What does the future hold for Meetings Management ... Does the Future hold… · Digital Decade •...

What does the future hold for Meetings Management for Meetings Management Companies? Lessons learned from the learned from the advertising industry

47th ICCA Congress & ExhibitionMeeting Management Sector MeetingSunday 2 November 200813:00 h – 14:00 h

Speaker: Tony Prehn – Lowe W/Wide Moderator: Jurriaen Sleijster – MCI

International Congress and Convention Association www.iccaworld.com

Introduction

•The issues facing meeting planners•Why look at advertising industry?Why look at advertising industry?•The advertising industry:

– HistoryHistory– Current situation– Outlook– Lessons learned

•Discussion•Q&A


Issues Facing Meeting PlannersPlanners• Services provided

(commoditization vs added value) ( )• Clients (behaviour, needs)• Pricing, procurement• Availability & quality of staff • Competition• Mergers & acquisitions • Management challenges


The Advertising Industry?Industry?• Similarity between these two

"service industries":–Communication–Agency model & some in-

house services–Similar clients–Similar pricing models–Management, HR –Consolidation, M&A


Why look at Advertising industry?industry?• Advertising traditionally more

mature than meetings industry

70

80

Top 10 Firms as % of Total Marketg y

40

50

60

0

10

20

30

0

HR ConsultingI-Banking

AdvertisingAccounting

IT ConsultingManagement ConsuExecutive SearchLaw


sultingSource: Aligning the Stars – Lorsch & Tierney – HBS 2001

Guest Speaker

• Tony Prehn is Chief Executive Officer of Lowe Thailand – the l t d ti i i th largest advertising agency in the country

• Originally from Sydney, Tony’s Originally from Sydney, Tony s experience includes Australina/NZ, China, Taiwan, Indonesia & VietnamIndonesia & Vietnam

• Leads an US$200 mil. diversified company with capability in p y p yAdvertising, PR, Digital, Consulting and Events


The advertising industry

• Less than 100 years old but has operated for 80 years under the

b i d lsame business model• The last 20 years has seen

significant change and re-significant change and restructuring across all areas of the businessCl ll l i t b t th • Clear parallels exist between the Advertising and the Events business

• We are living in your future !


Industry EvolutionIndustry Evolution

• 1890’s - First advertising agent 1890 s First advertising agent set-up shop in the US selling space in newspapers

• 1899 – JWT the first agency to set-up shop outside the USA1917 O i d l • 1917 – Organised our ourselves into the Advertising Agency AssociationAssociation

• 1930’s – commission system of remuneration widely adopted



• 1950s – First media revolution: TV1950s First media revolution: TV• 1970’s – Advertising ‘science’ born

as client began to seek gmore from their agencies

• 1980s – Decade of the Deal• 1990s – Digital Decade• 2000s – Dotcom crash, 9/11,

global downturn• 2008 - Financial earthquake



• Forget the first 80 years !Forget the first 80 years !• Let’s examine the events that we

grappled with as our Industry went through a period of profound change and re-engineeringId tif l i th t • Identify learning that we can re-apply to the Events business…and hopefully steer a smoother path hopefully steer a smoother path into the future


Decade of the DealDecade of the Deal

• Agencies had been built around gpeople who had some expertise and created their own businesses

David Ogilvy– David Ogilvy– Bill Bernbach– McCannMcCann– Frank Lowe

• Creative people, not business-minded. Privately held, not listed.

• PROLIFERATION


Decade of the DealDecade of the Deal

• Shift from creative-led to finance-ledled

• Global holding companies emerged : Interpublic

OmnicomWPP

Massive consolidation• Massive consolidation• Listing on the NYSE/others• Seeking efficiencies and margin • Seeking efficiencies and margin

improvement…creative ?• CONSOLIDATION


Impact of ConsolidationImpact of Consolidation

• Harmonisation of quality: +/-• Drive for financial efficiency• Margin improvement• Wall Street the true master of • Wall Street the true master of

companies• Acquisition of adjacent services:q j

Direct MarketingPR shopsEvents !

• DIVERSIFICATION


Digital DecadeDigital Decade

• The 2nd media revolution: wwwThe 2 media revolution: www• Agencies scrambled to go digital…

but we really didn’t understand ity• Another capability to add to PR,

Advertising, Events, etc• So…we created the idea of

Integrated Communications !l ’ b h ll• Client’s bought it…initially

• INTEGRATION


Dot Com Era…Dot Com Era…

• Then…it crashed…taking many Then…it crashed…taking many agencies with it

• Digital media unlike conventional media of selling space and time

• Old model of remuneration was i ff tiineffective

• Client’s demanding a more equitable system of chargingequitable system of charging

• Fee-based and pay for performance


p

Dot Com - ImpactDot Com Impact

• New remuneration model led to New remuneration model led to re-examination of cost

• Higher margin capabilities were expanded while less profitable units were divested or closedM j i ht i i ff t• Major right-sizing efforts

• Our Media business was spun-off as independent operationsas independent operations

• Bottom-line impact immediate !


BIG…No Longer BestBIG…No Longer Best

• We had gorged ourselves with We had gorged ourselves with acquisitions that weren’t delivering an acceptable return

• Moving into fields which were outside our expertise…and clients felt this Hencefelt this. Hence…

• Rise of the Specialists• Growth of Boutiques• Growth of Boutiques• Invasion of Consultants


More Choice for ClientsMore Choice for Clients

• Ability to leverage budgetsAbility to leverage budgets• Procurement policies applied to

Agencies• Greater negotiability…pressure on

margins• Relationships became project

based rather than total alignment New client alphabet• New client alphabet

• ‘A’ for…..


A…ACCOUNTABILITYA…ACCOUNTABILITY

• Agencies had to prove Agencies had to prove effectiveness of their campaign

• ROI had to be demonstrated…Return on Idea

• Pay for Performance component i t d d i t ti introduced into remuneration terms

• However no reliable • However, no reliable measurement tools existed


Industry Challenges

ProliferationDiversification

vsi li i

ConsolidationSpecialisation

Ad IndustryEvolutionAcquisition Creative Integrity

vsProfit

Mega HoldingA t bilit

Low Cost Companies Accountability Providers


The Current Situation

• Re-examination of our core competency

• Not…Advertising, PR, Digital, Events…per se

• That is the means just as • That is the means…just as meetings, conventions, exhibitions are for you

• But what do clients really wantfrom us?

• What can we provide better than • What can we provide better than any other industry?


Re-defining OurselvesRe defining Ourselves

• Ultimately...clients come to us to Ultimately...clients come to us to build powerful and successful brands

• At Lowe, we do that by providing

High Value Ideas

Not just advertising solutions/ads


Industry Outlook

• Increasingly competitive

• Fewer, bigger players

• Race to keep ahead of consumers/customers in new media landscape…My Space, You Tube, Second Life, Blogs


Industry OutlookIndustry Outlook

• Un-ending struggle to deliver Un ending struggle to deliver appropriate added-value

• Increasing emphasis on accountability


Industry OutlookIndustry Outlook

• Huge competition for talentHuge competition for talent– Fewer people entering the

industry– Higher expectations on

performance– Trend towards work-life balance

not compatible with our IndustryIndustry


Living in Your Future –Lessons LearnedLessons Learned

• Decide where your ambitions lie and build the appropriate level of and build the appropriate level of scale

• Don’t be seduced by client demands for one-stop service under one roofunder one-roof

• Have the capability to manage • Have the capability to manage complex activities but not necessarily ownership


Living in Your Future –L L dLessons Learned

• Re-define your core Re define your core competency…by looking into your future not the past

• Invest in retaining your best l d i t i i th t people and in training the next

generation of business leaders



• Create ability to measure true yeffectiveness…not just quantitative metrics

Attitude shift– Attitude shift– Image perception– Reputation enhancementReputation enhancement– Brand credibility

• Review your remuneration model to reflect changing client expectations and deliverables


expectations and deliverables


• Move capabilities upstream into p pideas/concepts, avoid downstream execution (reduced margin/commoditization)(reduced margin/commoditization)

• Understand the client’s underlying Understand the client s underlying business problems and brand strategy…and be seen to align your activities to address that not your activities to address that, not just delivering the immediate need for an Event



• Get a seat at the Board Room Get a seat at the Board Room table…elevate your role and image within the client’s organisation

d d l b th h t and deal above those who execute the task

• Provide a premium, high quality product…but be prepared to product…but be prepared to negotiate



• And finally….y


Sh h t lShare whatever you learn….with us !


Lessons learned from the Advertising industryAdvertising industry

Discussion


Lessons learned from the Advertising industryAdvertising industry

Audience Q&A


International Congress & Convention Association

Thank you!Thank you!47th ICCA Congress & Exhibition

Tony PrehnJurriaen Sleijsterj


What does the future hold for Meetings Management ... Does the Future hold… · Digital Decade •...

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