Event horizons

The live events industry has come a long way from its ‘industrial theatre’ roots, with small companies being steadily snapped up by the big networks. David Benady looks at the way forward for both independents and majors in a

Concorde’s relaunch party in November and the 1998 ceremonial handover of British power in Hong Kong to the Chinese are two events which owe a lot to comedian and one-time Golden Shot presenter Bob Monkhouse. Back in the mid-Sixties Monkhouse, along with theatrical impresario Malcolm Mitchell, helped to set up live events company MMA, thus launching a new British service industry which today claims to be a world leader.

Back then, it was known as “industrial theatre” and its main business was organising sales conferences for grocery brands. Now, the slide shows and creaky stage sets have made way for lavish multimedia exhibitions, and the live events industry is responsible for everything from motor shows, office redesigns, brand launches – and relaunches such as Concorde – to the occasional colonial handover. The industry has had its ups and downs – it was in large part responsible for the Millennium Dome, but any fallout from that can safely be blamed on the Prime Minister.

No deal without smoke

No merger, launch or major ad campaign is complete without smoke and mirrors provided by a live events company, and the big media networks have grasped the importance of having such a company in their expanding portfolios of marketing services providers. But some industry insiders wonder whether the integrated approach is a boon or a hindrance to clients, who may find themselves shoehorned into using a network’s live events company whether it is suitable or not.

After a string of takeovers (and the departure of Monkhouse), MMA eventually became HP:ICM and achieved another first. In 1986, it became the first live events specialist to be bought by an agency network. It fell to Saatchi & Saatchi, which was then buying up everything it could lay its hands on, and eventually was inherited by Cordiant. Cordiant recently acquired another live events business – PCI Live Design – which will merge with HP:IC

M in February. A name for the merged companies has yet to be announced.

HP:ICM chairman Nigel Lloyd-Jones explains why there is such a rush by agency networks to buy live events companies: “The skills and personnel in our industry are difficult to find, and many of the best people run independent companies. To get the people, you have to buy the company.”

Lloyd-Jones says Cordiant will seek to buy companies in other markets if the price is right, and adds: “The interest over the next two years is seeing whether all this integration works.” While the ad industry is suffering a serious downturn, he says live events have weathered the storm. He believes acquisition activity will pick up again when the worst of the downturn is over, and some independents stand to make their fortunes in the next wave of takeovers.

No event is an island

By 1978, interest in live events had reached a sufficient level for designer Gary Withers to set up a company which saw events as part of the future of marketing and design. And so Imagination was born. Today it is the biggest supplier of live events in the UK, claiming fee income of £38m for 2000, on turnover of £120m, up from the 1999 figures of £30m fee income on a turnover of £101m.

But as other industry players link up with the big networks, Imagination has remained independent, though a 26 per cent stake is controlled by venture capitalist 3i. In reality, says Imagination marketing and strategy director Ralph Ardill, the company works like a network, linking together many disciplines – from architecture and brand design to film production and live events.

Ardill says: “There tends to be a conflict between the ‘small and nimble’ or ‘global supertanker’ models. We structure ourselves according to what we believe in. Imagination is almost like a network of little groups, but rather than having different cultures with different focuses, we have one dominant culture. When we want to grow globally, we merely replicate the model.” He cites the Guinness Storehouse – a fermentation building converted into a visitor centre and venue – in Dublin as an example of how Imagination has combined live events, architecture, design, advertising and other skills to create an overall brand experience.

But Ardill declines to comment on whether Imagination – or any of its shareholders – is in discussions to sell out, or whether a deal with a media group is on the cards. He adds: “What is on the cards is the continued pursuit of what we believe in. We never rule anything out or in. The model we have works for what we believe in, it attracts the people we need as we develop the business and grow organically.”

The seating plan

While Imagination keeps all its personnel under one roof and mixes and matches them according to each separate brief, other networks that have acquired live events companies have the task of making them fit into the group.

Such a task is not easy. According to Lois Jacobs, chairman of the UK’s second largest player, Jack Morton Worldwide: “It is difficult at the beginning, it involves building a relationship with the other agencies in the group. People need to check the agencies they partner.” Jack Morton was an independent US operator until it was taken over by Interpublic Group in 1998. Interpublic turned it into an international operation with offices around the world, and partnered it with its ad agency, McCann-Erickson.

Jack Morton was responsible for creating the spectacular Hong Kong handover celebration, and has also designed Nokia’s office reception, which demonstrates how far live events companies have penetrated brand culture. Jacobs says that once the initial checking of partner agencies has taken place and people get to know and trust each other, the integrated approach is an advantage for many clients, and it is clients, she claims, who are the ones really driving integration. “When you work with one group, it is easier because you have time to build up relationships. We know how McCann works, and it knows how we work,” she says.

But Derrick Tuke-Hastings, chairman of Park Avenue – which has worked for BA for a number of years and staged the relaunch of Concorde – warns that agencies can bully or cajole clients into keeping their work within the network. He says: “They seem to think they have a God-given right to have all of your work.”

But he admits that, as part of marketing services group Incepta, Park Avenue has been introduced to clients that it might not otherwise have met. He says the biggest advantage of being part of a network is that it provides support to entrepreneurs who would otherwise feel isolated. He adds that there are many small independents who survive on just one or two clients, though even they thrive when the going is good.

Marketing directors find it reassuring to hire live events companies from big networks, as this is one area of marketing where mistakes cannot be hidden. “If it goes wrong, it’s horribly public,” says Tuke-Hastings, pointing to the string of potential disasters which dog live events – particularly if the event is staged in different markets at once. If there is a big media name behind the company, there may be some refuge for the unfortunate marketer when questioned by a managing director about an expensive failure.

Throw your own party

Omnicom has bypassed the traditional takeover route for acquiring a live events company, and has invested directly in a start-up, called Live Communications. It was set up 18 months ago by Michael Lockett, who had sold his own live events company, WCT, to Carabiner. He was joined by former Maritz executive Ian Maddison, now Live’s chief executive, and Patrick Donovan, former commercial director of the Trocadero and sponsorship manager at the Millennium Dome. Omnicom is the company’s major investor, and the agency is part of the giant’s Diversified Agency Services group. “From our point of view, being part of a group has worked very well,” says Donovan.

He does not see clients being pressured into using a network agency, either by sales pressure or through cut-price deals: “There is no way being part of the same group guarantees preferential pricing for anybody.”

He says Live concentrates on helping clients get their strategy right: “There are a lot of production companies that can put on a good party and get the right technology, but we position ourselves at the top end. Putting on conferences or seminars is the easy bit. Getting the message right is the real job.”

The next couple of years will see the live events industry play its own version of The Golden Shot, as the bosses of well-regarded independents wait for that phone call from an agency network, and attempt to secure their positions in an industry that is becoming increasingly global and corporate.

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