© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
April 22, 2013 11:32 pm
Not so long ago the business of organising exhibitions had fallen out of fashion. Investors balked at its vulnerability to economic shocks and fretted that digital services would make face-to-face industry gatherings redundant.
But at the London Book Fair last week business was booming. More than 25,000 attendees thronged the Earls Court arena to do deals with publishers, agents and booksellers from 60 countries.
In a sign of how the fair has adapted since its inception in the 1970s, the “digital zone” was a third bigger than last year. Samsung, the South Korean electronics group, exhibited for the first time, joining dozens of new players in the market for ebooks.
Organised by Reed Elsevier, the book fair is an example of how the $26bn global exhibitions business, far from declining, has become one of the most successful parts of the media world.
Informa, a business information group like Reed, said in a trading update on Monday that revenues from large events had increased in the “high single digits” during the first quarter, at a time when most of its divisions contracted.
While print magazines and other old-fashioned media businesses face upheaval from digital rivals, exhibitions remain an important part of doing business across sectors as diverse as cosmetics and steel manufacturing.
“What exhibitions are about is creating a very efficient environment for buying and selling,” says Claudio Aspesi, a media analyst at Bernstein Research. “There’s a personal chemistry that comes from being in the same room and watching people’s body language that can’t come from anywhere else.”
The sector is forecast to increase revenues by about 5 per cent a year for the next few years, with growth at double that pace in emerging markets, according to AMR International, a consultancy that specialises in exhibitions.
Opportunities for consolidation are plentiful because the market is highly fragmented.
Reed is the largest participant, but has just 5 per cent of the market. The FTSE 100 company spends about $100m a year buying exhibitions. It takes shows that are successful in Europe or the US and “geo-clones” them in Asia.
Mike Rusbridge has been chief executive of Reed’s exhibitions business for 17 years. During that period the division has quadrupled its revenues to £850m and expanded into more than 40 countries, he says. The group has 54 shows in China alone. “There’s no reason why we shouldn’t be able to double the size of the business in the next few years,” Mr Rusbridge says. “The world remains our oyster.”
As well as opening about 30 exhibitions a year in new industries or countries, Reed is experimenting with what it calls “summits”. These small shows, which take place in luxury holiday resorts, are aimed at niche industries dominated by a few companies.
Reed also wants to make its existing shows more important to the industries they serve – so that, in the words of Mr Rusbridge, they become “the glue” that binds a sector together.
For example, to keep its annual Las Vegas jewellery show relevant all year round, Reed offers an online marketplace and a magazine that it publishes 10 times a year. It hopes to use this “365-day” model across its portfolio.
Everyone in the events business recognises that its fortunes are closely linked to the health of the global economy. When economic activity fell in 2009, revenues from exhibitions tumbled 14 per cent, according to AMR.
But the sector has bounced back fast, and executives are confident that they are operating in a long-term sweet spot.
David Levin, chief executive, says UBM is in a perfect position to “ride the wave of prosperity in emerging markets”. China accounts for a third of its events revenues.
Like its rivals UBM is building online communities around its shows. Not only does this make the events more engaging; it also helps the company collect valuable data about exhibitors and attendees.
“This is the one form of media that is totally enhanced and lives symbiotically with the web,” says Mr Levin.
“The analogy is to the music business. The digital content business in music was wiped out but the live rock show, the concert, thrives.”
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in