers will continue to look for ways to increase emerging markets exhibitor volumes at their agship events.

T  wo factors combine to mount a structural challenge to exhibitor value: the decline of total visitor time at events and the steady march of prices per square foot. W  ith visitor time-at-show in structural decline, shows need to compete more effectively for share of visitor time. As well as a segmented marketing approach that reaches and delivers high quality visitors to the show, organisers will need to provide these visitors with a more targeted, streamlined and value-added experience at the show. Additionally, winning organisers will increasingly be those who extend their contact with visitors outside the show. C  MOs focus on measurability of returns will continue to sharpen, and with an expanding menu of digital tools competing for their attention, and offering

1. Introduction.
While selling square feet continues to offer growth opportunities to organisers who can establish a presence in emerging trade show markets, it is apparent that in mature markets the primary focus of this paper organisers will need a broader skill set to drive long term growth. With an increasing number of resources and tools competing for share of both visitor time and exhibitor marketing budgets, organisers are increasingly challenged to demonstrate clear value to both groups. Launching and acquiring in dynamic, high growth sectors will continue to be at the heart of winning exhibitions strategies. However in addition to this core competency, AMR International believes that organisers may need to compete more aggressively for share of visitor time, and by extension, exhibitor marketing budget. This paper sets out how organisers can achieve this, and why it will entail a stronger presence beyond the physical event.

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2. The value challenge.

CMOs are focused more than ever on returns. While the need to make every marketing dollar count has undoubtedly been sharper during the recession, there is little question that the arrival of digital tools offering transparent measurement have transformed the landscape permanently, and increased the pressure on competing marketing channels to prove their value. At
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the same time, the exhibitions industry appears by one measure at least to have been delivering declining value to its customers. While there are a number of measures of exhibitions value, exhibitors will often frame value as a version of the following question: How much time with quality visitors has my dollar achieved? This can be represented as:

Exhibitor value

Number of visitors

Visitor time at show

Visitor quality

AMR International denes the combination of the rst and second elements of this equation as Total Visitor Time (TVT).

TVT has been in long term structural decline since as far back as 2000 (see Figure 1), while the marketing dollars spent on exhibiting have been increasing.

Figure 1: Total Visitor Time (TVT) at trade shows, US and Germany (CAGR 2000-15F).
Source: Exhibit Surveys, VSS , FKM, AMR International analysis
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US

Germany

-1.3%

2000-08

-1.3%

2000-08

-2.8%

2008-10

-3.6%

2008-10

-0.7%

2010-15F

-1.2%

2010-15F

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Between 2000 and 2008 TVT per exhibitor dollar dropped by 28% (see Figure 2). The 2008-10 period saw a recession-driven correction, however this was driven by a dramatic decline in exhibitor spend, rather than an increase in TVT. In 2010 this measure of exhibitor value remained 16% below 2000 levels.
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There is some good news for organisers: TVT per dollar is not the only measure of value; visitor quality is a fundamental value driver, and there are others. Occasionally declining

TVT can even benet a show by removing lower quality visitors from the halls. For example, the number of visitor companies may remain constant while the number of junior, non-decision making, visitors is reduced. However, on a fundamental level, declining TVT presents a challenge to the exhibitions industry, which cannot be met solely through measures focused on visitor quality, important though these are. Exhibitions organisers require longer term strategies that will allow them to compete more effectively for visitor time.

Figure 2: Exhibitor value* and total exhibitor spend (US market), 2000-2010
Notes: *Dened as Total Visitor Time (TVT) per exhibitor $ spent **Includes spending on rented space, sponsorship and advertising Source: VSS , Exhibit Surveys, AMR International analysis
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Exhibitor value* (RHS) Total exhibitor spend (LHS)** 12 100

10

80

8 Index 2000 = 100 60 $bn 6

8.9

8.6

8.5

8.7

8.9

9.7

10.3

11.0

11.1 9.7 9.1

40

20

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

3. Maximising visitor time.

There are three key levers organisers can use to maximise their share of visitor time. The most obvious lever is an optimised marketing approach, tailored by audience, to attract the right visitors in the rst instance. Secondly, organisers need to maximise the time visitors spend at show and the proportion of visitors who return to each edition. However, with TVT forecast to see further gradual decline (see Figure 1), these two levers, alone, may not be sufcient. AMR International believes winning strategies will increasingly employ a third lever to drive organisers share of visitor time: increasing share of visitor time outside the trade show.

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Figure 3: Three levers to maximise share of visitor time
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How can organisers maximise their share of visitor time within and beyond the walls of the trade show?

Source: AMR International analysis

Optimised marketing strategy

Increase visitor retention and time at show

Increase visitor time beyond trade show dates Build and promote online quality content, tools and resources Understand needs: Day in the life of visitors Develop year-round targeted resources

Content and delivery tailored to audience

Increase visitor Return on Time

Segment Tailored Targeted audience message delivery

Increase visitor productivity Reduce ineffective time Improve quality of interactions

Increase value

Must-have content

Networking opportunities

Optimised marketing entails identifying and reaching the right audience in the rst instance, and then tailoring the message to each segment of the audience. With high-powered segmentation tools now at their disposal, enabling the classication of myriad diverse customer personas amongst their audience (or desired audience), more sophisticated organisers are discovering that the targeted message can be far more effective than the blanket mail-out. Along with more obvious vetting measures to exclude lower quality visitors, targeted marketing is also an essential tool for maximising visitor quality, ensuring that organisers attract the visitors that exhibitors most want to see. This may entail a more meticulous use of data than organisers have traditionally employed, focusing on measurables that are driven by

exhibitor value perceptions. For example, the number of enterprises represented may be more important to exhibitors than the number of visitors; equally, visitors from a geographical region, with a particular job title, or from a given branch of a profession, may each be drivers of exhibitor value perceptions. Survey and segmentation tools additionally enable organisers to gauge which channels are likely to be most effective in reaching each element of their desired audience. With growth in B2B mobile and online usage continuing apace (see Figure 4) these channels will increasingly be digital, and in particular, interactive. B2B social media, which grew by 81% between 2008 and 1 2011 , is fast becoming an essential tool in the exhibitions organisers marketing kit.
203

Figure 4: B2B online and mobile consumption, hours (2005-15F)

Source: VSS , Toolbox/PJA Social Media index, AMR International analysis
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42 142

18
100

7
Index 2005 =100

161

124 93

Category

2005-10

Absolute growth 2010-2015F

Mobile Online

157% 33%

133% 30%

2005

2010

2015F

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Having delivered the audience, how do organisers persuade visitors to stay longer, and to return to the next edition? The answer is to improve Return on Time (RoT). Unless visitors feel that the show experience is delivering them a good return on their time, they are unlikely to be generous with it.
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There are two ways in which organisers can improve visitor RoT. The rst is to maximise visitors productivity, through tools that help them get to what they want more quickly, and the second is to add value, for example by offering must-have content or networking opportunities. A number of tools are being pioneered by organisers to streamline and increase the productivity of visitors show experience. Matchmaking tools, whether they be smart phone apps for use onsite, or online tools for pre-show use, are a key method for ensuring that visitors and exhibitors who need to meet, do so. For example, a feedback loop allows organisers to nd out visitor needs

and disseminate these to exhibitors to help them exhibit more effectively. Or, at the next level of sophistication, organisers can use information on individual visitor needs to effectively match an exhibitor and visitor and enable them to interact pre-show, making the onsite meeting more effective. Numerous further tools are emerging that help to ensure that visitors productivity at show is maximised a goal that every organiser should have front of mind. Content and networking opportunities will grow in importance as organisers look for ways to add value to visitors time at show. As well as a tool to attract high quality visitors, events within the exhibition such as conferences, seminars and awards dinners can provide additional revenue generating potential, for example through attendee fees or sponsorship. The third lever for maximising share of visitor time requires organisers to extend visitor contact further outside the dates of the exhibition (see Figure 5).

Figure 5: Expanding trade shows share of time in the visitor workflow (illustrative)
Source: AMR International analysis

Post-show

Show dates

Visitor contact dates

Trade show

Pre-show Visitor workow Network Keep up to date Learn / Problem-solve Find Evaluate Transact

Contact during trade show dates

Website access pre and post show

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Where once organisers had to understand visitor purchasing cycles, they increasingly now need to understand a day in the life of a visitor. Visitors goals, whether they be keeping up to date with product developments, to problem-solve or to nd and purchase product, can increasingly be met on an ongoing basis by online tools.
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While online is not a substitute for face-to-face, resources such as webinars, white papers, email bulletins, online directories, e-magazines, online expert forums, industry portals, and of course social media, have all become established information resources that, while falling short of offering the same value as face-to-face, have taken share of visitor time from old media. Thus organisers who are unable to engage visitors outside their physical event through development of some of these tools may nd themselves competing

for a diminishing share of visitors attention. Meanwhile those who do own online tools that are effective at year-round engagement, have in some instances launched into the exhibitions market. There are already several examples of e-media owners launching exhibitions successfully, and these online and live providers are likely to become increasingly attractive acquisition targets for traditional organisers. Since Emap rst started monetising online exhibitor listings through its Spring Fair marketplace, organisers have begun to understand the potential value of their supplier databases. But as with the content and networking examples above, these tools are dual-purpose. As well as presenting potential revenue opportunities, they need to be designed and positioned as essential visitor resources, effectively delivering to a broader information need outside trade show dates.

4. Demonstrating value.
CMOs focus on RoI is expected to continue to sharpen (see Figure 6). However, many exhibitors are still unable to accurately track the value captured by exhibiting. This places exhibitions at a disadvantage versus all things digital, which come with transparent measurement built-in. But once again it is digital tools that can help exhibitions to deliver, and prove, their value.

Figure 6: CMOs seven most important measures to gauge marketing success by 2015
Source: IBM CMO Report 2011
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Marketing ROI Customer experience Conversion rate/ new customers Overall sales Marketinginuenced sales Revenue per customer Social media metrics

63% 58% 48% 45% 42% 42% 38% % respondents

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The rst and fundamental step is to understand exhibitor goals up front. Survey data enables organisers to understand the diverse goals exhibitors have across the different segments of the exhibitor base be it brand exposure, meeting current customers, sales or just lead generation and the extent to which these are being met. Only then can organisers understand how and to whom they are delivering value, how they are overor under-delivering, and to respond accordingly, be it by raising prices, improving aspects of the event or adjusting the marketing strategy.
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post-show, the year on year growth in the number of architects who attended, the number of design directors from London who say they will return next year, each of which could be a deal-clincher for the potential exhibitor it is a data point that organisers can measure and share with exhibitors. Organisers can additionally leverage data to assist exhibitors with lead management. Through tracking mobile app user behaviour, organisers can capture insights on the visitor journey around the trade show, be it amount of time visitors spent at each stand, or the number of whitepapers downloaded. With this information, organisers can provide exhibitors with customised dashboards answering exhibitors questions, from how many leads were generated, to which products or demos attracted most interest.

The next step is proof of delivery, which as leading-edge organisers have realised, needs to be more tailored than the traditional post-show press release proclaiming total visitor numbers. However the exhibitor denes value it may be anything from the number of buyers from California, the total value of goods signed at or

5. Beyond booth sales.

As we have seen, visitor time has become more expensive to exhibitors, and this may in part be responsible for impacting the share of budget CMOs are willing to dedicate to the medium. Even before the downturn, square foot sales in the US only increased by (2) 1% CAGR between 2001 and 2007 , and while spend is forecast to increase to 2015 as the industry recovers from recession, it is forecast to lose share of overall budget (see Figure 7).
$27bn 7% 18%

Figure 7: US B2B media spend, by channel (2005-15F)

Source: VSS , AMR International analysis
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$27bn
100%

$31bn 8% 12%

$36bn
8% 25%
Category

7% 9%

Share gain/loss 2010-15F

CAGR 2010-15F

B2B Outsourced Custom Publishing E-Media

+1% +7% -7% +3% 0 -3%

8% 13% 0% 21% 6% 4% 6%

40%

35%

30%

23% 3% 9% 6%

B2B Magazines Webinars & other online live events Seminars & conferences

8%

8%

9%

36%

36%

33%

30% //

Trade shows Overall B2B media spend

2005

2007

//

2010

2015F

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The implication is that in mature markets, a strategy based solely upon sale of square feet carries long term risks. Whether they be generated at-show (for example through conference attendee revenues) or off-site as set out in Section 3 above, organisers will need to increase their share of non-stand revenues. The good news is that this is consistent with, and ties directly into, the share of visitor time strategy that organisers need to develop. In the rst instance this strategy is aimed at audience engagement; however, by understanding what a day in the life of visitors consists of, organisers
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will nd themselves better positioned to develop off-site/ online resources that can add value and gain traction among visitors. From a position of powerful audience engagement, organisers will then be well-placed to monetise these resources, whether through advertising, sponsorship, lead generation, user/attendee fees, or a mix of these. At the same time, this enables organisers to see a visitor strategy not merely as an investment, but as an opportunity to develop new revenue streams.

6. Extending brand permission.

As owners of arguably the most powerful B2B media channel, uniquely able to meet the diverse range of visitor needs from networking through to transacting, exhibition organisers are still best positioned to assume the high ground, expanding from their solid base of community engagement, to become trusted providers beyond the trade show format. The response, But we are trade show organisers we dont do content. And even if we did, thats not how our customers see us, is not uncommon or unjustied: organisers do need to extend their brand permission and be seen as credible providers. But as we have seen, e-media owners have successfully leveraged knowledge and insight into their audience to launch exhibitions, and exhibition organisers have the same resource at their disposal: the data which tells them what their customers, and perhaps more importantly, their customers customers need to do their jobs. Through a deep understanding of these needs organisers will have the platform to develop resources that gain trust and credibility among their audience.

Figure 8: Percentage of respondents who see F2F meetings as more effective than online/ virtual
Source: Oxford Economics USA, Meeting Professionals International 2009

Meetings with current customers Meetings with prospective customers

56%

82%

10

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7. Emerging market strategies.

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While developing a strategy to maximise RoT for visitors and demonstrate value to exhibitors is key for mature markets, organisers can achieve success through a more traditional approach in high growth markets, where the challenge lies in selecting the most effective method to achieve market entry and growth. China and Brazil remain the most attractive emerging markets, however, with competition high for assets in these tier 1 countries, organisers are looking to invest in 2nd tier markets. These include Russia, Turkey, GCC, India and Mexico, all offering attractive growth, but not without challenges (see Figure 9). Increasingly organisers are even exploring a 3rd tier of growth opportunities in markets such as Indonesia, Vietnam, Malaysia, Nigeria and Thailand. While the opportunities and challenges presented by each of these markets vary considerably, the range of methods for securing a market position is essentially the same for each. Organisers can gain a foothold and access to local events through acquisition or joint-venture. Alternatively they may have a geocloning strategy through partnering, or by setting up a local ofce. The key for successful market entry is choosing the method best-suited to organisers assets, skill set and risk prole. Partnering is a pragmatic start point. However, much depends on the quality, commitment, relationships and execution capability of the partner. Setting up an ofce in-country can be a subsequent step, but success depends on establishing relationships with venues, associations, authorities and local market participants. Failure to achieve any of these will be a serious impediment.

Acquisition offers the advantage of immediate critical mass, as the acquired event or organiser brings with it the necessary venue and market relationships. However the nancial stakes are higher, increasing risk and calling for thorough due diligence. With competition for aacquisition targets in attractive markets high amongst Western organisers, there can be a tendency for vendors to overprice, their assets again requiring a thorough assessment to enable purchasers to take a realistic view of a targets prospects, and guard against overpaying. Joint ventures offer some of the same advantages as acquisitions, particularly for smaller organisers who may wish to partner with larger more established organisers. They can also be a good rst step towards acquisition. However JVs are inherently unstable and can run into trouble when the partners nd they have diverging priorities, whereupon exiting the relationship can be arduous. Geocloning offers a highly attractive form of market entry. Ideally, geocloning an event allows organisers to leverage established exhibitor relationships to bring them to new growth markets which they are targeting. As with an acquisition, organisers need to understand the prospects for the event by thoroughly researching the local market need, competitive environment and execution challenges. If exhibitors are not structured internationally with an international budget remit, organisers may be able to clone a show concept, where the concept is strong enough to offer strong local market potential. However the challenge here is to establish relationships at the right decision-making level to bring to new markets. While organisers have typically cloned established western brands to tier 1 and 2 markets, the emergence of a 3rd tier presents the additional opportunity to clone successful tier 1 and 2 events to these tier 3 markets.

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Figure 9: Selected emerging exhibitions markets growth and key challenges
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Tier (attractiveness)

Countries

Market size 2011 ($m)

CAGR 2010-2015F

Key challenges

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China 1 Brazil

1,300

9% High level of competition for large attractive independent targets

Note: *While Hong Kong is a relatively established market, it offers a potential entry point to the Chinese market. Source: Globex 2011 , AMR International analysis
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500

10%

Hong Kong*

6%

Limited venue capacity

Russia

7%

Corruption / red tape

Turkey 2 GCC 200 700

8%

Market is centred on Istanbul Strength of position of incumbent venue owners and organisers

9%

Limited opportunity outside Dubai

India

10%

Limited venue capacity

Mexico

10%

High association ownership of top 20 shows Limited venue capacity in Mexico city

Notes 1.  Markets covered include US, Europe and Asia, Toolbox Social Media Study Wave 7 2.  VSS Communications Industry Forecast & Report, 2004, 2010 3.  IBM CMO Report 2011: N=1,734, CMOs across B2B and B2C brands, in 19 industries and 64 countries 4. Globex 2011 market report, The global exhibition organisation market: assessment and forecast to 2015

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Report authors.
Denzil Rankine Executive Chairman AMR International Limited Email: denzil.rankine@amrinternational.com Tel: +44 20 7534 3600
The contents of this report represent analysis by AMR International Ltd. of publicly available information or information provided by responsible individuals within the companies mentioned. It does not contain any information or data provided in condence by the clients of AMR International Ltd. The information and data contained in this document are based on a large number of sources and include subjective estimates, analysis and opinion. As such, AMR International Ltd. does not guarantee the accuracy of

Jonny Baynes Associate Director AMR International Limited Email: jonny.baynes@amrinternational.com Tel: +44 20 7534 3600
the contents and assumes no liability for inaccurate source materials, or actions taken by readers based on the ndings and opinions within. Copyright 2012 by AMR International Ltd. All Rights Reserved. No part of this publication may be reproduced, or transmitted in any form or by any means, whether electronic, mechanical, photocopying, recording or otherwise without the written permission of AMR International Ltd.

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Report authors.

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