In her latest interview, EN guest editor Ruth Carter talks to Doug Emslie, group managing director at Tarsus Group, about what the future for the exhibitions industry may look like
There are many things that we can’t predict at the moment but the one thing we can be sure of is that the exhibition industry is going through a subtle yet fundamental change. Interestingly, it isn’t the seismic digital pivot that some predicted at the beginning of 2020 but a more subtle move away from pure play exhibitions to a holistic view of how we serve our customers.
You only have to look at the website of some of the leading organisations to see that they no longer position themselves as purely exhibition businesses. Clarion is one of the leading exhibition companies in the world and yet the home page on their website has not one single mention of the word ‘exhibition’. Same for Reed. and you have to dig fairly deep before you find that word mentioned by Informa.
What does this shift mean, what does the exhibition company of the future look like and will we be seeing a return to the ‘media neutral’ strategies that led the publishing industry in the 1990s?
I spoke to Doug Emslie, group managing director of Tarsus Group, to find out where he thought the industry was heading. Emslie has been in the exhibition industry for 28 years in a career that spans Blenheim, UBM and Tarsus, the latter where he was their first ever employee nearly 23 years ago. He has seen many changes and many reinventions. So how does he see the industry playing out?
“It is a bit of a case of back to the future in terms of approach at the moment. In the 80s and 90s, the broad-based media conglomerates got into the exhibition industry to service a community. You would sell that community ads and information which then moved to stand sales. This naturally evolved into creating pureplay exhibition organisers. It became all about the exhibitions with the other media being less highly rated and not considered as assets that people wanted to own.
“Those pureplay exhibition companies are starting to change and that will possibly be to the new term of ‘Omnichannel’. It will be all about how you are able to service a particular community and that will of course be about live shows but also about digital services.”
Is ‘digital services’ basically another way of saying virtual shows? With so much activity and talk last year around digital events and their potential impact on the live event activity, does Emslie see these as being a major player in the event mix going forward?
“It’s not about virtual shows. These are a rabbit hole that many people have gone down and got blinkered about as being the only digital solution. It will be about how we service a community based on what our customer wants. They want to do commerce, to network, to get information and be educated and we need to be providing those solutions through a myriad of different services.
“The classic live B2B show will still be fundamentally important and will remain the main platform for people to buy and sell. Industries are still desperate to get face-to-face with their customers. People need to ‘feel the cloth’ and ‘see the cut’ and that is very difficult to replicate in the virtual world. So inevitably the live show will still be predominant in our revenue mix. While it will vary by geography and sector, we expect to see 75% of our revenue coming from live shows with the rest coming from digital services.”
So, is the exhibition industry well positioned to move towards being an omnichannel provider? Doug feels that the biggest challenge will be attracting in the right sort of people with the right skill sets.
“We will need to start attracting more non-traditional exhibition people into our industry who are digital savvy. Bluntly, they may be people who are not burdened with our history and preconceptions about our industry.
“The industry is beginning to change but for individuals looking for jobs in our industry, it is going to be key to think about their current skills and the need to reengineer these. The days of people hoping round companies doing the same thing has gone. When the industry comes back to growth, and it will, companies will be looking to get different people to execute their new digital strategies as, for example, the skills of selling subscription services are different to selling space.”
Given we currently think show first and then everything else next, will the strategy development thought process need to change? How different will it be in five to 10 years’ time? Emslie feels that we can learn significantly from associations and use these as templates for how we run our businesses going forward.
“One of the changes that is definitely coming is the split between ‘for-profit organisers’ and ‘not-for-profit associations’. If you think about what an association does, it is effectively servicing its community first and foremost. It has subscription services, trade shows, research, lobbying etc. It will do a variety of services in exactly the way we see an omnichannel servicing business operating.
“An acceleration of that will be the combination of associations and for-profits. The drive to change the digital services will come from the for-profit organisations but associations actually have a lot of the relationships and skills sets already. Associations are big but slow and often admit that they don’t have the skill sets to evolve their business model. Whereas the for-profits do have those skill sets. Associations will evolve themselves by bringing in partners who can accelerate what they are trying to do which is a quite exciting opportunity for us.
“We can also learn a lot in terms of membership and subscription. So, as a subscriber to a series of digital products you will also be entitled to services at a live show that you would not be eligible for as a non-member. We are launching exactly this type of model for one of our sectors at Tarsus. Creating these subscription packages, identifying what our customers really value and how we can leverage that to sell them higher value products. I see that as an interesting evolution for our sector.”
Turning to marketing and engaging with communities, Emslie talks about how traditional marketing routes have already gone but new ones are fast appearing in the mix.
“It is going to be fascinating how that will change over the next year or two. We will see massive changes led by learnings from this pandemic in how people consume information and then adapting that knowledge to the business world.
“The traditional routes have already lessened and of course social media is going to be more and more important. But what we haven’t seen yet is the use of other tools and interactions. YouTube is going to be a very interesting as a tool to be used in a B2B context.
“At Tarsus, we have a major initiative with YouTube which we will be launching in the coming months. It is all about taking a different approach to the community: how they want to engage, what they are interested in but, more importantly, how they want information delivered. I definitely see a major change coming in that respect. People are used to Netflix and YouTube and we will see a change over the next year or two in how these platforms are used in a totally different way for a B2B context.”
The impact of the new omnichannel focus will naturally have an impact of acquisition targets and the ideal profile going forward. Emslie talks about how this profile has changed but also about how the pandemic is throwing up some exciting and dynamic new companies.
“At Tarsus, we have been working on three key pillars: how do we get back to live events; how do we integrate these digital services; how do we accelerate that digital agenda through acquisition.
“These are the three pillars of what we are working for in 2021 and beyond. That is different from the more recent trend of just buying more trade shows. It is a totally different approach to that but actually an approach that was there before. So there really is nothing new under the sun. People like to talk about these ‘new norms’ but actually it isn’t new, rather a different way of achieving the same thing.
“The landscape for M&A has changed dramatically over the past 12 months. Our list of targets has got a lot bigger and it looks totally different. One major opportunity will be around associations. The structural change around associations means they are looking at their strategies going forward and how they fund these. Their shows are often been the big financial drivers, but with no shows in 2020 and, in some cases 2021, they have to think about how they deliver on the changing strategies and how they fund these given the lack of incoming revenue. There will therefore be a lot of M&A in the association world as well as an increase in joint ventures.
“Because our industry is so entrepreneurial, as a result of this pandemic, we are also going to see lots of new and interesting businesses emerge. We are already looking at some small but exciting businesses where the entrepreneur has come up with a new angle that could be scaled a lot quicker with the right capital.
“While the current feeling is doom and gloom at the moment, out of that will come some interesting opportunities and there will be more M&A as a result. Companies like ours want to grow and acquisition remains a key part of that.”
Emslie also sees this year as a period of repositioning and winning audiences back as well as thinking about how we, as a sector, use our industry associations to ensure we are clearly on the Government’s agenda.
“Our biggest frustration remains with Government and not being allowed to return to running events. The pandemic has shown that the exhibition industry didn’t have the correct infrastructure in terms of advocacy and communication to talk to Government and therefore ensure that we were at the forefront of the discussion.
“There are lots of lessons. Not least that, as an industry, we need to focus less on small issues, such as car parking costs, but be structured and ready for when major issues come onto the table so that we have the right connections and ability to influence. That is the key issue and something we need to coordinate on a bigger scale with our industry associations.
“In terms of this year, the first quarter will be absolutely terrible. We have always known that, and it is playing out. Spring will bring more confidence driven by the vaccine. The Summer will be pivotal and, given the vaccine rollout plans, we may even see events in the UK in that period. However, I am expecting things to begin in all seriousness in the Autumn.
“Our industry shouldn’t be too hard on itself as shows will come back. When they do, they will look different to start with and we may see them 50-75% of what they were before. A small show isn’t necessarily a bad show though and the concept of not running a show because it will be smaller this time round is a bad one. It is naïve to think that shows will come straight back as they were before. We have to start somewhere, manage expectations, run shows and learn. A smaller show can still be a good product that actually delivers for the customers so long as we manage their expectations. We have to give confidence to markets by showing we can run safe events where people continue to do business.
“But we are an entrepreneurial industry and, once we have built confidence back there is no doubt in my mind that we will see a return to where we were before.”