The global picture
Developed from remarks made in Milan, 26th March 2012 at the International Forum on the Exhibition Industry
Managing Director, UFI
Participating in an exhibitions industry event in Milan is something special for UFI as it marks a home-coming for us. The first meeting of 20 international fair organizers took place in this city in February 1925 and led to the formation of what was then known as the Union des Foires Internationales. Milan was UFI’s headquarters for the first 12 years of our 87 year history. The fact that 2/3 of those original companies which met in February are still UFI members is a clear indication that this is an industry with real staying power. There are a number of lessons we can learn from this, not least that ours is a very resilient industry with a very long tradition of business success.
The survey presented by our friends from Milan at the International Forum demonstrates very positive ratings for the major international exhibitions which are represented by UFI’s membership. They represent a vital business development tool for all types of companies, but particularly for the SME manufacturers which continue to represent a vital component of Europe’s economic recovery and future health.
Much has, of course, changed since 1925 and the focus of UFI’s activity, along with that of our members, is now far more global. The industry in Europe remains strong in most places, particularly for the key international fairs and still represents 50% of our membership. But, the strongest growth in our industry, as with our membership, has been coming from other parts of the world.
Nowhere has been completely immune from the impact of the crisis and that has been clearly shown by UFI’s Global Barometer research, carried out on a regular basis since late 2008. This asks a set of simple questions about sales and profit growth (or, in some cases, sadly, reductions). Asia’s export-oriented economies were hit before other markets in late 2008 but had bounced back quite strongly by mid/late-2009. America followed while Europe was slower to slump but has, as we know, also been much slower to bounce back. By mid-2011 we thought that most of the indicators were looking relatively positive.
As we are all aware, however, there has been a second wave of economic uncertainty and, by the end of 2011 when the survey was most recently run, members were becoming concerned again about the prospects for 2012 and 2013. Asian exhibition organizers are the least pessimistic, with many still predicting strong growth. Our survey doesn’t break out north and south America but, if it did, I am confident that we would see much more optimism across Latin American markets than in the north although the USA exhibitions markets has also firmly outperformed GDP growth by at least 1% according to research from the Center for Exhibition Industry Research (CEIR).
In translating these business indicators into a discussion of the impact of the crisis on the industry, one clear impact has been the focus on business development in the important emerging markets. All of the key players from the UK, Germany, France, Italy and other countries have been building new business activities in the BRIC countries. The Brazilian market has been particularly active over the past 18 – 24 months while almost everybody now has some kind of position which they are developing in the enormous Chinese market, second now in terms of total square metres sold only to the United States. As well as the BRICs, there is also a good deal of attention being paid to what one bank has termed the “MINT” markets – Mexico, Indonesia, Nigeria and Turkey. Other interesting markets include Colombia, and Vietnam. Southern Africa is also creating a lot of interest although that market remains relatively small and under-developed for the time being.
What we have also seen during the economic crisis period is a flight to quality and a squeezing of smaller, mid-market events. This is not a period in which marketers are willing to take risks in the types of events they are choosing. One of the most frightening presentations at a recent UFI meeting, and that is not an adjective I would normally use to describe speakers at our industry conferences, was the exhibitions manager of a major German bathroom fittings company. She told our 2010 European Seminar how her company had reduced its normal international programme of 30+ exhibitions a year supported by head office to one event in 2009. Even as they stepped back up their marketing efforts, she believed that they would in the future only support 10 or so exhibitions each year. If you are the organiser of one of the industry’s definitive events, and there are two or three of them around the world for every industry, then you are well-positioned. If you are organising a good quality show in a second-tier market or the number three or four event in an important market, then you may well be in some degree of trouble.
However, we should not underestimate the entrepreneurial energy of many of the companies in our industry, even those which have been members of UFI for almost 90 years. While some exhibitions have died or been substantially reduced in size and scope, others have been imaginatively reinvented by their managers. New business models are emerging which will carry many of these events forward into the 21st century and beyond as the valuable marketing tools which they have always been.
One key appears to be the ongoing efforts to take advantage of the opportunities presented by Internet-based marketing tools. The Chief Executive of the world’s largest exhibition company, Reed, has said that ‘the random contact model is over’. What he means by this, I think, is that we can no longer be seen to be serving our customers well by simply presenting exhibition visitors with the opportunity to wander around our events hoping that they’ll come across a stand with something that interests them at a time when the staff on that stand are free to talk to them. Much more imaginative and effective business-matching tools will be needed to ensure that most types of trade fair are providing better return on investment and value for time for those who use them. Of course, the opportunity for serendipitous discovery of new products, services and clients is one of the most attractive features of exhibitions over their online alternatives and we need to balance the efficiency of matchmaking with the chance to make new and unexpected discoveries at our events.
At the heart of all this is a laser-sharp focus on the industries we serve: from our customers’ point of view, the exhibition business itself is largely unimportant. They are interested in their own ‘worlds’ and see our events as part of their industry. What is critical to our success is our understanding of those industries we serve. And, again taking advantage of the opportunities presented by the Internet, we can combine our leading event brands with a strong online presence to provide year-round content and business opportunity to our clients.
Our recent UFI Delphi Project, a future-focused research exercise identifying key trends for the next decade, singled out “Thought Leadership” as the single most important chance to take our industry forward profitably and to position it strongly against its competition. The Milan research presented at the Forum spoke of 73% of opinion leaders attending the main trade fairs for their industry. That represents a tremendous concentration of the key people who are used to working with our brands at least once a year. The challenge is to have them working with and through our brands year round.
Not many exhibition companies are yet doing this very effectively, but an awful lot of them are trying to find the best way to make this work. Our friends from Korea have probably been very far-sighted in bringing the development of their exhibition industry under the umbrella of the Ministry of Knowledge Economy. It will be interesting to see what fruit that initiative bears in the next few years.
Despite the challenges presented by the global economic crisis of the past four years, the exhibition industry stands in remarkably good health. Most of the leaders report continued growth in many of their major events. Once again, the resilience of the medium and the power of exhibitions as a marketing tool have been well demonstrated. There are some interesting and exciting challenges ahead and we at UFI remain confident that the companies in this industry will seize those challenges with great vigour and enthusiasm.