Winning Exhibition Strategies through 2015 and Beyond

Webinar – May 10, 2012 at 12PM EST

Richard Mead

Managing Director

The Jordan, Edmiston Group, Inc.

Denzil Rankine

Executive Chairman

AMR International

EVENT INDUSTRY GROWING, ACQUIRING

AND TRANSFORMING

Richard DW Mead

The Jordan, Edmiston Group, Inc.

May 10, 2012

3

You Can’t Shake Hands on the Internet

Historically, print magazines were the leading medium in B2B marketing spend in the U.S.,

providing a regular monthly link between buyers and sellers

In 2000, B2B print and online advertising represented over 60% of total B2B media spending

Today, we are at an inflection point, with trade show revenues surpassing print magazine

revenues, but ahead even further in profitability

Trade Shows – at the Heart of Commerce

Exhibitors, attendees and

investors in most industries

now perceive trade shows as

being at the heart of

international and domestic

commerce

Multi-billion dollar transactions

are consummated on show

floors every year, many with

just a handshake

Source: The Veronis Suhler Stevenson Communications Industry Forecast, 25th Edition, 2011-2015

4

Exhibition Industry Performance and Growth

AMR International’s authoritative global

industry forecast shows 4-9% growth

annually to 2015, with the US forecast at

5% CAGR

US Exhibition Industry Grew 2.7% in 2011; Forecast 5% CAGR to 2015

The US industry outpaced real GDP growth

by 1% in 2011, according to CEIR (Center

for Exhibition Industry Research)

The industry saw gains in all four key

metrics for the year – NSF, Revenue,

Number of Exhibitors and Attendance

US Brazil Germany

5%

China

4%

8% 9%

5%

World

EXHIBITION INDUSTRY CAGR, 2011-2015F

5

Strong Increase in M&A Activity in Events Market

Q1 2012 saw a large increase in number of deals,

although deal value was down slightly from Q1 2011

M&A activity led by corporations looking for strategic

tuck-in acquisitions, with PE firms increasing their

participation

Credit markets are rebounding, with leverage available

for healthy, growing, profitable businesses

Industry SectorNo. of

Deals

Value

(millions)

No. of

Deals

Value

(millions)

No. of

DealsValue

B2B Online Media & Technology 17 $182 23 $2,838 (26%) (94%)

B2C Online Media & Technology 70 $1,540 78 $3,357 (10%) (54%)

Business-to-Business Media 9 $63 4 $15 125% nm

Consumer Magazines 16 $83 7 $1,421 129% (94%)

Database & Information Services 20 $3,862 11 $564 82% nm

Education Information, Technology & Training 12 $516 12 $463 0% 12%

Exhibitions & Conferences 14 $258 6 $34 133% nm

Marketing & Interactive Services 145 $3,081 57 $1,922 154% 60%

Mobile Media & Technology 30 $682 23 $469 30% 46%

Total 333 $10,267 221 $11,081 51% (7%)

Source: JEGI Transaction Database

Media, Information, Marketing Services & Technology M&A Activity

2012 2011

January -March January - March % Change

Events market saw a large

increase in both number of

deals and value in Q1 2012

UBM led the way with five

deals in Q1, primarily in

emerging markets (China

and India), as well as

Yankee Group’s 4G World,

a US-based telecom and

wireless tradeshow

6

Trade Shows in the Limelight

Trade shows are long established as the preeminent marketplace where buyers

and sellers meet face-to-face to do business

Trade shows performed better than ad-driven media during the recession, and

most are now fully recovered, with growth in 2011 and beyond

Trade shows have strong EBITDA margins and cash flow characteristics,

having provided quality services to their served communities for decades

Trade show formats can be “geo-cloned”, making it easier for operators to replicate

this marketing channel wherever their customers want to do business

Trade shows have deep, trusted relationships with their communities

Consequently, trade shows are uniquely positioned to expand those relationships

through new, online initiatives, leading to more effective, timely lead generation

year round, and ultimately to the Holy Grail of e-commerce

How Have Trade Shows Taken “Center Stage” in the B2B Marketing Mix?

7

The Future is Bright for Trade Shows

Trade shows are evolving from single events serving their markets for a few days

annually into core components of multi-platform, year-round marketing engines

Trade shows have a golden opportunity to utilize the Internet, software and other B2B

marketing products to create a more fully integrated marketing platform

Broadening their geographic reach and increasing their percentage of marketing budgets

These efforts will only strengthen barriers to entry as well as making trade show

business more fully integrated with their customers’ marketing plans

To achieve this, we expect trade show companies will continue to acquire event

businesses to extend their reach in current and new markets, as well as investing in

technology and talent

Investors will increasingly see this new trade show model as meeting their key

investment criteria, leading to superior ROI and valuations

Capital will flow into the trade show industry. Everyone will be happy.

Trade Show Companies Will Continue to Acquire and

Operators Will Continue to Innovate

8

JEGI Welcomes the AMR Initiative on Trade Shows

JEGI has had the good fortune to be deeply involved in the B2B media and

marketing sector for 25 years

Participating in the major trade show organizations – SISO, IAEE and CEIR

The firm is proud to have represented clients in many of the signature B2B media

M&A transactions, particularly those involving trade shows

We are delighted to support Denzil Rankine and his colleagues at AMR

International and applaud the work that they have undertaken in the B2B media

and trade show industry

AMR International has provided strategic support to most of the top 20 trade show

organizers globally over the past 20 years, as well as numerous PE funds

Now for the Big Show…

Winning exhibitions strategies to 2015 and beyond Denzil Rankine

Webinar May 10, 2012

10

Source: Globex 2011, AMR International analysis

Exhibitions market growth by geography 2010-15F, $bn

Region CAGR

2010-15F

8%

4%

6%

4

6

17

4

21

5

2015F

32

2010

25

ROW

High growth

Mature

Brazil China GCC India Russia Turkey Hong Kong

USA France Germany Italy Spain UK

Exhibitions markets have substantially differing growth rates

11

To succeed in 2015, organizers need a dual strategy

Winning exhibitions strategy in 2015

Mature markets

Address challenge of delivering value

Emerging markets

Determine most suitable options for market entry and

growth

12

Seven most important measures to gauge marketing success by 2015*

Marketing ROI

Customer experience

Conversion rate/ new customers

63%

Marketing- influenced sales

48%

Revenue per customer

Social media metrics

Overall sales

58%

45%

42%

42%

38%

Note: *N=1,734, CMOs across B2B and B2C brands, in 19 industries and 64 countries Source: IBM CMO Report 2011

CMOs’ focus on ROI is sharper than ever. By 2015 it will be the single most important measure of marketing success

“Today’s CMOs are in much the same position as CFOs were a decade ago, when their role was evolving from guardian of the purse strings to strategic business adviser.” (IBM)

13

Exhibitor value proposition

Exhibitions are about delivering quality attendees. Total Attendee Time (TAT) is fundamental to the value proposition

Exhibitor $

Attendee quality

Time with quality attendees

TAT

Total Attendee Time is calculated as the number of attendees attending the trade show multiplied by

the hours they spend at the show

What do organizers offer exhibitors?

Number of attendees

Attendee time at show

x x

Source: AMR International analysis

14

Exhibitor value through access to attendee time, US

0

10

20

30

40

50

60

70

80

90

100

$b

n

12

11

10

9

8

7

6

5

4

3

2

1

0 2010

9.1

2009

9.7

2008

11.1

2007

11.0

2006

10.3

2005

9.7

2004

8.9

2003

8.7

2002

8.5

2001

8.6

2000

8.9

Note: *Defined as total attendee time (TAT) per exhibitor $ spent. Includes spend on exhibitor rented space, fees, sponsorship and advertising Source: VSS, Exhibit Surveys, AMR International analysis

Total exhibitor spend (LHS)

Exhibitor value (RHS) *

Ind

ex 20

00

= 10

0

TAT per $ declined by 28% between 2000-2008; in 2010, it was still 16% below 2000 levels

15

CAGR, Total Attendee Time (TAT) spent at trade shows

Source: Exhibit Surveys, VSS, FKM, AMR International analysis

-0.7%

-2.8%

-1.3%

-1.2%

-3.6%

-1.3% 2000-08

2008-10

2010-15F

US Germany

2002-08

2008-10

2010-15F

AMR expects the structural decline in TAT to continue to 2015

16

B2B media spend, US (2005-2015F)

Source: VSS, AMR International analysis

Category Share

gain/loss 2010-15F

CAGR 2010-15F

+1% 8%

+7% 13%

-7% 0

+3% 21%

0 6%

-3% 4%

Overall B2B media spend - 6%

While trade shows will continue to grow, CMOs will increasingly dedicate share of budget to digital

2005

2

$27bn

11

3

2010

2

4

2007

5

8

$27bn

2

2015F

$31bn

11

10 11

3 2

8

2

3

11

$36bn

1 2

9

3

9

E-Media

B2B Magazines

B2B Outsourced Custom Publishing

Webinars & other online live events

Seminars & conferences

Tradeshows

17

Three levers to increase share of attendee time – detail

Source: AMR International analysis

Organizers have three levers to increase their share of attendee time within and beyond the show

Increase attendee retention and time at show

Increase

attendee productivity

Increase value

Better inter-

actions

Reduce ineffective

time

Must-have

content

Better Network-

ing

Increase Attendee Return on Time

Increase attendee time beyond trade

show dates

Maximize share of attendee time

Optimized marketing strategy

Quality online content, tools and

resources

Content and delivery tailored to audience

Tailored message

Segment audience

Targeted delivery

365 targeted

resources

Under-stand needs

18

203

142

2015F 2010

161

42

18

100

124

93

2005

7

Absolute growth

Category 2005-10 2010-15F

Mobile 157% 133%

Online 33% 30%

Ind

ex 2

00

5 =

10

0

*Note: US, Europe & Asia Source: VSS, Toolbox/PJA Social Media index, AMR International analysis

US growth in professional online and mobile consumption, hours

With growth in B2B mobile and online usage continuing apace, organizers will increasingly use digital and interactive media to reach their audience

Mobile has increased its share of B2B internet usage, growing 133% between 2010-15

Interactive media is also seeing steep growth; B2B social media usage grew by 81% between 2008 and 2011*

19

Keep up to date

Learn / Problem-

solve

Find Evaluate Transact Network

Trade shows can meet a broad range of attendee needs. Organizers must understand what attendee need(s) each show meets

Attendee workflow

Sourcing

“In the know”

? ? ? ?

Where are we?

Attendee workflow

20

Pre-show

Post-show

Keep up to date

Learn / Problem-solve

Find Evaluate Transact Network

Trade show

Att

end

ee c

on

tact

dat

es

Attendee workflow

Note: Contact during trade show dates, Website access pre and post-show Source: AMR International analysis

Show dates

Trade show organizers then have the opportunity to extend their audience contact beyond the confines of the trade show dates

Extending trade shows’ share of time within the attendee workflow

21

Keep up to date

Learn / Problem-solve

Find Evaluate Transact Network

Att

en

de

e c

on

tact

Attendee workflow

Source: AMR International analysis

Trade shows can extend their attendee contact through a range of digital and face-to-face products and services

Attendee resources

Webinars

Online expert forums

Email newsletters

White papers

E-magazines

Conferences

Online directories

E-commerce Awards, dinners

Industry portals

F2F Online

22

Percentage of respondents who see F2F meetings as more effective than online/virtual

Source: Oxford Economics USA, Meeting Professionals International, 2009

82%

56%

Meetings with prospective customers

Meetings with current

customers

Digital interaction helps extend and expand commercial relationships, but is not a substitute for F2F

Online is not as a substitute for face-to-face, in particular for establishing new client relationships

23

To succeed in 2015, organizers need a dual strategy

Winning exhibitions strategy in 2015

Mature markets

Address challenge of delivering value

Emerging markets

Determine most suitable options for market entry and

growth

24

Tier 1 markets offer high growth, but are increasingly competitive; Tier 2 markets can be good alternatives

Tier Countries Market size 2011 ($m)

CAGR

2010-2015F Key challenges

1 China 1,300 9%

High level of competition for large attractive independent targets Brazil 500 10%

2

Hong Kong*

200-700

6% Limited venue capacity

Russia 7% Corruption / red tape

Turkey 8% Market is centered on Istanbul Strength of position of incumbent venue owners and organizers

GCC 9% Limited opportunity outside Dubai

India 10% Limited venue capacity

Mexico 10% High association ownership of top 20 shows High crime rate Limited venue capacity in Mexico City

*While Hong Kong is a relatively established market, it offers a potential entry point to the Chinese market Source: Globex 2011, AMR International analysis

High growth markets

25

A variety of approaches are available to gain a foothold and achieve growth in emerging markets

Source: AMR International analysis

Emerging markets – potential approaches and key considerations

Growth markets exposure

Partnering

Relationships and execution

capability of partner

Set up country office

Relationships with venues, associations, authorities &

market

Acquisition

Price

Competition for targets

Due diligence

Joint venture

Constrained decision making

power

Clone

Cloneable exhibitor

relationships

Competitive position

Pote

nti

al

app

roac

h

Key

co

nsi

de

rati

on

s

26

In Summary

Trade shows continue to offer attractive growth opportunities

In mature markets, two factors combine to mount a structural challenge to exhibitor value: the decline in total attendee time at events; and the steady increase in prices per square foot

Organizers need to compete more effectively for share of attendee time, both during and after the show

Trade shows need to get smarter with digital tools, to understand and track exhibitor value, to support exhibitors with their broader marketing efforts and to better understand and meet the needs of the attendee base

Organizers should increasingly develop revenue generating opportunities outside the traditional show format (e.g., matchmaking, sponsorship or user fees)

Emerging markets continue to offer strong underlying growth and organizers should consider a range of options to increase their portfolio exposure to these markets, and select the approach best suited to their capability and needs

27

Questions?

Frankfurt ■ London ■ New York ■ Paris ■

AMR International Consulting Inc. 655 Third Avenue

Suite 2500-05 New York NY 10017

United States of America

Tel: +1 (646) 465 5970 Fax: +1 (646) 465 5988

www.amrinternational.com

Tel: +1 (646) 465 5970 Email: denzil.rankine@amrinternational.com

Denzil Rankine Executive Chairman

The Jordan, Edmiston Group, Inc. 150 East 52nd Street, 18th Floor New York, NY 10022 United States Tel: +212-754-0710 Fax: +212-754-0337 www.jegi.com

Tel: +212-754-0710 Email: richardm@jegi.com

Richard Mead Managing Director