Industry View
The bird’s
eye view
Colin Morrison, former CEO/MD of companies including
EMAP, Reed Business Information, Future, and Hearst,
and author of award-winning media blog Flashes &
Flames, on the wider view of M&A in exhibitions
E
“Everywhere you
look in traditional
media today,
publishers and
broadcasters
talk about events
and so-called
‘experiential
media’.”
42 — July
verybody in marketing and media loves
exhibitions. They are the ‘traditional media’
category, which has been growing revenue at
an average of six per cent for the past 10 years,
at a time when so much media is being rocked
by the digital competition for consumer time
and marketing money. For all the intensity of
competition in the £30bn exhibitions industry,
its attractions are easy to explain by: organisers’
profit growth, the level of international expansion,
the boom in new purpose-built venues, and the
consequent explosion in M&A.
The biggest deals really started in earnest in
2015, when UBM discarded its legacy publishing
to become a pure-play exhibitions company.
It splashed some £1.5bn on the acquisition of
Advanstar, in the US, and Allworld, in Asia.
Next came Informa’s £1.2bn acquisition of the
exhibitions-led Penton on the way to its audacious
£4.3bn takeover of UBM itself.
That’s only a slice of the activity of the last two
years during which some £7bn has been spent on
deals like Clarion, Mack Brooks, Comexposium,
CloserStill, PennWell, the NEC – and UBM.
Those deals, and the long-standing venue-
owning organisers in France and Germany,
underline the continuing domination of trade
shows by European companies. However, the
global industry all but started in the US in 1970.
That was the year B2B magazine publisher
Cahners entered the ‘trade show’ business.
Cahners expanded strongly by buying up a
whole swathe of exhibitions in diverse sectors. In
1980, it became the market leader with revenue of
$90m. The company which had become the first
broad-based exhibition organiser in the US, soon
did the same with acquisitions across Europe and
Asia. In the 1980s, it merged with Industrial &
Trade Fairs, a UK-based organiser started by the
Financial Times and the diversified media group
then known as Reed International – which had
acquired Cahners.
In the mid 1990s, Reed took what seemed like
a radical step, separating its exhibitions from the
B2B magazines which had largely created them. It
proved to be a far-sighted move which gave fresh
impetus to launch and acquire new events almost
everywhere. By 2001, the then Reed Elsevier’s
exhibitions division had increased revenue by 25
per cent to £446m – then the only profit growth in
its huge but faltering B2B media group.
Everywhere you look in traditional media today,
publishers of newspapers, magazines, B2B media
and broadcasters talk about events and so-called
‘experiential media’. It underlines the attractions
of ‘face-to-face’ as an antidote to the virtual world
for consumers and business people alike.
It explains the success of exhibitions and the
reasons why there have been dramatic increases
in the prices being paid for them.
These prices partly reflect the high levels of
interest among private equity firms which have
been increasingly active in exhibitions ownership.
Their appetite has been stoked by the conviction
that the transactional nature of exhibitions
(where real people place real orders) protects
them from the digital disruption that has wrecked
even the best publishers.
But exhibitions must always be viewed as part
of the wider media and marketing services sector
and can still be vulnerable to disruption. That is
why exhibition companies must maximise their
use of data to understand the behaviour and
motivation of their customers (which most are
doing, of course). But they should also invest in
R&D in order to think laterally and creatively
about what the future just might hold for their
business. In doing so, they will increase their long-
term prospects and their chances of being the
disruptor rather than the disrupted. Just in case.