The reach of online giants such as Google, Facebook and Amazon is enough to make the most hardened of international organisers salivate. There’s a world out there waiting to be profiled, separated and categorised for our marketing pleasure.
When they succeed, they succeed big. Ever heard of Groupon? The US company became very successful on the back of a simple model offering coupons to subscribers, giving them discounts on promotional third-party company offers. These companies use Groupon to offer their services at discounted rates proportional to the number of people who take advantage of the promotion.
For example, a company may provide a flight in a helicopter over London for US$400, but if enough people sign up for the flights through a Groupon promotion, the price drops significantly.
Sounds simple? Well evidently simple ideas are the most effective. At the end of October the company sold 35 million shares – about five per cent of the company – for US$20 each, raising $700m from little more than a list of names. This valued the firm at $12.7bn, making it the second-biggest Internet company listing behind Google; valued at $23.1bn in 2004.
Look closely and you’ll notice what companies are buying into isn’t online presence, it’s Groupon’s huge database of clients, taking an initial hit in profits in exchange for access to millions of potential buyers. The company has amassed well over 100 million users across the world since launching in Chicago in 2008. And this comes nowhere near the might of Facebook with upwards of 800 million. The fact that online companies have access to a potential and profiled database of so many is enough to make marketing directors’ heads spin.
It’s also the reason industry veteran, ITE founder and the man behind investment vehicle ExpoFund Roger Shashoua calls online the ‘final frontier’ for exhibition organisers. He believes not that virtual exhibitions will play a part in our futures, but that virtual exhibitions are the only uncharted territory remaining for today’s exhibition organiser.
Calling all entrepreneurs
While most of us know online exhibitions are here to stay, few know how to make money from them. The day they start making a significant contribution to top line revenues still seems a fair way off. Shashoua believes the answer may not come from within the exhibition industry, rather the real solutions will come from the companies already making big money from big databases online.
“Entrepreneurs are driven by huge rewards and recognition in the industry. For an entrepreneur to succeed, a complicated market has to exist,” he tells EW. “The market has to have a high barrier of entry with enormous risk but the rewards have to be huge. An entrepreneur needs a situation where he or she can operate quickly and adapt to new situations when corporations cannot.
“Everything has been done: Russia, China, Brazil, India and Asia – nobody was there and almost everyone is there today. The days of creating a group from scratch and building 100 per cent organically to rival the great companies are over.”
But it’s not in the physical world where the greatest gains are to be made. “The only market left is the Internet,” he says. ”No one has yet found the way to fully exploit the potential of the Internet in regards to the exhibitions field.”
As evidenced by the stratospheric growth of Groupon and its dot.com contemporaries, the Internet is the ideal breeding ground for entrepreneurs in the exhibition industry; “a level playing field for everyone”, according to Shashoua.
“UBM, Reed, Informa and others are starting to tap the potential of online events but let’s be clear: they as well as others have only just scratched the surface. No one really knows yet how to monetise this – and that is incredibly exciting. I believe 30-40 per cent of all shows will have to go virtual.
“What is exciting for me is that while the Internet offers enormous opportunities it will never replace the need for physical events. Our industry is in great shape but I do believe the Internet is a game-changer for the industry and entrepreneurs.”
But as Shashoua says, someone has to be able to provide the key for the lock. Who will it be? Is it going to come from the search engines or the expo companies? This is where he claims organisers need to exercise caution. “I see search engines entering our industry with online events taking advantage of their focused databases with direct access to their audiences and reach,” he comments.
“In the expo industry we work with a list of maybe 10,000 clients. Facebook will soon have a list of one billion names it can market events to directly. Someone working on a site such as Facebook would be able to target two million visitors rather than the 10,000 we can.
“We will likely see a shift in the dynamic between exhibitions and virtual exhibitions. Where a physical exhibition would logically develop a virtual element, or, as is the case with UBM’s Comdex, become an entirely online entity, now we will begin to see online events spawn a number of physical elements.
“Knowing these companies have invested so much money in virtual exhibitions, I think an intelligent entrepreneur would be very keen to find the golden solution: how to monetise it.”
This is the point. While virtual events will never completely replace physical shows, their reach is already far greater than we experience with a physical event. Whoever cracks the holy grail of how to monetise them will make a fortune.
Organisers are a necessary element in that equation. “The search engines may have the potential client lists but they don’t have the knowledge needed to run a physical event,” points out Shashoua. “You can never rule out someone from the other side telling you they need you.”
Any comments? Email exhibitionworld@mashmedia.net
