The Clarion CEO on his early career, the power of events and navigating the world of private equity.
In mid-May 2018, EN travelled to the London offices of Clarion Events to sit down for a chat with CEO Russell Wilcox. Our conversation took place less than a year after the company was sold to investment firm Blackstone for a reported £600m, and in the months following the deal the organiser has already been involved in a series of large-scale acquisitions and mergers.
The exhibition industry has, on the whole, had a tumultuous relationship with investment and private equity firms, but it seems that Clarion at least has discovered a winning formula.
EN met with Wilcox to discover more about his early career, his time at Clarion and what the future of the company might hold.
How did you first get into the events industry?
I studied Philosophy, Politics and Economics at Oxford. I loved it but I’d had my fill by the time I left and I had no idea what to do. I didn’t do that usual run of management consultancies or civil service, I just knew that I wanted to move to London and – quite honestly – have a good time. I got a job in Croydon at Quantum Publishing, selling ad space in The Publican, and absolutely loved it.
It was old school; all the clichés that you hear about our generation growing up in that environment are true. It was clanging bells and numbers on walls and off to the pub at lunchtime for fags, three pints, a game of pool and come back and repeat. It was great; a lot of hard work, but very rewarding. London in the early 1990s in media was good fun; it was a good place to be.
My first move into events was actually in conferencing. My background prior to Clarion was in conferences and confexes, so content-led events rather than trade shows. In the mid-1990s I got a job with IIR, a real hub of conferencing. What appealed was the way that the advert was pitched; in the conference-producing role you had that combination of sales and sponsorship sales etc. with research. That really appealed to me.
I ran a business for IIR setting up a large-scale confex business out of New York, so running events all over the US. I loved that, loved the cultural exchange, really enjoyed my time there. I was 30 years old. I was running events in the pharmaceutical industry in Philadelphia, right in the heart of that particular world, and then, six months later, running a large confex in south-west America for the power industry…that’s exciting for a 30-year-old.
You appreciate a number of things about that American market; how large it is, how diverse it is, what a huge economy and engine it is, but also how it’s also relatively small. People move around on planes like we would on trains.
I had a background in sales, I had an interest in content, and I’d run teams, so I think that left me quite well placed to maximise or grow the commercial angles of those conferences.
So, where was I by then? By 2008, I’d had a 13-year career in conferences and confexes, worked in different parts of the world, had a lot of experience travelling, roles with WBR and IIR and Terrapinn. I wasn’t looking, but I was approached by Simon Kimble and the team at Clarion Events at the very beginning of 2008, just as they were selling the company to [private investment firm] Veronis Suhler Stevenson. Introducing confexes and conferences into the product mix at Clarion was a big part of that story. They wanted to expand the product set, so they’d moved out of the original business to consumer mix and diversified into B2B. We wanted to do two things: internationalise and expand the product set into more conferences and large-scale, scalable confexes.
Do you know how they heard about you?
Yes I do, actually. Piers Bearne had helped them craft those ideas, and I had worked with Piers at Terrapinn previously. Piers felt I would be interested in leading a charge like this. I got off a plane from Dubai, and landed to a voicemail message saying, ‘there’s an opportunity at a company called Clarion, you’ll never have heard of them but I think it would really suit you’. I met Simon in the old Earl’s Court building in March 2008, and that was that.
What was his pitch?
His pitch was timely, I suppose, for me. I’d worked in a lot of different organisers, I’d been in a lot of different scenarios, I’d run teams and products and divisions, and had some success, but I hadn’t the CEO of those businesses. By that stage, I was 37 years old, and this was an opportunity which was presented: ‘we want somebody who’s going to come in and be CEO of this part of the business’. This was an industry I didn’t really know much about, and one I’d had very little contact with, but the idea of having the chance to grow, and to expand my horizons was very appealing.
I thought about it for a long time, and decided that the only reason why I wouldn’t go for it, the only reason not to do it at that point, would have been fear. And so you hold your nose and jump in. What could go wrong?
That was the summer of 2008…interesting times.
We clearly had parts of the portfolio – UK consumer-facing areas – that were challenged. We had an intermediated mortgage business show, which was obliterated in one outing; it went from very large to close to zero in one go. Parts of the portfolio were under real pressure and some parts were more resilient. It was sector led, definitely. The gaming portfolio was reasonably resilient, we’d just acquired the defence and security portfolio from Reed, and that was operating on its own cycle.
An important point for Clarion was that what we did do, and what the investors supported us in doing, was keep pressing. We had the opportunity to press at a time when people were quite cautious. People weren’t buying, they were battening down the hatches and locking the doors but we kept going. Between 2008 and 2011 we made another 10 acquisitions.
When you first come in as a conference organiser the scale of some of these shows dwarfs anything you’ve come across in the conference world. The size, the complexity of the operational fulfilment, the delivery, and also the absolute levels of revenue and potentially profit involved are very significant. You’re impressed by the skill that it takes to deliver that, you’re impressed with the project management that goes into all of that, so I thought that that was really impressive. At the same time, some of those core functions are not that dissimilar; it is still a case of needing a sales operation, you need a marketing operation, you’re trying to attract visitors and exhibitors or sponsors; you need to have a relationship with the issues that are going on in the marketplace for the content of the show to be relevant.
I was struck in some instances by the view that there could be more content delivered at the shows. The exhibitors and the interactions taking place are the content, to a large degree, but I was used to more content in terms of information exchange or a more structured approach to the networking, to speakers, presentations, that kind of thing. I felt that there was a bit of an opportunity there, and some aspects of the cadence and operating rhythm of a conference business is much faster than that of a trade show business.
There’s a team of people that produce a show that happens once a year, and they walk off sit with anything between 50-80 per cent of the next year’s sales in the bag, and then their next show is in a year’s time. A conference team would knock out anywhere between three and 10 products in that time frame.
There’s a limit to how many products you can deliver in a year with one team that are going to be of a certain scale and quality, and that is what I think over time has held back the conference industry; their inability to move beyond that obsession with the speed of the machine. You don’t embed yourself as much as you would like in the industries you’re serving.
When I started in 1995, you could legitimately say, ‘this conference will bring you networking opportunities, the chance to interact with your industry peers, and knowledge that you are not able to access elsewhere’. The reality of the internet for the conference industry is that it made a lot of the content so widely available that there’s a naivety, I think, in conference organisers believing that presentations had an intrinsic value above and beyond what you could find by using Google. The real value of conferences, and the real content, becomes the thing that can’t be replicated, which is the group of people.
What about when it comes to proving that value to your customers?
Customer demands for ROI are becoming more pronounced and harder to meet, and that is a challenge for the industry. There are alternative marketing channels now, and a lot of the technologically enabled marketing channels are seen as offering a more linear, obvious and measurable ROI. Place an ad on a website and ‘x’ many clicks translates into ‘x’ many sales; you can follow it all the way along. That has posed a challenge to our industry, which historically has not sought to draw those direct links in its customers’ minds between participation and outcome.
I think that’s quite a good thing overall, because it’s pushing us as an industry to focus much more on those customer outcomes. People have less time, marketing budgets are under more scrutiny than ever before so, in that world, if our model is to facilitate trade and interaction we’ve just got to look at all of the ways we can seek to demonstrate more value.
Is it worth investing in tech to track ROI for exhibitors?
A trade show is never going to be a site where you can track every single interaction that takes place, and I also think one of the reasons trade shows have survived is because there is something in the serendipity of scaled opportunities to meet with people. I think it would be a shame, and also unrealistic, for anyone to think that trade shows will become this entirely tightly managed set of thousands of pre-booked, pre-programmed interactions, because that’s not the point.
People can do that without going to a trade show. They can identify suppliers they want to meet with. You need the magic of discovery, the magic of scale, the magic of content and spontaneity and everything else.
We are investing in products to help support that. Others are, I think, a bit further on than we are – our scaled investment in technology is relatively recent – but it is an area we’re very focused on and are committing a lot more resource going forward. What we also have is a culture around leadership. There’s a human dimension to this where, if your show directors are empowered, then they can get a long way by being in contact with their marketplace. You need to encourage that culture; don’t rely on computers, or data or technology to give you the answer.
Is there an over-arching ‘Clarion’ way of running an event that applies throughout the business?
Historically, one of our strengths has always been that we have been a relatively devolved business. We believe there’s more benefit in empowering people to have that view of how they should go to market in their own sector. You can get great commitment and output from people if they feel a sense of ownership. It’s a cliché, but it’s absolutely true. It’s also helped by the private equity model because people are quite literally invested in the outcomes.
What changed when Providence Equity acquired the business in 2015?
The overall strategy of buying and building decent assets is attractive, and that didn’t change, but what did change were the resources. We had access to resources via Providence that we didn’t have before, so we were able to really accelerate that and go through another phase of expansion. The main strategic goal at that point was a meaningful presence in the US, because we didn’t have any at that stage. We were delivering some product into the US, but we didn’t have an infrastructure there. We had been talking to the guys at [US trade and consumer organiser] Urban Expositions for some time, and we were able, with Providence’s support, to acquire Urban as an infrastructure and a foothold in the US. That was really significant, and we’ve pressed subsequently with follow-on deals, which, if you fast-forward now, leave us in a position to be able to do a transaction like [US trade organiser] Pennwell.
We made 18 acquisitions, the bulk of which were bolt-on and supported the existing portfolio positions in places like retail, gaming and energy. We also started the process of investing in that technology infrastructure under Providence as well. Two years later, we were in market again, which is testament to how much the company had grown during that period
In Blackstone [the investment firm that acquired Clarion in 2017], we have found the right partner to really accelerate the growth. They’ve got terrific resources, they’re one of the largest investors in the world, they understand the space, they’re very supportive of the business model and their ambition is well aligned with ours.
Where did we start this cycle? If you look back to the presentation we discussed with Blackstone and other potential buyers last summer, where did we think the next stage of the opportunity was for us? From a portfolio perspective, the opportunity was obvious for us, which was Asia, and we were underweight in Asia relative to the growth of that market and relative to the fundamental underlying economics of that part of the world, so we wanted to move into that part of the world if we could.
Clearly, there are not unlimited opportunities to do that at scale, but we had that opportunity with [Hong Kong-based trade organiser] Global Sources, so that’s a really significant deal for us.
Is this rate of growth sustainable for Clarion?
You can have the ambition, you can have the strategic aspiration and the energy as a management team and as an investor group to go after that, and clearly that’s necessary, but you also can only play the cards that are out there. You have to take the world as you find it, opportunities like Pennwell don’t come along very often; our opportunity to do something like the Global Sources deal doesn’t come along very often.
The great thing about where we are at the minute and the partnership with Blackstone is that we are willing and in a position to be able to act on those opportunities and make them happen. The company has more than doubled in the six months since Blackstone acquired us. Could we more than double again in the next six months? I think that that would be quite a tall order.
Hopefully the private equity interest and high-level mergers in the industry will incentivise more launches at a lower level?
Definitely. If you don’t have a developmental mindset in the business, and if you’re not focused on your MDs or your divisional leadership or your sector leadership, then someone will, for sure, because there’s gold in them there hills. There are plenty of people that come out of industries with good ideas, and I think a lot of the best launches, through time, have been by people who’ve come out of markets and said, ‘I can do this better than any of the incumbents, and I’m going to give it a go’.
Those people end up selling to people like us, and doing very well out of that. I think the industry’s in a great place, and I think that amidst all of the noise – all of the digital noise – it’s more differentiated than ever before.