Paul Woodward finds Emerald’s CEO is very pro-active in battling short term headwinds to implement some ambitious future plans:
With 21 delayed shows scheduled to take place during August, it is shaping up to be the busiest month ever in Emerald Holdings’ history. “Typically,” Hervé Sedky (pictured), Emerald’s president and CEO told Exhibition World, “August is a slower month for us”. And this is causing some challenges.
“It is nice to get back, but it’s putting an immense amount of pressure on our organisation,” Sedky says, adding “from a resource planning, staffing perspective, there are definitely some real challenges and not just for ourselves internally”. He’s also seeing it among what he calls the ‘downstream partners’, the general contractors, venues, and other organisations supporting the fairs. “There’s definitely going to be some choppy environments that we have all to operate in. But we’re ready for it and doing our best to make sure that it's transparent to the customer,” Sedky says.
The day after our interview, in the company’s Q2 results announcement to investors, Sedky said: “We are set to stage 86 live events through the second half of the year, representing the most active show schedule in Emerald’s history”. When we asked whether the pressures on capacity he’d described could lead to them having to turn away business, he said “No, we’re not expecting that”.
Emerald has put in place a programme where all its employees are encouraged to attend and work at its events. “So, they’re being trained and we’re doing things differently. I think that there is innovation that is a result of the situation that we're in. And I think that this is actually quite good,” Sedky suggests. “There’s a lot of benefits out of having every single employee participate in some way in the production of a large show, whether they’re in accounting, or data security, or whatever role”.
Sedky is upbeat about the enthusiasm among clients to return to live events although he does note that the speed of return is varying a lot among the various sectors in which the company is engaged, different geographies, and the timing of the events. Almost all of the August events have been postponed from earlier in the year and it’s clear that some companies are waiting for ‘normal’ timing next year before they re-engage.
Exhibitor company size is a key factor in determining their interest in returning now. As with most exhibition organisers, some 80% of Emerald’s customers are small businesses, Sedky says. “The enthusiasm among small businesses is very, very high. [They] need our platform to be successful,” he says and stresses that exhibitions are “really essential to the reopening of the economy to small companies doing business. They use it to sell, to meet their own customers, to meet new customers, and it’s a really, really important platform for them”.
The fact that larger companies are less keen to re-engage with trade fairs right now is, Sedky believes, “largely because of travel policies”. CFOs, he says, have also been cutting back hard on travel and entertainment budgets. This means that companies are either not coming back at all this year or are sending much smaller groups of participants.
Sedky is, though, bullish about future prospects and says that “forward looking numbers are very strong”. The day after our interview, the company told the market “Our bookings for our 2022 first quarter events are tracking much closer to pre-Covid-19 levels”. So, Sedky is confident that there will be continued support for exhibitions in the future. “Short term, though, we have some headwinds with large companies”.
As with all exhibition businesses, Emerald has been experimenting with a significantly expanded digital activity over the past 12 months. “We’ve learned a ton in the last year, in terms of what to do, and quite honestly also what not to do,” Sedky says.
Building on a portfolio which includes 35 business publications, Emerald has focused on services which can delight users who are looking to be inspired and find new things to discover, Sedky says. At the same time, the team has tried to keep a laser sharp focus on the core digital business activity of creating leads for its customers. “We're creating what I'm calling internally here the Emerald Discovery Engine,” Sedky says. “What we are doing is just being maniacally focused on inspiring and creating leads no matter what we do.”
The company has, though, taken one step further with its digital offering. “At the very end of last year, beginning of this year, we thought [about] what we also need to close that loop. So not only is it about inspiring and getting leads, but it’s also transacting,” he says. With that in mind, the company acquired a business called PlumRiver in January and has integrated that into a digital marketplace product it is calling Elastic Suites. “We are launching it starting with a couple of sectors. And then we’ll just scale that more broadly across our entire business,” says Sedky.
In the Q2 earnings announcement, he told investors “our recent acquisition of PlumRiver continues to deliver on our expectations with more than double the number of new client wins as compared to this point last year”. The company reported revenues of $3.4m from PlumRiver and one other acquisition in Q2.
So far, what has worked particularly well in a digital format is the delivery of content in multiple formats. “It’s been going well in terms of customer feedback,” Sedky says “and in terms of adding more people to our databases, which hopefully will convert into more attendees at our shows. That’s what we expect. We don't know that yet. But we will be tracking that.”
What has not worked well, he says, is trying to copy a physical experience online. “Things like a showroom have just not been very successful,” Sedky admits. “Our attendees don’t mind them; they go through it. I think they’re generally okay with it. They don’t spend a lot of time on it, which I think is a problem. But honestly, the thing is the online digital exhibitors have not got a return on their investments. And the NPS is low.”
We close our discussion with a question very familiar to Emerald CEOs: where in the world might they expand? It is the largest US-based for-profit exhibition organiser and has been for some years, but its business is almost entirely US based. Sedky’s response to that is “while we are the largest US based organiser, we still have very small share of the US business. And so having this focus on the US is really important to us, at least in the short and mid term”. Things may change over time he says, although “that’s not a big part of our growth strategy”.
He is more excited about an accelerated launch programme in the US. “We’ve created this new group called Emerald accelerator that is all about launching and we expect to be launching six to eight shows per year,” Sedky says. “That new group is now fully staffed. We’ve been able to attract some phenomenal talent. We just actually reviewed the pipeline with our board earlier this week, and it's really exciting.”
