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.
Everybody 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.