ABM Brand Extension Committee Case Study Spotlight Topic: Trade Show Publisher: Property: Audience: Contact: Hoyt

Publishing P-O-P Times Marketers of consumer products and services and retailers who use pointof-purchase packaging displays, signs and fixtures. Peter W. Hoyt, President Phone: (847) 675-7400 E-mail: peter_hoyt@hoytpub.com Website:www.hoytpub.com

One Small Publishers Decision to Enter the Tradeshow Business: A History

In 1991, Hoyt Publishing Co. was little more than three years old and had just one magazine in its entire product portfolio. That title, P-O-P Times, served an audience of 16,000 brand marketers, delivering news and information about retail marketing initiatives involving P-O-P or point-of-purchase displays, signs and fixtures. P-O-P Times published only six times that year, generating advertising revenue of $1.2 million. Today, the company boasts of a dramatically expanded portfolio of products serving the PO-P industry: 2 trade magazines (P-O-P Times/monthly and P-O-P Design/bi-monthly); 2 annual tradeshows, held in New York and Chicago; 2 annual industry conferences, one for manufacturers and one for their clients; a major industry awards program; an industry Hall of Fame; the industrys only charity benefit, which has netted over $1 million in nine years; a new industry association, supported by a massive internet database for the in-store marketing industry. Annual revenue from these combined operations now exceeds $8 million annually. Over the years, the company has been able to develop new products in other fields, such as the home dcor arena, as well. In retrospect, its safe to say that the tipping point in achieving this unrivaled P-O-P industry prominence was the decision, made ten years ago, to enter the trade show business. Find an Underserved Niche From the early 1960s to the mid-1990s, the P-O-P industrys only tradeshow was an annual event owned by POPAI (Point-of-Purchase Advertising International), an industry trade association. And indeed, POPAI Marketplace was the event of the year. It alternated each year between Chicago and New York, and was routinely attended by several thousand brand marketers, advertising agency executives and P-O-P industry leaders. However, the monopoly status that the association enjoyed gave both the staff and the board of directors a false sense of superiority. Their hubris led POPAI to conclude that they could demand top dollar from any non-qualified attendees who wanted admission to the show. If you were not a qualified brand marketer, the price of admission to POPAI Marketplace was $500 for non-members. It was even $250 for non-qualifying members of POPAI --- no exceptions. This approach accomplished two objectives: The association could promote and extol the purity of their qualified attendance, and the show generated almost $100,000 per year in gate receipts. The flaw was that POPAI was limiting the future growth of their show floor because suppliers to the trade (those selling OEM components that get designed into displays) were not interested in exhibiting at POPAI Marketplace. The audience that OEM suppliers wanted to reach, the manufacturers or producers of P-O-P, were not attending in sufficient numbers because of the excessive per-person entry fee. Only the owners, presidents and a few senior-level execs from the bigger P-O-P-producing companies were willing to shell out that much money to walk the show. The all-important designers and purchasing people, who had a genuine interest in and the authority to spec those OEM products, could rarely justify the expense. We noticed this strategic disconnection and brought it to the attention of the associations managers. We asserted that if they opened up the doors and let everyone in for a nominal fee, they could expand exhibit sales by 30% to 50%. However, the

association by then had become dependent on the easy money of the gate receipts and remained determined to maintain a pure audience of brand marketer attendees. There were other forces at play as well. As with most non-profit associations, POPAIs board of directors was calling the shots. In this case, the directors represented many of the biggest of exhibitors in POPAI Marketplace. Quite naturally, they did not want hundreds of their rivals walking the show and stealing design ideas. They also did not want to expose their networks of sub-vendors by encouraging these suppliers to exhibit. Like the associations managers, the board believed the show would continue to make more money, at a higher margin, by limiting access. However, when the executive director of POPAI rejected our suggestion, he allowed that if we wanted to try to launch a small show for the P-O-P trade, we were free to do so. (I believe he was convinced that such an effort would fail.) So, armed with this passive stamp of approval from POPAI, we tentatively decided that we would look into hosting a tradeshow for designers and producers of P-O-P displays, signs and fixtures.

Find a Friend. Learn a Lot. The business of hosting trade shows is quite different from publishing trade magazines. However, both endeavors strive to make a market. Both succeed only when they create a platform that unites meaningful numbers of buyers and sellers. Its often said that the readers of our publications are equivalent to the attendees of our shows, that our advertisers are equal to the exhibitors, and that our seminars are akin to editorial content. All of which is true to a point. In reality, the myriad details that must be carried out to publish a monthly magazine have little in common with the innumerable tasks involved in putting on an annual tradeshow. We suspected, early on, that this might be the case, so we went in search of a partner who might help ease us into the business. The most-obvious avenues did not pan out for a variety of reasons: The tradeshow-production companies wanted all or most of the equity in the show. They essentially proposed that they would have access to our lists and our good name so that they could build their show. They believed that we would be satisfied just selling extra ad pages because of our relationship to the event. The association-management firms, who often specialize in putting on shows, correctly deduced that we would drop them as soon as we figured out the game.

We felt confident that we knew the market and could sell the space. What we needed was someone who knew how to rent the hall, arrange for enough hotel rooms, oversee the decoration and the labor, organize the pre- and on-site registration efforts, and oversee the operations in general. The solution, we ultimately discovered, was another show that needed us, and would stand to benefit if we were to co-locate our events. The Exhibit Builder Expo was a small, hotel-sized event managed by a bright guy named Russ Eisenhardt. Russ was an independent space rep who both sold space in Exhibit Builder magazine and produced their show for them. Their show included exhibitors who sold OEM components that could be designed into trade show exhibits such as light boxes, aluminum poles, banners, signing systems and other related materials and components. Trade show builders are first cousins to P-O-P producers. They are related, with a few crossover companies, but overall there is very little direct competition. Russ wanted to infuse some new energy into the Exhibit Builder Expo. We needed a safe haven in which to test our theories about hosting a show geared to the P-O-P trade. In 1991, we struck a deal with Exhibit Builder. We contracted to sell 45 10x10 booths next to their usual complement of 80 10x10 exhibits. [Note: Neophytes in this business think and speak in terms of 10x10s. Experienced show producers speak only in terms of net square feet.] Basically we agreed to split both the revenue and the costs of the show proportionately, and added a fee for Russ. We produced a brochure for the show that included a small seminar program, ran it in our magazine and mailed it over our lists several times. We sold all the exhibit space in just a few months. We then focused on promoting the event to attendees through editorial coverage. Russ told us that if we didnt treat this event as a big deal editorially, then our readers could not be expected to think of it as a big deal. We took that advice to heart, and it helped us get past initial concerns about pandering. We held our inaugural event in the lower level of New Yorks Sheraton hotel in the spring of 1992. Our profit was just over $50,000. Attendance was good, and it enabled us to sign 111 companies with 120 10x10 booths (or 12,000 net square feet) for our 1993 show at the Rosemont Convention Center outside

Chicago. The Exhibit Builder guys sold their customary 80 booths with a total of 20,000 net square feet. This show was developing into a nice, small event. Both because of our time on the track and the momentum that we were gaining from the new show, our advertising sales had picked up appreciably. By the end of 1993, our ad sales were up to $2.5 million. In 1994 we decided to increase the frequency of P-O-P Times to ten times per year. Meanwhile, because of Russs tutelage and because wed also systematically interviewed scores of other people on all aspects of show production, we mutually decided to part company with Exhibit Builder after our second successful show together. Quite methodically, wed learned much of what we needed to know about this business. One growing frustration was that with only one show per year, it was hard to gain experience quickly. Another reality was that the rhythm of producing an annual show is foreign to employees used to putting out monthly magazines. Building up staff is difficult, and it is hard to maintain enthusiasm. Magazines are published to a steady drumbeat. Everyone knows his or her role. Those people sell ads. That group writes copy. She organizes ad materials. He lays it out. We all work together, every day, to move the process forward as far as necessary to stay on schedule. Running a trade show is like running for elective office. Grind away every day and set the stage for an entire year until Election Day. If you get out the vote and attract a good crowd, youll be in good shape. If not, youll have to spin it, and dig a little deeper for the next twelve months.

Strike Out on Your Own In 1994, our first year on our own, we held the show at the Chicago Hilton & Towers. One hundred and twenty companies rented 16,500 net square feet of exhibit space. That year, we also decided to niche P-O-P Times (focusing it more squarely, for example, on in-store issues that mostly affect the brand marketers) while launching a sister publication entitled P-O-P Design, which would feature P-O-P industry and product news. We calculated, based on the number of attendees and exhibitor companies that we were now attracting, that we could support a magazine geared directly to the information needs of the shows target market designers and manufacturers. There probably arent too many instances where the creation of a trade show precedes the creation of its complementary trade magazine. In our case, neither the association nor the other publishers in our field had quantified the aggregate purchasing authority of these P-O-P designers, display engineers and purchasing agents. By our estimates, even though they worked in small firms, they controlled at least $5 billion in spending. By backing into the show business, wed teed up a huge opportunity for a new publication that would bolster the show throughout the year. P-O-P Design has been an extremely important contributor to our well being ever since.

Look For Opportunities to Expand. Be Bold. POPAI was watching and becoming concerned. We began hearing rumors that that the associations executive director was trying to lure another publisher into the market to counter our growing influence. The publisher with whom they were flirting was much larger than us, and produced both a successful magazine and a tradeshow for the retail fixturing/visual merchandising markets. Just as exhibit design is a first cousin to P-O-P design, retail fixturing is a first cousin of P-O-P marketing. If this alliance was formed, our flagship publication P-O-P Times would soon have a new and worthy rival. Rather than wait and let others control our fate, we took the offensive. Shortly after the 1994 show, we decided internally that at the opening keynote address of the 1995 show, we would publicly announce a new name and positioning for the show that would enable it to compete directly with POPAI Marketplace. While we were almost a year away from any announcement, we nonetheless got very serious about staffing. For example, wed been using all of our magazine salespeople to sell the exhibit space in our shows. When we reached the internal decision to wade into the deep end of the tradeshow pool, we immediately moved our best salesperson over to sell the tradeshow full time. In 1995 we held our fourth and final display design show near the New Jersey Meadowlands. We announced there that in 1996, the show would be renamed The P-O-P Show and take on a new, broader direction. Thats when sales really took off. Aside from some very uncomfortable politics with the association, the overall fruits of this decision were very satisfying: 1995: 26,500 net square feet 1996: 49,600 net square feet

1997: 62,000 net square feet 1998: 86,000 net square feet

In 1999, we split the show geographically, and started holding it twice a year in both Chicago and New York. Sales grew to a combined-show high in 2001 of 115,000 net square feet.

A Word to the Wise While we will never doubt the wisdom of adding trade shows to our portfolio, a strong word of caution is in order. If an issue of your magazine gets poor readership, no one is the wiser. If attendance at your show is poor, you are exposed immediately. One year, on the second day of our show in New York, Hurricane Floyd blew into the tristate area. The mayor effectively shut down the city. A full day with no attendees is a long day when surrounded by hundreds of unhappy exhibitors. On another occasion, the sudden bankruptcy of a major trucking firm two days before our show tied up much of the exhibit freight. As luck would have it, we also happened to be in New York on th September 11 and had to cancel the entire event. Weve heard of shows being hit by tornadoes, blanketed by blizzards, ruined by power outages and called off due to riots. The current economy has not been favorable to this industry either. Attendance is down across the board and very few shows have escaped this recession unharmed. But even the elements you like to think you can control can be your undoing. Decorators, exhibit facilities, registration companies and hotels can all smell an inexperienced show producer a mile away. Without an experienced negotiator to represent your interests its almost certain that you will be entangled in punitive contracts and pay premium prices for just about everything. This is not a business for the faint of heart. It takes years to learn and perfect. Trade shows, when properly organized, are very profitable and drive hundreds of ad pages. The synergy is perfect. But whenever the reward is great, the risk is commensurate.