The impact of the online world required the exhibition industry to look beyond the ordinary exhibition model, to re-evaluate what it is that exhibitions provide the markets they serve. Rather than be transposed into a new, confusing medium, our view of exhibitions had to be rewritten entirely.
Embracing the online world enabled exhibition organisers to add new value to their events, events that could now live longer in the public’s consciousness; we could accommodate vast communities that were inconceivable with a three-day physical show; the rich experience, dialogue and dissemination of content that we could offer had moved leaps and bounds beyond where it once was.
For an industry built on data – a defining element of a leading exhibition – the reach of online giants such as Google, Facebook and Amazon was enough to make even the most hardened international organisers salivate. Theirs was now a world waiting to be profiled, separated and categorised for their marketing pleasure.
Companies in this market were succeeding and succeeding big. The American online bargain company Groupon became very successful on the back of a simple model offering coupons to subscribers, giving them discounts on promotional third-party company offers. These companies use Groupon to offer their services at discounted rates proportional to the number of people who take advantage of the promotion.
For example, a company may provide a flight in a helicopter over London for US$400, but if enough people sign up for the flights through a Groupon promotion, the price drops significantly.
Sounds simple? Well evidently simple ideas are the most effective. In January 2011 the company issued around 30 million shares of stock to a group of third-party investors in exchange for US$946m in cash. The IPO price of $20 per share valued the firm at US$12.7bn, making it the second-biggest Internet company listing behind Google, valued at US$23.1bn in 2004.
However, at the time of writing Groupon shares trade below $7, valuing the company at a third of its initial public value, something in the region of US$4.5bn. This is the problem with overnight Internet sensations, or untested trading models: they are awfully prone to overnight devaluation.
Look closely and you’ll notice that what companies are buying into isn’t another online name-check: it’s actually Groupon’s huge database of clients. These firms take an initial hit in profits in exchange for access to millions of potential buyers. The company launched in Chicago in 2008, and by the end of 2014 92 million people around the world had downloaded its app. Yet this still comes nowhere near the might of Facebook with 1.44 billion active users. The fact that online companies have access to a potential and profiled database of so many is enough to make marketing directors’ heads spin.
A question soon emerged: was the future of event creation going to come from the search engines or the exhibition companies? And this is where organisers needed to exercise caution. There was a very real possibility that search engine firms would enter the space typically dominated by exhibition organisers with carefully focused databases and direct access to their audiences and reach.
“In the expo industry we work with a list of maybe 10,000 clients,” says ITE founder and industry veteran Roger Shashoua. “Facebook has a list of one billion names it can market events to directly. Someone working on a site such as Facebook would be able to target two million visitors rather than the 10,000 we can.”
This is the crucial point. While virtual events were never going to replace physical shows, their reach was already far greater than that of the organisers with their physical events. Whoever finds the holy grail of how to cater for and monetise these huge online communities stands to make a fortune.
None the less, organisers are a necessary element in that equation. “The search engines may have the potential client lists but they don’t have the knowledge needed to run a physical event,” Shashoua points out. “You can never rule out someone from the other side telling you they need you.”
Clearly, the sheer number of people declaring a shared interest or profession online, making associations via LinkedIn and so on, makes the act of searching for a like-minded person in a hall of 2,000 people redundant. If you want to single someone out, you find them online first. To paraphrase Reed Exhibitions’ chairman Mike Rusbridge, the days of chance encounters are now behind us.
The ideal exhibition model for many began to take the form of a modest capacity venue where buyers meet and hopefully shake hands with business partners they’ve already met online. In many cases signing the paperwork happens on the show floor.
Shashoua calls online the ‘final frontier’ for exhibition organisers. The advent of the online age presented the industry with new, digital, territory to colonise. There was little in the real world that had yet to be tackled. “Everything has been done: Russia, China, Brazil, India and Asia – nobody was there and almost everyone is there today,” he says. “The days of creating a group from scratch and building 100 per cent organically to rival the great companies are over.
“The only market left was the Internet. No one had yet found the way to fully exploit the potential of the Internet in regards to the exhibitions field.”
As evidenced by the stratospheric growth of Groupon and its Noughties dot.com contemporaries, the Internet was seen as the ideal breeding ground for entrepreneurs in the exhibition industry: “a level playing field for everyone”, says Shashoua.
“Entrepreneurs are driven by huge rewards and recognition in the industry. For an entrepreneur to succeed, a complicated market has to exist,” he said. “The market has to have a high barrier of entry with enormous risk, but the rewards have to be huge. An entrepreneur needs a situation where he or she can operate quickly and adapt to new situations when corporations cannot.”
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