EN guest editor Phil Soar suggests an in-built reluctance to demonstrate the exhibition sector’s true scale will prevent it from ever being fully appreciated by Government, but that audited information may not always paint a pretty picture
‘Tell me something interesting’ is often not a bad way to start a conversation. I remember a university interview when I was asked: ‘Tell me something interesting about squirrels.’ (They don’t know where they have buried their nuts is one good answer).
But let’s say you were asked to say something interesting about the trade show and exhibition world. Where might you start?
- Well, as a business it turns over… we don’t know that.
- It employs around… how many? We’re not sure.
- Generally, it is worth… how much annually… to its shareholders?
- What is the biggest exhibition in the World?
- Are we growing or contracting? We’re not sure… why not?
- Projected future growth rates… we have no idea.
- How do you define an exhibition? Good question.
- What real economic value does the exhibition industry add to, say, the West Midlands? I’m not sure. No one has ever asked me.
This is not true of other industries. Almost invariably the size and trajectory of a business sector is well known, well covered in the city and the media, and the facts are essential to understanding the investment which goes into it.
What is an exhibition?
We could even start with: what is an exhibition; what is a trade show; what is an event? The AEO ran into this conundrum when it decided to change its name from Association of Exhibition Organisers to Association of Event Organisers. The idea was a simple: we can expand our base, become more influential with Government and the like (how’s that one worked out, guys?) and generate more funds. But being blunt, it hasn’t worked. There are very few members who are not from the traditional exhibition fields.
Paul Thandi CBE (CEO of the NEC), who has dealt closely with the Government at the most senior levels in the past 18 months, argues very convincingly that we will never gain traction with Government and the Civil Service until we can define ourselves for better. Until we can provide convincing statistics which show how big the industry is, what economic benefit it adds, how many people are employed, and which and where are the biggest shows and what they do for the UK economy in areas like the West Midlands then Government will never pay attention to, or even understand, what the trade show/exhibition sector is. We seem largely incapable of articulating what we are. (For more of Paul’s interesting insights to the perils and pleasures of working with the Government for the past 18 months, see my upcoming videocast with him).
Why don’t we tell the world about ourselves?
In days gone by, there often seemed an intimate link with trade publications – and the publications ruled the roost. The trade shows were basically the add-ons. This is where Reed, DMG and to a lesser extent EMAP came from: there was no pure play exhibition group before Blenheim (and the Mark Allen group still operates successfully as a publication-first business). So, any debate about ‘Whither exhibitions?’ never arose until the 1990s – it was a non-question. In most of Europe, of course, there was never a need to ask the question; the Messen model was different and obvious.
But, even since the 1990s, it has been enormously difficult to obtain reliable and complete information on our UK business. Other countries – particularly AUMA in Germany – do rather better, but even there one can find fault with the way information is collected as the venues and the shows are so fully integrated.
So why have trade shows chosen to avoid telling the world about themselves?
The cynical reason: because they don’t have to.
Sectors which might be called comparable – magazines, newspapers, radio, web portals, television, on-line sales sites – have one thing in common. They all ultimately sell on ‘Cost per thousand’. They all have direct competitors, and they attract advertising by saying: ‘You can reach your prime customers more cheaply with us than by using the others.’ Or, in cases like Vogue or The Economist, ‘Ours is a very special, clearly defined market (which we will prove) which you are trying to reach.’
And one consequence of this is that the statistics they provide about their readership, their listenership, their clicks, must be seen to be reliable. Hence the army of bodies which audit and publish this information – it is vital for these sectors that they can supply and largely prove the numbers they claim. Otherwise, their claim on their advertisers’ dollars would have little value.
The same is true of virtually all consumer products: they face direct, visible, competition and must price themselves accordingly.
Information thrives with competition. But trade shows and most other events don’t have that competitive problem. They are unique, or close to unique, in their marketplaces – WTM, Frankfurt Book Fair, Dubai Air Show etc. They don’t have to spend their time matching their prices and their offerings against an array of direct competitors. There aren’t any direct competitors.
And even when there are apparent marginal competitors, pricing is rarely a factor. Spring Fair and Top Drawer don’t regard each other as central to their pricing policy; they attract differently sized audiences in different locations (whereas all magazines are on display together in a single WHS) and hence are far less competitive than outsiders might imagine.
So, we have reached a stage (in the UK at least) where organisers do not publish the turnover of their events, the revenues they generate, and (in most cases) an accurate count of their attendance.
The damaging loss of audited information
The AEO had to give up auditing after the 2008/2009 crisis. In 2008 ABC audited 150 events. In 2019 it was just 17. Information is provided for the SaSie report, but this is of debatable value on a show by show basis (though it is very good in aggregate). One annual set I looked at recently showed that 19 separate events all claimed attendances of exactly 20,000.
And then there is survivor bias, the bane of all statisticians. Just one example: let’s say a trade show group has 20 events with attendances ranging from 1,000 to 10,000 and averaging 5,000 – so 100,000 visitors in total. Then the next year things don’t go so well and the aggregate attendance over all the 20 events drops to 90,000. That gives an average of 4,500 – a fall of 10%.
But let’s say that this group quietly decides to abandon or sell its four smallest events – which have an aggregate attendance of just 5,000 among the four. The stats now look different. They now have 16 events rather than 20 with an aggregate attendance (over all 16 events) of 85,000. That is an average of 5,313 (85,000 divided by 16).
The bane of survivor bias
So, the company proudly proclaims that things are going well: Average attendance at our shows is up from 5,000 last year to 5,313 this year – a 6% increase! So, a 10% fall has been magically translated into a 6% rise, and they don’t have to say anywhere that there are now just 16 events rather than 20.
In 2010, after the loss of the Motor Show, the total number of visitors to UK exhibitions fell 7% year-on-year. But by quoting ‘like for like’ the Motor Show could be taken out of the numbers – and the outcome then was flat (0.1% increase). Either number is true, and untrue. It is not that the numbers are not right, they are not even wrong.
These are very common ways of misrepresenting information in the industry – and is very hard to spot as there is no database of events which makes survivor bias visible. The same can be true of any data which is provided – there has long been a tendency for companies to report where the figures are rising and not mention shows where they are falling. And this does not even get into differences in nomenclature: ‘attendees’ and ‘visitors’ being the most common deceit.
So, all of this begs the question: what would be different if we did provide accurate visitor numbers, accurate square metres, accurate revenue, comprehensive demographics such as socio-economic groupings and real job titles and much more?
Would there be a flight to quality or, more accurately, perceived quality? Would niche events fare better than broad based events (as is happening with magazines)? And what about the exhibitor at a show with 10,000 visitors who meets one buyer and wins a massive order? What significance to her/him are the other 9,999 visitors?
Perhaps these are among the reasons that trade show companies and the industry as a whole shows little inclination to provide certifiable information – or perhaps it is the same reason we don’t go to the dentist until we get toothache.