Marketing abroad: Further afield

The economic downturn is forcing brands to be more cautious than ever when it comes to events, but those branching out in emerging markets are reaping the rewards, writes Nicola Clark.

There is no doubt that the events industry is operating in a challenging market. The traditional round of Christmas corporate festivities has all but dried up in the banking sector. While those brands who have ploughed ahead with celebrations have faced the vitriol of the tabloid newspapers, complete with published estimates of their bills, it is not all bad news for the sector. For those brands looking further afield for their launches and events, return on investment is high.

When compared with London prices, holding an event in an emerging market is often substantially cheaper. One agency estimates that equivalent events are, on average, 20% cheaper in Russia and 10%-15% cheaper in Dubai. Tourist authorities are also on hand to offer additional incentives, although the cost of travel and the logistic workload are often drawbacks. On the other hand, some in the industry argue that the days of holding cut-price events are over, as emerging markets become more sophisticated.

Global perspectives

There is little doubt that, as the economy nosedives, many brands will look further afield for growth, making 'emerging markets' a key phrase for marketers once again.

The corporate hospitality market has focused on these markets as a growth area for some time. Established events such as Formula One are seeking to move into Asia and the Middle East. Following the cancellation of the French Formula One Grand Prix in 2009, territories such as Singapore, where companies are willing to pay top rates for advertising and corporate entertainment, are increasingly important. Investment in new race tracks in markets such as China may also put existing European venues such as the UK's Silverstone in the shade.

The ongoing US economic crisis has forced many companies to look toward Asia for growth. The region accounted for 80% of global growth in key financial institutions in the first quarter of 2008, and Euromonitor International predicts that business tourism to Asian destinations will have grown by 9% between 2007 and 2012. The region is expected to host 80m business visitors over the same five-year period - a boom in interest that will boost its venues.

The Euromonitor report also predicts major expansion in the incentive travel market in the region, and international hotel chains have devised growth strategies accordingly. This year, Four Seasons opened its first property in Mumbai, India, with 202 rooms and suites and more than 500m2 of function space. International conventions such as the 2006 IMF and World Bank conference in Singapore and the 2008 Beijing Olympics have also prompted additional investment in facilities and infrastructure, so that brands taking a more global approach to launches and events are considering these markets more seriously.

However, Kevin Jackson, sales and marketing director of global experiential agency Jack Morton Worldwide, says it would be wrong to assume that brands are simply transferring events from established European markets to emerging ones. 'There is no "migration" of brands from London to emerging markets, only a greater focus on these markets in their own right, for growth,' he argues. Meanwhile, a plethora of launches for big-budget venues such as Atlantis in Dubai puts these markets in the limelight.

However, many in the industry are railing against this trend. 'With the current economic climate, brands that choose to take their events and money out of the country are guilty of not helping our economy,' says Jonathan Byrne, commercial director at The Queen Elizabeth II Conference Centre. 'In times such as these, it is vitally important that brands and conference organisers support UK Ltd. I understand that launching a product in a hot climate can seem more appealing, but failing to keep your organisation's money within the British economy is letting down the consumers you are trying to attract.'

While UK brands may well be looking toward emerging markets for growth, there is also more investment coming into the UK from emerging markets. One such example is the Abu Dhabi National Exhibition Centre's purchase of ExCeL London. The deal attracted huge subsequent investment in the venue, which is to increase its size by 50% ahead of the London 2012 Olympics.

Tom Treverton, director of the Association of Events Venues, believes that the UK events industry leads the world. 'The industry is more than holding its own. Not only is it benefiting from more investment from other markets, but these markets are also looking to the UK for talent and expertise.'

Next year will undoubtedly be challenging for the industry, but the outlook is not as bleak as the barrage of negative headlines would suggest. While the Olympics and its cost may have become the scourge of the media in recent weeks, the events industry is poised for growth in both the number of venues and amount of international business it attracts. 'London 2012 will place an international focus on the UK's event industry, as well as creating venues such as the Olympic Village,' says Treverton.

Meanwhile, Jackson asserts that, although greater sensitivity is to be expected in the current economic climate, events and experiential activity remain vital for brands seeking to build lasting and meaningful relationships with consumers. 'The brands that build sustainable communities will be the ones that thrive. Events and experiential activity are key to this,' he argues. So, whether overseas or over here, the enduring message is that 'the show must go on'.

ATTENDANCE COMPARISON
UK Trade Events

No of Average Median Combined % change
events attendance attendance total in total
audited attendance attendance

2007 actual attendance 143 7597 4500 1,086,440 -0.2%
2006 actual attendance 143 7615 4573 1,088,892 -
UK Public Events

No of Average Median Combined % change
events attendance attendance total in total
audited attendance attendance

2007 actual attendance 126 25,554 14,962 3,219,796 -1.1%
2006 actual attendance 126 25,834 13,920 3,255,068 -

Source: EIA Facts 2008

VITAL PREPARATIONS

Gemma Newland, managing director of brand entertainment agency Stream, on how to hold events in emerging markets

- Make sure you have a translator on your team.

- Be informed about the cultural and socio-economic climate of the market you are operating in, and use your knowledge in your plans. In Russia, for example, you will need a 'fixer'.

- Do not put all the VIPs on the same flight, in case it is cancelled or any goods go missing.

- Always work with a local production company - one that knows the local customs, nuances or issues that are likely to affect your event. Make sure that your agency has experience of working in these markets.

- Know the local regulations. In Russia, goods must be received on the ground by a Russian partner, while in the Middle East there are significant restrictions on alcohol.

- If you are booking talent, make sure the artist can get a visa for the country in which you are holding the event.

- Don't forget to prepare and pack your Plan B, Plan C and a sense of humour.

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