As show producers approach the year 2000, increasingly they are lookingfor ways to improve their bottom line. In fact, just about everyone seems tobe formulating a strategy for growth that will keep them competitive into thenext millennium. Association executives need to generate more income to fundtheir organizations' activities.

Show management companies are under pressure to increase profitabilityof the shows they produce for others. And independent show producers areseeking additional revenue to stay competitive.

From the melee two key strategies for growth have emerged: growth throughacquisitions; and "gain sharing," or building revenue streamsin existing shows through management partnerships and expanded services.How does an organization decide which course is best for them?

"The first step has to be the development of a strategic plan followedby a corporate development plan," says Jeff Gold, President of GoldmarkAdvisers, a New York City investment banking firm that handles trade showacquisitions. "After a company's management decides where it wantsto be, the development plan details how the strategic plan is to be realized."It usually takes about three months to put together the plans, whether it'sdone internally or by an outside adviser. "We like to get involvedearly and prepare the corporate development plan, the road map we'll useto find good acquisition candidates," he says.

Before a company decides upon acquisitions as a corporate strategy, managementhas to decide if it has the resources to get there. "It takes moneyand good management to have a successful growth-through-acquisition strategy,"Gold says.

For companies with good financial resources, growth through acquisitionsoffers several advantages, including increasing gross profits, gaining marketshare and supporting activities of other divisions in the company, suchas publishing. Increasingly, top executives are citing another acquisitionbenefit: adding top management to the company team.

"For us, talent is a key consideration," says Regina StarrRidley, Senior Vice President of San Francisco-based Miller Freeman Inc.(MFI). "The secret to a successful show is to have expertise on staff.And when acquisition of a show gives us additional expertise, we look atit as a bonus."

Small companies without large financial resources don't have to be shutout of the acquisition game. "We get approached all the time by venturecapitalists who want to finance our purchase of a show," says Tom Corcoran,President of Chicago-based Corcoran Expositions Inc. "They like thehigh return on investment shows offer. They are looking for companies withsolid management and infrastructure and that want to grow."

Finding the right fit
Once the growth-through-acquisition strategy is decided upon, it's bestto go out in the market, identify candidates and make an acquisition. "It'sOK to answer the phone when it rings, but you have to be careful of peoplewho want to sell you shows," Gold says. "If they are looking fora buyer, their show is probably on a downhill slide."

Most acquisition strategies focus on adding shows in areas where thecompany already has existing strengths, filling gaps in the company's exhibitionportfolio or in penetrating growth markets. "We have a business developmentgroup that examines our development plan several times a year," saysPatricia Dolson, President, North America, for Reed Exhibition Cos. (REC),Norwalk, CT. "Usually, our focus is on acquisitions in the industrieswe already participate in. These are our strategic markets. We don't buyshows to fold them. We look to acquire shows to cover niches in our marketsand/or that have international potential."

Generally, acquisition of an exhibition falls into two main categories,according to Steve Sind, President and CEO of the Center for ExhibitionIndustry Research, Bethesda, MD: organic growth and inorganic growth.

"Companies that choose a strategy of organic growth generally takean existing successful show and reproduce it in some form in a new marketarea," he says. "For example, cloning a show in new regions oroverseas, spinning off a segment of an existing show and launching a newshow in existing or new markets all are examples of organic growth.

"Inorganic growth involves buying or selling an existing show,"Sind says. "These include acquiring competing shows, acquiring showsin new markets, selling a show and profiting from the proceeds and royalties,or buying a show that expands the reach of other products."

Breaking the mold
An example of successful organic growth is SOFTBANK COMDEX Inc., Needham,MA. Beginning with only one show in 1979, the group concentrated on informationtechnology and has expanded to its current international lineup, featuringmore than 35 shows in 15 countries with 30,000 booths and more than 1 millionattendees.

"We made the strategic decision to go global because today's electronicsare making a small world even smaller," says President and CEO JasonChudnofsky, speaking at a seminar on "Going Global" at ExhibitorShow 97 in Las Vegas, NV. The company finances its growth using somethinghe calls "transactional velocity." "Going global increasesour transactional velocity. Our domestic profits fuel international expansion.Our international profits can then be used to finance more domestic success.

"Of course, going global is not without significant risks,"he warns. "If your brand is damaged in Argentina, the negative impactcan quickly reach into Europe, Asia and North America. The world is thatsmall. But, conversely, a success anywhere promotes success everywhere."

Another danger of going global is what Chudnofsky calls the "CookieCutter Trap": "Some show producers feel that if a show is successfulin one location, you can guarantee its success by reproducing it exactlysomewhere else," he says. "But this cookie-cutter mentality onlyworks if you are selling cookies.

"For a show to succeed, especially internationally, the productand your marketing must be adapted to the country you are in. In many ways,this makes you very dependent upon your partner, co-venturer or licenseeand vice versa," Chudnofsky says. "But at SOFTBANK COMDEX, webelieve we all have to go global. We really don't have a choice. Going globalis risky, but not going global is more risky."

Creating new niches
Domestically, George Little Management Inc. (GLM), White Plains, NY,has become a leading organizer of trade shows for consumer goods by focusingon its strength -- producing merchandise gift shows. Beginning in 1924 withone show in Chicago's Palmer House Hotel, the company now operates 20 giftand other consumer product shows in the convention centers of cities acrossthe United States.

GLM uses a two-part business development strategy. "We have a BusinessDevelopment Department that looks for synergistic growth among our existingproperties and for new managed business opportunities," says DorothyBelshaw, Director of Business Development and Research. "We frequentlylook for new show ideas by monitoring demonstrated growth areas and trendsin existing GLM shows."

GLM recently developed an all-new show, EX*TRACTS, for fragrance, bathand personal care products. "The idea was born out of the explosivegrowth of this product category at the New York International Gift Fair®,"Belshaw says. "We began by conducting buyer and exhibitor research,surveying exhibitors to determined their level of interest; and buyers toinvestigate their needs and determine whether or not competitive marketsmet those needs. Once we discovered that a vacuum existed, we hired someonewith industry experience to create the show's image and positioning statement,develop a marketing and business plan, and manage the event going forward.EX*TRACTS will debut in New York this April and is currently sold out."

At MFI, many of the ideas for new shows come directly from the fieldstaff who work in the markets. "We had a hugely successful launch inFebruary, the Web Design and Development Conference in San Francisco,"says Ridley. "There were 100 exhibiting companies and 15,000 attending.The idea came out of our software development group. They understood softwaredevelopment so well that they could target a new show to fulfill a needthat wasn't being met. We tested the idea with a conference last year aspart of our Software Development Show, and it was successful enough to justifya new launch."

Expanding product reach
One of the hottest trends among companies selecting inorganic growthas their strategy is buying shows that expand the reach of their other products.Bill Communications Inc., based in New York City, followed this strategyin acquiring the Premium Incentive Show from MFI last year.

"This was a perfect acquisition for us because of our heavy presencealready in the incentive premium industry through our magazines, Incentiveand Potentials in Marketing," says Peter V. Edmunds, Director of the1997 show. "We also have three other magazines, Sales & MarketingManagement, Training and Successful Meetings, that serve this industry."

Jeff Gold of Goldmark Advisers agrees magazines are an outstanding promotionalvehicle to acquire or to acquire a trade show for. "It's a perfectstrategy," he says. "The advertisers are the exhibitors, and thereaders are the attendees. It's the kind of strategic alliance that Reedand many other exhibition management firms use well."

For companies that make a strategic decision not to acquire other exhibitions,there are several ways to increase growth. One of the primary methods, usedespecially by associations, is to hire a show management company to improvea show's performance. For the show management company, producing associationshows is a profitable alternative to acquiring its own shows. In gain sharing,both parties share in the revenue gains the show makes under new management.

"Downsizing has driven associations to use many independent contractors,"says Corcoran, who entered the show management field six years ago. "Weoffer associations better show management expertise than their own staffsand at less cost. The bottom line is to do a better job for less money.Our profit and the increased profit for the association comes from our doinga good job growing the show.

"When I first started my company, we didn't have the resources tobuy shows," he explains. "In formulating our strategic plan, werealized that one of the things we knew well was the association field.It requires a special skill to work with association executives and theirboards. After assembling a management team that also knew association work,we went out and began approaching associations about outsourcing their showsto us. Today, Corcoran Expositions handles more than a dozen shows, manyof them in the foodservice industry."

Improving the performance of association shows offers so much potentialthat several of the large show management companies have entered the field.REC's Dolson explains why she helped form their Association Expositions& Services (AE&S) division in the early 1990s: "I'd spent mostof my career at Reed managing association shows and found the skills requiredare very different from those traditionally found at firms dealing withnon-association shows. We also saw that, in general, outsourcing was becominga more popular business practice for associations, and we believed our associationshow management concept might find an audience, given this practice. Thekey to our plan was to offer our clients the best practices for trade showoperation that our staff has developed doing 50 shows a year instead ofjust one.

"Financial agreements for each association we deal with are different,"Dolson adds. "You have to customize your financial arrangements andmanagement practices to each association. AE&S now manages 14 shows,and we have 14 different agreements for how the shows are managed and howwe are paid."

Diversified Expositions, a Portland, ME-based independent show organizer,entered the fray last fall with the introduction of the Client Based ServicesDivision, headed by Karen J. Howe, CEM, Group Show Director and Chair ofthe International Association for Exposition Management. The division iscommitted to growing attendance and optimizing the revenue base for theassociation shows it manages. Patrick Gallagher, recently appointed ClientBased Services Manager, agrees that arrangements for association shows mustbe customized.

"We don't have a standard formula for association shows," Gallaghersays. "We offer our associations whatever they need of our services,from a turnkey operation to booth sales help or even advertising. We needtheir association expertise for each industry. They're the experts in theirfield. But in return, we can almost guarantee an association that we cangrow their show and operate it more professionally."

Adding paid services
An increasingly popular -- and easily attainable -- growth strategy isto increase show revenues by providing more services for both the attendeesand exhibitors. Ancillary products such as educational seminars and literaturekiosks, advertising in show dailies and directories, and sponsorship opportunitiesthrough banner programs, hosted receptions and international lounges canbe launched by shows of all sizes.

New technologies have created new sources for new revenue. These includevideo walls, audio speakers in reception areas, press kits on electronicdisks, advertising on Web sites and live-news kiosks at sites throughoutthe exhibition hall.

"Our goal is to elevate trade shows from a simplistic booth-and-attendeemodel into a grander forum of marketing opportunities," say CharlesAllen, Chairman and CEO of Birmingham, AL-based American Exhibition ServicesInc. (AES). Two of the products AES offers to accomplish this are CNN HeadlineNews kiosks and Audio Billboards.

"Increasingly, the associations we work with tell us they need non-booth,non-dues revenue sources. These two products and many others that we offerare extremely powerful revenue producers for show managers. We sell theadvertising and share our revenues with them. For example, on the CNNventionNews, we sell the advertising time to exhibitors in place of the regularCNN commercials.

"An attendee may not have time to visit every booth at a show, butindependent research studies show that approximtely 96 percent of them willview one of the CNN Headline News kiosks at one time or another during theshow," Allen says. "It keeps the show producer's product on theshelf during the show: Attendees stay on the show floor conducting commerce,rather than in lounges or hotel rooms catching up on breaking news. Andit's all no risk. If an exhibitor isn't happy with the impact of his messagefrom any of our services, he gets his money back."

Marty Porter is President of MP&NA Editorial Design, a Port Washington,NY, company that specializes in joint auxiliary ventures with trade showsto increase their revenue streams. "Our products are designed to helpshow managers give their exhibitors new opportunities to reach the buyerscoming to the show," he says. "We offer products such as advancepreview guides to shows, show dailies, press kits on electronic disks andeven a web site (http//www.tradeshowpr.com). They are all designed to helpexhibitors have a more successful show."

Porter, who works with shows including the Toy Fair, Consumer ElectronicsShow, The Super Show, The Motivation Show and the National Association ofBroadcasters, shares the profits from each of his ventures with show managers."Sometimes it takes a few years for a product to reach maturity, butif it serves an exhibitors need, then it usually turns into a significantrevenue stream for our customers."