13 Jun Why the events industry is ripe for mergers and acquisitions
Acquisitions in the events industry are exploding, mergers are being whispered about at the edges of conference halls. The events industry, it seems, is ripe for acquisitions and mergers.
Not so long ago it became obvious that every brand should become a media company. Brands are now churning out media at a ridiculous rate, updating their socials, their YouTube, their blogs, podcasts, etc, etc on a daily, even hourly basis. Brands ARE media companies today, but there has been a recent shift in consumers habits and brands are moving with them.
The move offline
Consumers are looking for meaningful experiences in the real world and brands are more and more trying to find and engage with their customers offline, creating real life experiences and interactions with them. Part of this move back offline is to do with the corruptibility of the media and advertising industries online. Fake traffic, fake clicks and untrackable sales in a digital world that was supposed to give advertisers accountability for everything. Added to this is online users becoming jaded by the lack of depth of the digital experience, it’s great having a digital life, but people are realising that too much time staring at a lightbulb in the palm of your hand, sat on your own is not actually that healthy.
Music is another great example of how fans are looking for deeper experience offline. Because there’s no tangible experience to go with listening to streaming music, no visuals, we’ve seen the resurgence of vinyl which shouldn’t make any sense in the digital landscape, but people want to touch and feel their music, they want to engage with it in the physical world, read the sleeve notes. To the point that we are also seeing a tidal wave of festivals launching all over the world. People are prepared to travel to experience music, in fact they want the experience as much as anything the music and they want to experience it with others. After all, humans are social creatures and they like to socialise.
The need to experience
And this where events come in, for brands to be experienced, there needs to be the draw of the event, something that will happen, that’s exciting, that you have to be at, because afterwards it will be over and you will have missed it. Either brands can put some kind of event on that draws a crowd to their brand or content producers, media companies and events companies, they can do what they specialise in and create fantastic content at events that their audience wants to experience and brands can support that with funding so they can interact with audiences once they are there.
The events industry has been doing experiential for years, it’s an inside joke in the events business that suddenly the advertising industry is talking about experiential like it’s only just been discovered. To be fair to brands, they have long known that adding their name to events gave them some creds, but the events industry is bringing their experience to bear on experiencing brands in an immersive way and the advertising industry has noticed in a big way, budgets have increased and experiential has become a focus.
“Every brand should be an events company”
The events industry is booming because of this, in fact in some ways experiential is at risk of becoming commoditised, as not only is the events industry already in the niche, but hundreds of awoke millenials are now forming amazing experiential events companies without the baggage of traditional events companies and rushing towards the experiential bandwagon, driving fees down because that’s the only thing left to compete on.
Media companies create experiential events
Now every brand should be an events company. Every brand, because if they are not engaging with their audience in the real world in some way then they will soon be lost under a flurry of whatever the next transient digital fad is. The best media companies out there have already made the transition to becoming events companies, Vice, who have relied on their advertising dollars from their TV, print and digital are now immersed in the experiential world. They recently bought out New York based experiential agency Villain and clearly they are looking to maximise their advertising revenue from their media relationships in the real world.
Complex, another US media brand at the forefront of the dash towards events brought the first edition of Complexcon in 2017. Hip hop and street culture understands only too well the relationship between brands and their customers and how the two feed each other when experienced in an immersive environment offline. Complexcon is a huge conference style event that, as High Snobiety says “transforms the Long Beach Convention Center into a Valhalla for cool shit”. The event was hosted by Pharrell Williams and Takashi Murakami and had sports and music influencers Kobe Bryant and Kendrick Lamar speaking on panels. It was a huge event created by people that really understand the draw of great content, all to suck kids into brand experiences en masse and generate hundreds of thousands of dollars in profit for the organisers and sales for the brands on display.
Events are the new frontier
Brands get events, media get events, events people get events. It’s the new frontier and there is so much experiential ad dollars pouring into the industry it’s also becoming a hotspot for innovation. Digital event companies like Socialbear and CreateLondon are building the next generation of social tech to complement the digital and events realms and the space is becoming cooler and cooler.
Boring old businesses are also getting in on the act, an area of the events industry is called B2E, that’s right, not B2B or B2C, business to employee. They are creating events to immerse their employees in their world so that their employees, their customers, other business, everyone they can connect with can buy into the brand experience. The events industry really is in just the right place to reap the rewards.
Corporate events business, was a party business
Many events businesses started out as a one man band, they organised a few events and happen to do it for the right person at the right time and boom their business exploded. Over time their old client moved on to bigger and better job taking the events company with them and over a period of 5 to 10 years, what started out as a passion for parties has ended up generating millions of revenue a year. These accidental entrepreneurs then face the founder’s dilemma of turning a comfortable lifestyle business into a corporately run behemoth that isn’t as much fun as it used to be. Many founders are creatives who don’t really enjoy running the business side of things, even at the upper levels of success they feel the burden of having to worry about paying the staff and keeping the lights on all too well.
Consolidation in the events industry
There are hundreds and hundreds of these well run fairly large SMEs, with 10 – 30 staff turning over single digit millions. The more ambitious amongst them have already made some acquisitions, doubling their size and with it their revenue, but there is a huge window of opportunity for consolidation.
Part of that consolidation, multiple acquisitions of events companies, will happen within the events business itself, the mega events agencies are already snapping up smaller companies with nice client lists, mid size operations are also poised to hoover up competitors. But the big win will come when the ad agencies get in on the act, rather than go and spend their experiential dollars with boutique agencies, it makes a lot of sense to bring this talent inhouse. Not only ad agencies, media companies will too and they will have to pay top dollar for the privilege.
Martin Sorrell will not build WPP2 (S4 Capital) out of one hundred newly acquired ad agencies, he will build a chimera of techy data, media owners, events companies and of course some ad execs to creatively pull it all together. We won’t see a horizon full of traditional ad agency brands, it will be a multiverse of cross pollinated talent acquired.
Events industry acquisitions
This all bodes well for the events industry, particularly those at the experiential coalface, it’s a good time for owner managers to take stock of where their business sits in the grand scheme of things and how ready they are when buyers with big pockets come knocking to acquire them.
If you are thinking of selling your events business, maybe we can help you, get in touch.