November/December 2004
Co-location goes mainstream

The co-location trend is accelerating, in part, due to diminishing participation in shows by both attendees and exhibitors. For FMI and many other show organizers, co-location brings synergy to events with overlapping markets, increasing buyers for exhibitors and enhancing education and product awareness for attendees.

By Cathy Chatfield-Taylor



When four-year-old All Things Organic joined the Food Marketing Institute’s 67th Supermarket Convention & Educational Exposition, May 2–4, 2004, it became the fifth partner in a landmark co-location agreement that brought 1,000 exhibitors and more than 30,000 attendees to Chicago’s McCormick Place.

With organic product retail sales projected to reach $20 billion by 2005, OTA’s show brought a booming product segment to the FMI Show, which represents the rapidly changing food industry. Together with the U.S. Food Export Showcase, Fancy Food Show, and United Produce Expo and Conference, the events gave supermarket retailers and wholesalers from 133 countries unprecedented access to food products, services and equipment.

“It was a chance to welcome food categories that hadn’t previously been represented. We got there a lot faster and a lot less expensively with a critical mass of participation than if we’d developed it on our own,” says Brian Tully, Senior Vice President of the Food Marketing Institute (FMI), Washington, DC.

“We nearly doubled our event in one year with co-location,” says Brian Perkins, Executive Vice President and Chief Operating Officer of Portland, ME-based Diversified Business Communications (DBC), which manages All Things Organic for the Organic Trade Association (OTA), Greenfield, MA.

A market study by Baltimore-based Jacobs Jenner & Kent for the 2004 Exhibition and Convention Executives Forum (ECEF) found that 34 percent of respondents planned to co-locate in 2004, compared with 27 percent in 2003 and 14 percent in 2002. The trend is accelerating, in part, due to diminishing participation in shows by both attendees and exhibitors, according to ECEF Co-producer Michael Hough, author of The Profitable Trade Show and the white paper, “Co-location for Fun and Profit” (www.profitabletradeshow.com/wp/w16.shtml).

“It starts with who’s bringing value to the relationship,” Hough says. “The best co-location is 100 percent crossover in attendance and zero crossover in exhibits.”

When non-competing shows co-locate, attendees from each event find added value in the education and exhibits at the other events, and exhibitors get traffic from audience segments they might not otherwise see. Co-location can also garner more press coverage and gain enough clout with suppliers to cut production costs.

A co-location differs from a merger because partners typically retain separate ownership and finances. Co-located events can have separate identities in shared or adjacent space, they can merge under an umbrella event with a brand new identity, or they can combine with one or more partners staging a pavilion or show-within-a-show. The format that fits depends on the reason for the co-location.

Why co-locate?
For FMI, inviting associations with established communities to join its show exposed members to a broader spectrum of products in less time and at less cost than it would take to visit each event separately. “You have to look at the time and resources of your customer base as a driver,” says Tully.

Co-location offers broad, horizontal shows a low-cost way to cultivate narrow vertical market segments. The Construction Specifications Institute (CSI), Alexandria, VA, introduced the concept of Construct America in 2003 to grow attendance in specific markets. Although the CSI Show was sold out at 1,100 booths, an attendance of 9,000 didn’t generate enough foot traffic. CSI analyzed the 16 categories it covered, identified five with growth potential, then targeted shows that already reached those segments.

Starting with the 200-booth TFM Show, owned by Group C Communications, Tinton Falls, NJ, publisher of Today’s Facility Manager (TFM) magazine, CSI offered the opportunity to co-locate with its then 47-year-old event for three years. From 2005-07, CSI will add the Mason Contractors Association of America.

“Our major selling point was that they would be in control of their shows and manage the shows themselves,” says Lisa Derby, CMP, CSI Senior Director.

For vertical events, co-location offers a way to give cross-category buyers access to complementary products and services. When New York-based Advanstar Communications acquired AIIM, an enterprise content management event, from AIIM International, Silver Springs, MD, the company already owned On Demand, a digital printing and publishing event. Together, the two events would address the electronic document life cycle.

“The puzzle pieces fit together,” says Brian Randall, Advanstar General Manager. “It was about what the sum was going to do for the attendee, if they could travel to one mega event that shows the whole life cycle of the technology for the process.”

Co-location is also a low-risk way to launch a new event. E.J. Krause & Associates (EJK), Bethesda, MD, entered a joint venture with CMP Information, New York-based publisher of Sports TV Production magazine, to launch Sports TV Expo, which will co-locate with EJK’s 27th Sport Summit Conference and Exhibition, Jan. 25–27, 2005, at New York’s Madison Square Garden.

“We felt that doing it as a co-partnership with a CMP publication would give it more credibility, and it would be able to launch stronger than if we did it on our own,” says Jim Forlenza, former EJK Senior Vice President. “Typically, when you try to reevaluate your show, you look for a niche area of growth. That was an area we had targeted.”

With enough synergy between events, co-location can also be an effective strategy to pull a risky launch back from the brink. When the struggling one-year-old Great American Dessert Expo, produced by Dessert Expo LLC, New York, approached Coffee Fest Show Manager David Heilbrunn about co-locating with his rapidly growing show, he was skeptical.

“We built a successful show from scratch and had done 30-plus shows,” says Heilbrunn, Vice President of Bellevue, WA-based Life Style Events. “There seemed to be great synergy, but we didn’t want to partner with someone who was not as committed.”

The debut event, held June 12–14 at the Sands Convention Center in Las Vegas, attracted 2,774 attendees, nearly 50 percent more than Coffee Fest alone in 2003. Heilbrunn attributes more than 600 attendees to Dessert Expo.

“If you can share expenses, increase the bottom line and provide seriously qualified attendees to your exhibitors that they weren’t seeing otherwise, it’s a wonderful opportunity,” says Heilbrunn. “You’re going to make more money and strengthen the overall property.”

Choosing a partner
Although the coffee and dessert combo worked, the two show management teams had vastly different styles. After learning from their mistakes, including confusion and misinformation at registration, the teams came together for a two-day de-briefing on how to make their cross-country partnership succeed in 2005.

“When you go into business with a partner, you can’t assume that they know the business,” says Heilbrunn. “Hopefully we’ll emerge as one cohesive team.”

Potential partners not only need show synergy, they need to have a good fit between the organizations and among the team members who will work together. Before entering a partnership, the organizations should state their expectations and compare modes of operations. An association with a bottom-up organization focused on service to members may be mismatched with a for-profit company that has top-down leadership focused on the bottom line.

“Business style is very important,” says Francis Friedman, President of Time and Place Strategies, New York, and a frequent consultant on co-location agreements. “A significant mismatch results in small annoyances that can grow into large issues.”

Beware of hidden agendas or a lack of full disclosure, which can undermine a relationship. The suitor may be seeking partners for the wrong reasons, such as trying to save a sinking show, or compensating for weak or inexperienced management by riding the coattails of a stronger, more seasoned team. Friedman cautions: “What vibes do you get in the initial conversation — a sense of struggle, or a sense of welcoming and openness?”

By beginning the dialog with candor about each organization’s strengths and weaknesses, management teams can determine whether they complement one another. Will there be turf battles, or will team members gladly delegate the functions that are not their strong suit?

“The devil is in the details,” says DBC’s Perkins. “I’ll take a mediocre idea and a great partner over a great idea and a lousy partner any time.”

The worst mistake is trying to put together two mediocre ideas or two lousy partners in the hopes that, together, they’ll make one good partnership. “If you have a declining brand, partnering with another brand is a critical mistake,” says Vinnie Polito, Senior Vice President, Reed Exhibitions, Norwalk, CT. “That’s like two drunk guys trying to hold each other up.”

Co-location partners should be able to enhance each other’s events in ways that would not otherwise be possible. “You never want to do a co-location because of synergy between exhibitors. You want the reason to be for synergy around attendee groups,” Polito says. “A co-location that is non-synergistic is just like having another show in the hall at the same time.”

Similarly, co-locating for the sole reason of sharing costs doesn’t make sense. “It has to enhance one of the three components of a trade show — content, community or commerce,” he says.

Negotiating the deal
What value each partner brings to the relationship will be the first subject of negotiation. If, for example, an association has an established brand name, and the for-profit partner has cultivated a new market segment, then the two organizations need to negotiate the value of their respective contributions to the co-located event. In this case, size may not matter.

“If the smaller show has the hot stuff that attendees clamor for, they may share 50:50 — that’s the essence of the deal,” says Friedmann.

From there, every aspect of the deal should be discussed and agreed upon, from financial management to which suppliers to use. Whether these details should be put in writing at the time of the agreement is a matter of choice. FMI’s co-location agreement describes the big picture, such as how much space each event gets on the floor.

“The working details aren’t part of the agreement. They’re hashed out after the basic agreement is worked out,” Tully says. “If you included all of those details in the agreement, it would be a paralyzing piece of work.” This gives the team flexibility to collaborate and come to consensus on how to produce one show hosted by five organizations.

Co-location agreements typically last for two years, with the option to part ways or renew the agreement after the first year. Both parties commit to a second show but have enough lead time to plan separate events for the following year, if they decide to split.

A non-compete clause should stake out the time that must elapse before the former partners can organize competing events — typically two years. The agreement should also address such prickly issues as who will own the assets, including intellectual property, copyrights and patents, and exhibitor and attendee lists.

“These are the agonizing issues that arise in a breakup,” Friedman says. If you don’t discuss them up front, “you’ll be litigating them.”

Sharing risks and rewards
Shows of equal size may divvy up revenues, expenses and responsibilities 50:50, but unequal partners need to hash out who does what, how and why.
“You’re going to have some hard discussions,” warns Hough.

Let’s say the partners agree that sales contribute 40 percent of the event’s value; attendance, 30 percent; operations, 20 percent; and the conference, 10 percent. If one partner does all the attendance promotion and half the exhibit sales, then 50 percent of direct expenses would be allocated to that partner.

Staking out sales territories and who owns which exhibitors can be contentious, even when one company owns both events. At AIIM On Demand, six large accounts ordinarily took space at both AIIM and On Demand but chose to take one booth each at the combined event. Advanstar decided to pay commissions to the salespeople on both sides of the aisle for the first two years.

“You need to make sure they’re happy and working as a team in sales,” Randall says.

Pricing of exhibit space can tip the scales in favor of one event over another. If space rates are unequal, aim for parity in pricing by the third year, so exhibitors take space based on the best location, not the best price. Not surprisingly, space along the crossover line can become a hot zone that commands high-priced sponsorships.

At the FMI Show, where each event has a distinct brand and its own space on the floor, partners manage their own sales and promotions, collaborate on operations, and share transportation and security, so there’s no duplication of services. The biggest challenge has been reevaluating and reinventing the way they do things.

“There’s a lot of, ‘This is the way we do it. This is why we do it this way,’” Tully says. “Sometimes these things are incompatible. Then we ask, ‘Why was it important to the community to do it that way?’ It involves a lot of fresh thinking.”

Don’t expect the events to make more money together than they did apart in the first year. Co-location takes aggressive marketing, and it may take up to three years to get the production kinks worked out and the audience fully on board. Friedman estimates as few as 20–25 percent of co-locations are successful.

“They don’t fail, but they run out of utility,” he says. “There’s nothing wrong with knowing it’s a two- to three-year deal. But go into it with your eyes wide open, understand your business and your partner’s business. Put all the issues on the table — the good, the bad and the ugly.”