Conference & Incentive Travel

State of the Industry Report !"#$

With thanks to our headline sponsor

If spring heralds green shoots, then summer 2014 is looking positively rosy across the UK as C&IT’s annual State of the Industry Report reveals an overwhelming sense of optimism from agencies and brands.

A whopping 92% of agencies predict growth across the next 12 months, with 43% of corporates increasing event budgets in 2014.

While it remains too early to talk of a recovery to pre-recession levels, it is clear the industry has navigated the downturn. New agencies are forming, existing marcomms specialists are rethinking their approach to live events and the recruitment market is confident again.

Our first fully downloadable State of the Industry Report – the most comprehensive to date – features in-depth analysis on the top challenges for corporates and agencies, recruitment, training and education, technology and sustainability, as well as predictions for the year ahead.

So read all about it, tweet about it – the upturn is coming and with 70% of agencies reporting a rise in pitch activity – everything’s to play for.

Yasmin Arrigo Editor-in-Chief

While it remains too early to talk of a recovery to pre-recession levels, it is clear the industry has navigated the downturn

C&IT STATE OF THE INDUSTRY REPORT !"#$ !

Introduction

Published by Haymarket Business Media. No part of this publication may be reproduced without the written permission of the publishers. ©2014, Haymarket Media Group Ltd

C&IT STATE OF THE INDUSTRY REPORT !"#$ "

In numbersFor C&IT’s annual State of the Industry Report, we surveyed and carried out in-depth interviews with more than !"" UK-based corporates and agencies about their event activity in !"#$, general trends and challenges and the outlook for !"#% and beyond. Here are some of the key stats:

!"%of agencies surveyed

are forecasting growth this year – in turnover,

profits or both

#$%of the 50 corporate planners

surveyed by C&IT said they saw budgets increase in 2013, while 51%

said budgets remained static

%#%of corporates surveyed are predicting a

budget increase this year, with 14% saying budgets have not yet been decided, while 29% expect them to stay the same in 2014

$&%of agencies surveyed said they saw an increase in pitch activity in 2013

compared with 2012

'%% of agencies expect to increase headcount in 2014, while 68%

added more staff in 2013

##%of agencies saw events cancelled by clients in 2013, mainly due to

budget, but so far in 2014 only 12% have seen events cancelled

$&% of agencies surveyed said they have taken

on students from event management degrees in the past 12 months, good news for the next batch of students to graduate

()%of corporates surveyed do not actively apply a CSR policy to

their B2B events

(%% of corporate event planners said they

have used, or are considering creating, a mobile app for their events in 2014

"'% of corporates surveyed said that budgets are

their biggest challenge

)*% of agencies said

that recruitment is their biggest challenge

%%% of agencies surveyed are

members of Evcom association

)!%of corporates expect 100% of their

events to include social media elements, 19% expect at least 50% to include

social media, while only 11% said none would have a social media element

"$% of agencies saw an increase in incentives, while 18% saw an increase in conferences and

meetings in 2013

""% of corporates surveyed expect to

increase the size of their events team in 2014, compared with 41% who said

they increased headcount in 2013

C&IT STATE OF THE INDUSTRY REPORT !"#$ "

C&IT STATE OF THE INDUSTRY REPORT !"#$ #

Great expectationsC&IT’s survey of corporates and agencies reveals the UK events sector is shaping up well

Steady, stable and even strong is the general verdict on the current state of the UK events industry. 2012 was always going to be a tough year to follow after the buzz of the Olympics, which left many fearing that event

budgets and business might suffer in 2013. And the Olympics did have a knock-on effect on some businesses. Motivcom was one such example, with several pieces of one-off Olympics work that weren’t repeated last year. Divisional managing director Nigel Cooper says that because the company did not win sufficient new business to offset that, it impacted on the bottom line – the group recently announced a 50% drop in 2013 operating profits for its meetings and events division to £900,000 – although he adds that growth and new business in 2014 are greatly improved.

Healthy outlookThe good news is that for many, 2013 turned out to be much healthier than expected – a record year for some – and 2014 is shaping up to be even better. For our annual State of the Industry Report, C&IT surveyed and interviewed more than 200 UK-based corporates and agencies about their event activity in 2013, general trends and challenges and the outlook for 2014 and beyond.

Peter Jackson, director at Concerto Live, says: “From a financial point of view it’s the best year we’ve ever had. From a client acquisition and a project delivery point of view, it was also a really strong year.” Jack Morton Worldwide also had a much better year than expected, according to EMEA president Julian Pullen. “Our success in 2012 was partly fuelled by the work we did with sponsors during the Olympics, so we were worried that the bubble could burst and it would be a hard act to follow,” he explains. “However, new business at the end of 2012/13, as well as positive growth with existing clients, meant 2013 was a terrific year.” %

Interest and inflation rates are stable and people are spending, which is reflected in this sectorIan Cummings, managing director UK & Ireland, CWT Meetings & Events

C&IT STATE OF THE INDUSTRY REPORT !"#$ $

In line with the wider economic recovery, the UK events industry is on the up, and while a sense of cautiousness remains, confidence is higher than it has been since the recession kicked in. “The UK economy is one of the leading economies in Europe at the moment,” says CWT Meetings & Events managing director UK & Ireland Ian Cummings. “Interest and inflation rates are stable and people are spending again, which is reflected in this sector. We’re seeing that budgets are coming back and delegate numbers increasing.” He adds that the agency’s venue-finding team saw a 34% increase in spend in March 2014 versus March 2013.

More than a third (37%) of the 50 corporate planners surveyed by C&IT said they saw budgets increase in 2013 (51% said budgets remained static), a trend that looks set to continue with 43% predicting a budget increase this year, and 14% saying budgets had not yet been decided, while 29% expect budgets to stay the same in 2014.

Some 70% of agencies said they saw an increase in pitch activity in 2013 compared with 2012, another sign that opportunities are increasing, although the rise in pitches is also being linked to an increase in involvement from corporate procurement departments. “We are seeing an increase in the number of live opportunities and pitches we are involved in. Both of these are strong indicators of an upturn in event budgets,” affirms Luke Flett, head of sales and marketing at Ashfield Meetings & Events.

However, while budgets may be coming back for some corporates, this trend is by no means universal and it very much depends on who you talk to and which sector they operate in. While some financial firms such as Barclays have been reported to be limiting staff travel to events, and others such as Schroders wrestle with new FCA guidelines (p21), clients in other sectors – for example, automotive brands such as Vauxhall – are bringing back or introducing new incentives.

Budget disparitiesCitroën’s event budgets remained static in 2013, but head of national events Neville Staines says that budgets will increase in 2014 as a result of “more experiential activity planned relating to vehicle launches”. But former Kaspersky Lab vice-president of marketing, Europe David Preston says that budgets have gradually decreased over the past few years. “This year we have seen an aggressive cut of almost 50%. We will be using sponsors for our internal events for the first time this year to reduce costs,” he comments.

In addition to continued pressure on budgets, agencies have outlined a number of key challenges they are facing, the major ones being an increase in involvement from procurement departments; the increased cost of pitching; proving ROI and the value of events; ever-shortening lead times; and corporates stretching payment terms. Some are also concerned about the potential impact of external factors on the UK economy, such as the situation between Russia and Ukraine, the Scottish Referendum and the general election next year.

Despite these challenges, the outlook for 2014 remains rosy for most. An overwhelming majority (92%) of the Top 50 agencies are forecasting growth this year. “We are seeing further ahead and talking to more clients about 2015 now than we were this time last year about 2014,” says BI Worldwide director of events David Battley.

“There is more confidence than there has been in previous years, but it has not returned to pre-recession levels of activity yet. I think it will do if the recovery continues, but we have been in recession for the best part of three to four years so we need at least three to four years of positive growth. There is lots of positivity but we have some way to go.” &

C&IT STATE OF THE INDUSTRY REPORT !"#$ %

Agency shake-up A number of comings and goings have given C&IT’s Top &" agency ranking a new look

C&IT’s Top 50 agency ranking has seen a bit of a shake-up this year, largely due to a number of new agencies taking part, including WRG Creative and The Fresh Group, but also because several – TRO and DRP being

the most notable – reported strong growth in 2013, propelling them up the table.

Ranked by UK event-based turnover for 2013 (agencies that do not report in December have provided an estimate for the calendar year), the top four agencies remain the same, although Motivcom is back in the top spot, followed by Ashfield Meetings & Events (formerly Universal World Events), Jack Morton Worldwide and George P Johnson, which took first, second and third spots in last year’s table.

Then it’s all change, with TRO jumping from ninth to fifth following a £7m jump in turnover from 2012 to 2013, while CWT Meetings & Events drops from fifth to eighth place. TRO chief operating officer, EMEA, Michael Wyrley-Birch attributes the rise to “additional clients and new business wins in a broader sector of activity”. New entry WRG Creative takes seventh place, meaning Banks Sadler slips just outside the top ten into 11th place.

Logistik jumped from 15th to 12th and DRP Group climbed from 17th to 13th place, as event-based turnover grew from £8.1m in 2012 to £15m following what managing director Dale Parmenter describes as “the most successful year in the company’s history”.

New to the Top 50Other new agencies in this year’s table include Top Banana

Communication, TMB Events, Communique Promotions, Corporate Events, Five Hats, Team

Spirit, CMM, Owl Live, FMI Group and Ex Events. Meanwhile, there are a

number of notable agencies missing from the rankings, with

W&O Events, The Motivaction Group, Line Up, Powwow, Black Tomato Agency

and Cascade Productions declining to submit 2013 financial figures.

Last year was a lot quieter on the M&A front, with no major mergers

and acquisitions taking place, though Banks Sadler bought

Windsor-based event and communications agency

Medical Projects

International (MPI) last March and DRP picked up Grosvenor TV in January. However, many agencies have forged on with overseas expansion, either organically or through acquisition – MCI has strengthened in Brazil and Turkey, CWT Meetings & Events debuted in China, WRG Creative opened a US office and acquired in Hong Kong, and TFI Group has opened an office in Singapore – are examples.

More than two thirds of agencies also expanded in size, with 68% of the 100-plus agency respondents increasing headcount in 2013, some significantly, while 19% saw numbers stay the same and only 13% had fewer employees. The growth in headcounts is in large part due to agencies expanding into new service areas as they evolve to meet changing client demands. For example, Logistik has brought audio-visual capabilities in-house with a new Logistik Technical division, W&O Events now has an AV/production manager in-house, while DRP has a new exhibitions division.

“Headcounts for us are quite steady, but in reality we are changing and evolving roles,” says Nigel Cooper, managing director at Motivcom, which owns Zibrant and AYMTM. “We have a lot more people in production, video editing, graphic design and web development-type roles now, whereas five years ago these job functions would have been in event logistics. Where we see the future, particularly in Zibrant Live, is in creative communications, which requires different skills.”

Change of emphasisThis trend towards events agencies positioning themselves more in the marketing, communications and branding space is resulting in some no longer referring to themselves as event management companies, though events are still a large part of their business. Peter Saunders, managing director at TBT, says: “We haven’t seen ourselves as an events company for a couple of years, and describe ourselves as an IT channel marketing agency.”

While established agencies continue to evolve, the UK agency landscape has seen a number of additions, including several well-known names leaving bigger agencies to launch start-ups. These include Chew Events, launched by Chillisauce business development manager Matthew Curran and ex-Imagination project manager Richard Brown; Thurty3, set up by ex-TBT and BCD M&I director Jason Lancaster; former SO Group and Essa chairman Steve Barratt creating Full Circle Events; and Paul Hussey and Jim Quintrell leaving Capita Travel & Events to set up The Conference Doctor.

With many of these already boasting big name clients on their books, they may well grace the Top 50 ranking in future years. &

KEY *C&IT forecast A Automotive B Construction D Food/drink E Electronics F Financial services G Government/public sector H Consumer goods I IT J Charity K Transport L Legal M Manufacturing N Aerospace O Energy P Pharmaceutical R Retail S Sport T Telecoms V Travel Z Associations/professional services

! MOTIVCOM !"."" #$"."" 0.90 !"" Milton Keynes, Derby, Canterbury A P O F T

" ASHFIELD MEETINGS & EVENTS %&.!" %&.!" 2.26 #$" Ashby De La Zouch, Leeds P A

# JACK MORTON WORLDWIDE* $$."" $$."" Undisclosed %! London T H G

$ GEORGE P JOHNSON '!."" '!."" Undisclosed %% Kingston A D F I T

% TRO (#."" (#."" Undisclosed !&" London, Manchester, Norwich A D R

& CAPITA TRAVEL & EVENTS (&.(" $'#."" Undisclosed %'& Cheadle, Derby, London, Swindon, Taunton F G R O

' WRG CREATIVE #!.#" (".)" Undisclosed #(" Manchester, London, High Wycombe P R T I

( CWT MEETINGS & EVENTS #).%" &&%"."" Undisclosed )% London, Manchester P I F T

) GRASS ROOTS GROUP #%."" #%"."" Undisclosed )'% London, Marlow, Fleet, Tring, Bath A F P M

!* BCD MEETINGS & INCENTIVES #".*" #".*" Undisclosed )% Maidenhead E P F

!! BANKS SADLER #".'# (".!& -0.16 #!$ London, York, Windsor F M P I

!" LOGISTIK &$.(! #".&( 0.89 #"" London, Leeds R D F T

!# DRP GROUP &$."" &%."" 1.50 #&& London, Worcestershire, Leeds F R M D A

!$ CI EVENTS &'.$" &'.$" Undisclosed (" London, Birmingham T R P

!% THE FRESH GROUP &&.#" &'."" 1.10 %" Cheadle, London R G F

!& MCI UK &".!% &%.") 0.02 *" London, Petersfield, Oxford, Glasgow, Belfast I P V B

!' RAPIERGROUP &"."" &"."" 0.42 &" Ware, Towcester A P J

!( SMYLE *.%" *.%" 1.05 '" Hertford, London A E I P T

!) RPM *.'" ##.(" 0.94 ##" London E D S

"* CONCERTO LIVE !.%" !.%" Undisclosed () London, Aberdeen I F O A E

+"! BI WORLDWIDE !.$" #$."" 0.81 #&% Newport Pagnell F A I E

+"! CROWN !.$" !.$" Undisclosed '" London D F K A

"# ATP EVENT EXPERTS !."" !#"."" Undisclosed (" London, Manchester, Glasgow F L B O

"$ THE TURNER AGENCY ).*! ).*! Undisclosed !! Wokingham, Bethersden P I

"% FIRST PROTOCOL ).$" ).$" 0.25 &# London F I N

"& ADDING VALUE %.!" )."! Undisclosed !) Twickenham A F I T

"' SLEDGE %.)# %.)# Undisclosed !& London F T G

"( WORLDSPAN GROUP %.%% %.%% 0.25 !* Abergele E P Z I

") TBT %.$" %.$" 0.90 &# Frome I P

#* TOP BANANA COMMUNICATION %.'" %.!" 1.00 (% Broome, London F P R A

#! TMG EVENTS %.($ (#.(" 0.38 )( Leamington Spa, Amersham, Stoneleigh A M S

#" FIRST EVENT %."" %."" 0.17 #* Leeds F M I B

## AOK EVENTS $.%" $.%" 0.23 #' London F D I R

#$ PRINCIPAL GLOBAL EVENTS $."" $."" 0.10 #) London I D M R

#% TMB EVENTS '.%" '.%" 0.35 !" Kingston Bagpuize A R P M

#& COMMUNIQUE PROMOTIONS '.(' '.() 0.25 !( Brackley T I P

#' ASPECT '.&# '.&' 0.44 #! London T P R O

#( CORPORATE EVENTS (.!& (.!& 0.40 (% Swindon F D I

+#) LODESTAR (.$" (.$" 0.01 #" London E O A F

+#) FIVE HATS (.$" (.$" 0.22 #! Bath P R G

+#) CORPORATE INNOVATIONS (.$" $."" 0.40 !% Banbury D I T J

$" D( EVENTS (.'! (.!* 0.32 % Eastnor A D

$# TEAM SPIRIT EVENT MANAGEMENT (.(" (.(" Undisclosed (" Oldham D T Z P

$$ CMM (.#" (.#" Undisclosed #' Leeds F R A H

$% OWL LIVE #.*" #.*" 0.32 #* Liverpool A T O F D

$& IN # EVENTS #."" #.'" 0.58 #) Hampshire, London, Manchester E F M

$' CONFERENCE CARE #.(" #.(" 0.32 &" Coventry, Dunfermline F D P I R

$( BLUEHAT GROUP #.#$ #.#$ 0.01 (& London R F T P M D

$) EX EVENTS #."" #."" 0.08 * London F I T P D

%* FMI GROUP &.)" $.#" 0.20 (" Chilton, London E F I T

AGENCYRANK EVENT!BASED

T"O #$%& 'm

TOTAL T"O #$%&

'mPRE!TAX PROFIT #$%&

'm

STAFF UK LOCATION

KEY INDUSTRY SECTORS

Z

C&IT STATE OF THE INDUSTRY REPORT !"#$ &

The top %" The top UK agencies ranked by their event-based turnover in !"#$

C&IT STATE OF THE INDUSTRY REPORT !"#$ '

#GrowthWhile the strong economy and predicted event industry growth is a

major positive and welcomed by all event agencies surveyed and interviewed by C&IT, it doesn’t come without its challenges. More than a quarter (29%) of agencies surveyed cite managing growth of their business as the biggest challenge they are facing this year. And this is an issue across the board for agencies of all sizes.

Caroline Lumgair-Georges, founder and managing director at Eventful, which ranked 54th by event-based turnover, just outside this year’s Top 50 agency ranking, says her biggest challenge is “managing the growth of the company while ensuring that we maintain the very high level of service that we provide to our clients and supplier partnerships.”

Meanwhile, at the top end of the rankings, Julian Pullan, president EMEA at Jack Morton Worldwide (which ranked third in the Top 50 table), agrees. “We are projecting and targeting further growth. And this is our challenge – to continue to grow market share in a very competitive market. We do so through our focus on being ideas-led and securing and retaining creative talent, but of course as we grow it becomes a bigger challenge each year,” he comments.

!RecruitmentClosely linked with the top challenge of managing growth, 15% of agencies

say recruitment is their biggest issue in 2014. BCD M&I senior director of operations Sue Burgess says “continuing to recruit quality personnel” is the top challenge facing the agency this year, while Patrick Howells, managing director of The Fresh Group, cites his as “being able to keep up with the levels of growth, including employing the best people to be able to provide the exceptional service we offer to our clients”.

With 84% of agencies surveyed looking to increase headcount this year, recruitment looks set to become even more challenging. And the issue is not so much that there is a lack of people out there with events experience, but more about finding the right people. Adding Value’s managing director, events, Tina Morris, says: “Finding the right people with the right attitude and work ethic is not easy.” Top Banana agrees: “Recruiting senior experienced staff is a challenge. It’s easy to get okay event planners, but we demand more.”

&Payment termsIt’s no surprise that payment terms has made its way onto the list of

the top challenges for agencies, with 11% citing it as the main issue affecting their business in 2014. “We’ve seen the stretching of payment terms from big blue-chip clients from 2010 onwards. They have been stretched and stretched and it’s a challenge,” says Lodestar managing director Phil Watton.

Sixty days seems to have become the norm for many large clients, though some are trying to extend to 90 days or even longer, and many agencies have reported clients using it as a negotiation tool to drive costs down. For example, “if you drop your fee, we’ll shorten the payment terms”. “Clients have realised they can try and save money for the business if they push payment terms further. It’s a long-term trend and its been added as a negotiation tool, not just in the events industry. Once again, it’s going to squeeze the small agencies,” says TRO chief operating officer, EMEA, Michael Wyrley-Birch. “We won’t accept certain payment terms because it’s just not good business.”

$ProcurementThe surprise here is not that procurement is among the top five

challenges facing agencies, but rather that it is not higher up the list. Just 8% of agencies surveyed cite procurement as their biggest challenge this year, though many more mentioned it as an ongoing problem. Ian Cummings, CWT Meetings & Events managing director UK & Ireland,

says: “Procurement involvement is a challenge for everyone, and clients themselves as well as us as an agency. It’s up to us to work with the creative side and the costing side to make sure we tick all the boxes.”

And the issue is not going to go away, according to Jack Morton’s Pullan, who believes agencies are partly to blame. “It’s about trying to get the best value. If you can understand what procurement want you can work with them. The problem with procurement is on the agency side. Agencies agree fees that aren’t sustainable as they’re going down too low. They need to be stronger in order to charge the right price,” he argues.

%Lead times“Short timescales – and the ability to do things faster and the juggling

of resource – are big challenges,” according to Simon Maier, creative director, TFI Group. Shorter lead times are largely seen as a consequence of the recession, which has meant clients having to get sign-off at much higher levels than before so budgets are not released until late in the planning process. However, despite the economy picking up, lead times do not appear to be increasing. Around 5% of agencies surveyed say that tight lead times are their biggest challenge in 2014, and CWT’s Cummings believes things will not improve. “I don’t think it’s going to go backwards. It will stay the same or continue to get shorter,” he comments.

BCD’s Burgess agrees that short lead times are a challenge that has been getting worse recently. “These are fine in a quiet market, but as the market becomes more buoyant, availability for venues and suppliers decreases. The choice of venue isn’t there. A cause for this could be clients having extra budgets and deciding they want to run events they previously didn’t have the money for. Although this is a challenge, it’s also a good thing because it means there is money and the market is doing well,” she adds. &

Top % agency challenges The top five challenges that event agencies are facing in !"#%

Cautious optimismThe outlook of corporate event planners is brighter but budgets and resource are key challenges

C&IT STATE OF THE INDUSTRY REPORT !"#$ (

Budgets may be on the increase but they are still cited as by far the biggest challenge for corporate event planners, according to the report. More than a quarter (28%) of the 50 corporates surveyed said that budgets

are their biggest issue, although the good news is that 43% do expect budgets to increase this year, with almost a third (29%) expecting them to stay the same.

Amanda Hibbs, business event manager at Specsavers, says: “Budgets have remained the same. In 2013, we held five main events and this has increased to 11 in 2014 because we have introduced a UK roadshow with one-day regional conferences.”

Internal resource was the next biggest challenge for 8% of corporates, while 6% said lead times are difficult. And resource looks set to continue to be an issue, with only 22% of corporates planning to increase headcount in 2014, although 41% did add staff in 2013. Meanwhile, the number of events organised looks set to grow, with around half (52%) of corporates expecting to run more B2B events in 2014 than 2013, almost a third (31%) expecting the number of events to stay the same, and just 17% expecting a decrease.

“Capacity is my biggest challenge because we have a demanding schedule,” says Advent Software’s events manager, EMEA, Vicki Howe, who is responsible for 50 events a year. However, she adds that she has noticed bookings are being made earlier, which helps. “We’ve already shortlisted a selection of venues for our events in 2015,” she explains. “Usually we wouldn’t do this until our events in 2014 had finished. This gives us more planning time and we get to launch our events and build anticipation earlier.”

Some corporate challenges, however, are very sector specific, such as the new FCA Inducement and Hospitality Guidance for financial companies. Schroders events manager Viki Stapleton says that the FCA guidelines are her biggest challenge. “Schroders obviously wants to be compliant, and we have been involved in meetings with industry peers to decipher the guidelines and assess the changes and impact these will make to our events programmes. It has been challenging for the financial industry, because we offer a service that relies heavily on face-to-face activities to manage accounts and promote our products.

“Clients are less likely to travel great distances for a Schroders day conference if they are not even offered dinner or overnight accommodation,” continues Stapleton. “In turn, this makes it more difficult to showcase our product ranges and fund managers to existing and prospective clients in a formal setting. The guidelines have resulted in a number of immediate changes to our events and hospitality programmes, and only time will tell the full impact this will have.”

A key trend among corporates is the growing use of technology in events: 64% of corporate event planners said they have or are considering creating a mobile app for their events in 2014. This has grown from just 23% in C&IT’s State of the Industry report in 2010. Social media uptake has also grown with 19% of corporates expecting all of their events to include social media elements, and a further 19% expecting at least half (50%) of their events to include social media. &

Victoria Capper Events manager, Permira Events budgets have increased. We organised around 65

events last year and are doing lots more this year, which is set to increase again in 2015. In 2014 we have introduced new types of events on knowledge sharing between portfolio companies. The number of events is increasing due to a change in focus – there is an awareness that we need to engage with different audiences and push to get sectors to focus more on networking.

Dawn Severn Events manager, AXA Commercial Lines and Personal Intermediary In 2013 we organised

approximately 50 events, including meetings, roadshows and conferences. We’re predicting slightly fewer events this year because we’re focusing more on business activity. Supplier and venue costs are all rising but our budgets aren’t. It can be a challenge to deliver the same high-quality event and stay within budget.

Sophie Christopher Head of events, PR and external marketing communications, Office Depot

Budgets have stayed the same, which is positive news. The outlook is mildly brighter, but there is still an air of caution. There is now a huge focus on ROI and the delegate experience. We have a swift internal system so budgets can be signed off quickly, but I can understand that finance departments are looking harder at what is being spent and asking more questions.

Corporate forecast

C&IT STATE OF THE INDUSTRY REPORT !"#$ )*

#Budgets More than a quarter (28%) of the 50 corporates surveyed by C&IT stated

that budgets are what keep them up at night, because they’re forced to not only maintain high standards but continuously raise them while funds are spread ever thinner. “Our budgets are constantly changing and getting squeezed so we need to be more creative,” says Melissa White, head of experiential marketing at Sony Mobile. “Expectation levels must not go down, so you have to find the best way to use the budget you have.”

Rebecca Harmer, marketing specialist at Network Rail, says that over the course of the next five years all budgets at the company are being closely looked at and greater savings need to be made: “We are asked to deliver more for less as budgets are spread further,” she says.

At Kaspersky Lab, former VP of marketing for Europe, David Preston, told C&IT before he left his post in June that event budgets were feeling the strain and the company is looking at new avenues to save money. “Budgets have gradually decreased over the past few years and this year we have seen aggressive cuts of almost 50%. We will be using sponsors for our internal events for the first time this year to reduce costs,” he comments.

! Internal resources As budgets tighten, so do resources, with 8% of corporate event planners

claiming that internal resource is their biggest challenge. Advent Software, Centrica Energy and Peugeot are three examples of huge brands with one-person

event teams delivering hectic yearly programmes. Fico’s director of corporate events, Joy Thomas, is planning to add more people to her team this year as assignments continue to build. “The workload and the capacity to execute our events has been a challenge. It gets to a point where you can’t physically do more as a team, and to get standards high and keep them there you have to get more support,” she says.

&Staying innovativeIf the last two challenges are keeping corporates up at night then staying

innovative, which 6% of the survey put ahead of budgets and internal resource, appears to be one they welcome. “It’s a question of differentiating yourself from your competitor,” says Lucy Hudson, head of field marketing, international at Teradata. “In the UK, because there are lots of suppliers doing lots of similar things, you have to make sure that what you’re providing is giving your delegates more than other events.”

Sony’s White says keeping audiences engaged with innovative content is particularly challenging in the IT & Telecoms industry, where delegates have the latest device at their fingertips around the clock. She explains: “Our delegates are over-stimulated and constantly connected to so many channels. We need to keep them engaged with what we’re saying and spark their imagination with content that is both meaningful and interesting.”

Fico’s Thomas says she not only welcomes the challenge, but relishes it: “It’s the best part of my job. My manager gives me the

freedom to test things out such as registration platforms and set design. We have confidence in new ideas because you’ve got to try new things.”

$Lead times Although some annual conferences and staff parties are put into

calendars months in advance, some events just can’t be planned for, which is why 6% of corporates told C&IT that lead times are their main challenge. “We are being asked more and more to be responsive with short turnaround times,” states Network Rail’s Harmer. “This puts added pressure on budgets and reduces what we would like to achieve.”

The fast-paced nature of nearly all industries today means that time is valuable and people’s diaries get booked up fast. Not being able to give delegates sufficient notice about upcoming events makes it very difficult for corporates to secure attendees. However, Harmer believes that events are starting to adapt, adding: “I think the industry is moving in this direction and events will become more and more reactive.”

%Rising venue and supplier costs “The cost of suppliers is always

increasing and it has done so recently,” says Fico’s Thomas. Unfortunately for corporates, rising venue and supplier costs tend to align with shrinking budgets, meaning event planners have to become more creative in the way they utilise their finances. Thomas admits to being one of the luckier few. “Our budgets need to reflect this so they increase as a result. We have a bit more money now so we can be more choosy with suppliers,” she says.

However, the events team at Network Rail hasn’t been so lucky. “With the rise of venue costs we have been forced to reduce roadshow coverage and make greater use of in-house resources such as training centres where available,” states Harmer. Solutions lie in web streaming, filming conferences and online interactive seminars as alternatives to finding a venue. “We work very closely with our event agencies to ensure we are making the most of their services, which puts increased pressure on us to keep to budget,” Harmer adds. &

Top % corporate challenges Sony Mobile, Network Rail and Fico on why budgets, internal resources, innovation, lead times and supplier costs are the main issues confronting corporate event planners

C&IT STATE OF THE INDUSTRY REPORT !"#$ ))

C&IT surveyed and interviewed more than 200 corporate and agency event planners for our annual report, and the topics of pitching, procurement and payment terms came up time and time again as both key trends

and challenges currently affecting the UK events industry.

And while they are separate issues, they are inextricably linked. More than two-thirds (70%) of agencies surveyed said they saw an increase in pitch activity in 2013 compared with 2012. W&O Events and TRO are among the agencies that took part in more pitches last year, both stating that pitch activity increased around 30%.

“It has increased every year for the past few years,” says TRO chief operating officer EMEA, Michael Wyrley-Birch. “Five to ten years ago, we’d have been working on three to four big pitches a month. Now it’s more like four to five pitches a week.

PitchingThe increase in the number of pitches is being seen as both an opportunity and a challenge – an opportunity because agencies are getting the chance to win more new business, and a challenge because of the huge cost and resources involved in pitching.

To deliver a good pitch, an agency has to do a large proportion of the work up front, with a one in four or five chance – or even more, depending on the size of the tender – that this investment will be recouped. Kevin Jackson, George P Johnson VP sales & marketing EMEA, says: “Each pitch costs us around £30,000 – it’s like driving a BMW off the roof every time. It hurts.”

There are various theories behind the increase in pitches, one being that there is more money in the sector and more activity as clients start spending on events again after the recession. But most believe it due to the increased involvement from client procurement teams.

Phil Watton, managing director at Lodestar, says: “The increased number of pitches we did in 2013 is an awful lot to do with procurement. We’ve seen an increased involvement with procurement across the board as the pressure on companies to buy better continues, which puts pressure on events and all marketing areas. We’ve found that some projects that probably wouldn’t have gone out to pitch before are now doing so – particularly with a few of our automotive clients.”

W&O managing director Andrew Gilkerson agrees that procurement is leading to the rise in pitches. “It’s at mid-sized

companies that we have seen the increased involvement in procurement at event level,” he explains, adding that previously, many events may have been pitched by the event manager without procurement involvement, but now procurement are getting involved and wanting to run RFPs for every single event. “It means we are working harder for the same amount of business as we are involved in more RFPs, which has resulted in the need to invest in more specialist proposal-writing roles to respond to this.”

TRO’s Michael Wryley-Birch says that at many corporate clients, events over a certain budget are now automatically going to pitch. “I think we are seeing more pitches because more agencies are saying no,” he says. “We’ve probably turned down as many pitches as we’ve said yes to. What that means is that if a client went out to three agencies before, they might now go out to seven agencies with the expectation that three or four will respond. As soon as you get to seven or more, you end up with a situation where more people drop out. We’ve heard examples of pitches going out to 20 agencies.”

Creative versus costThere is also concern that some procurement-led pitches are pure cost exercises to get the incumbent agency to reduce costs, which is a waste of time and money for agencies involved. Another challenge is that procurement is primarily focused on driving bottom-line discount, which does not take into account the creative and branding side of events, which is of huge importance.

The three perilsPitching, procurement and payment: three ‘P’ words, and all potential pitfalls for event agencies

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IBM’s Vikki Bradney-Spencer, UKI SWG marketing manager, says: “Event planners need to understand that procurement need to reduce costs and in return they need to understand the value each supplier brings to an event. It’s about establishing a relationship and making sure they understand your needs as an event planner.”

Alison Williams, divisional events manager of L’Oréal Professional Products UK and Ireland, admits that procurement is an ongoing challenge. “There is an understanding around basic training events that require a certain number of hotel rooms, but procurement’s understanding of the highly creative side of events is limited. It has caused problems over the years and prevented some large events from happening.”

Another nasty side effect of procurement involvement is the impact it is having on payment terms, with many agencies concerned by the increasing number of clients that are trying to stretch payment terms and the subsequent impact it has on cashflow. David Preston, former Kaspersky Lab vice-president of marketing Europe, says: “We have standard 30-day payment terms, but if 60 days becomes the new norm in the business world, we will move that way too. I can see that as procurement teams get more involved, they will push to extend payment terms because it is better for the business.

“If agencies need to borrow money to pay their suppliers before they receive payment from the client, they will need to factor in the cost of borrowing money into their quote, which could push up prices and won’t be good for anyone. Procurement teams need to be educated on the impact late payment terms could have on business.”

According to many agencies, standard payment terms have shifted from 30 to 60 days and in some cases 90 or more. Des Mclaughlin, divisional director, Grass Roots Meetings & Events, says: “I have seen a Spanish client ask for 160-day payment terms, which would effectively turn an agency into a bank. There is an imbalance of power between the agency and some major corporates.”

Negotiation toolPayment terms are also being used as a negotiation tool by some clients. “We are seeing some corporates saying that they will pay us within 30 days if we bring our costs down,” says Alex Hewitt, managing director at AOK Events.

Nigel Cooper, divisional managing director at Motivcom, says that payment terms are being used as a stick because corporates have realised that it’s a way to leverage money. But he adds: “There are some clients out there who are first class, exceptional. And they support their supply network. But you can’t avoid every client who tries to extend payment terms because it’s a general trend. At the same time, some of the organisations complaining about payment terms are doing the same to their suppliers. It’s a merry-go-round, and a bit of a contradiction.”

Procurement is here to stay, and the challenge of late payment doesn’t look like it’s going to improve any time soon. Agencies need to look closely at payment terms, and either negotiate with clients where possible or turn down pitches where payment terms are unacceptable.

Patrick Howells, managing director at The Fresh Group, says: “We have to be very analytical before agreeing payment terms and it’s important that agencies are able to negotiate before signing anything. We suggest a payment plan to our clients where payments are staggered. If you can collaborate with your client then it can work for both parties. There needs to be a discussion up front and agencies need to think creatively about what terms they offer.” &

Event planners need to understand that procurement need to reduce costs and in return they need to understand the value each supplier brings to an event. It’s about establishing a relationship and making sure they understand your needs as an event plannerVikki Bradney-Spencer, UKI SWG marketing manager, IBM

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Event activity analysisBudgets are on the increase and clients are holding more events, but where is the additional money being spent?

More than two-thirds (72%) of the 50 corporate event planners surveyed by C&IT said they held more B2B events in 2013 compared to 2012. While there has been an increase across the spectrum, from staff

meetings and conferences through to team building and overseas events, the biggest rise has been in incentive travel.

Incentive increaseMore than a quarter of agencies (27%) surveyed say they have seen an increase in incentive activity in the past 12 months. This is followed by meetings and conferences – 18% of agencies have seen a rise – while 10% of agencies have seen an increase in experiential events and 9% have seen an increase in product launches.

“We have seen a slow but steady increase in incentives in 2013,” says Luke Flett, head of sales and marketing, Ashfield Meetings & Events. “2014 has seen this increase further in terms of the volume of new incentive-based opportunities we are pitching. Whilst these events may not be taking place till 2015 in some cases, we have certainly seen a spike in the current demand.”

Further afieldThe increase in incentives is partly down to some clients introducing incentives for the first time, while other corporates are returning to incentive activity after a break during the recession, and some are increasing their budgets. Meanwhile, those that travelled to Europe before are venturing further afield to mid-haul destinations such as Istanbul, Morocco and the Middle East, while those who were travelling four to five hours’ flight time are now considering long-haul.

Vauxhall is running its first incentive travel programme for retail partners in some years, with top performers getting to travel to Miami to watch England’s World Cup warm-up games and some lucky winners travelling to Brazil. Indesit, meanwhile, is allocating more of its total event budget on incentives in 2014, and took 150 retailers plus partners long-haul to Jamaica this month (June).

“We have seen some of our clients reintroduce certain event types, such as incentives, that have not been included in their event programmes in recent years,” says Ashfield’s Flett. But he adds: “Incentive travel groups are looking for more value from their programmes and year-round engagement and communication. There is a big focus on extending the lifespan of the event.”

Perception issuesDespite incentives increasing, only 22% of corporates surveyed by C&IT say they run an incentive travel programme – 78% say they

don’t do incentive travel. And there is still a stigma surrounding it, with 37% of corporates saying they feel perception is still a barrier to incentives.

Concerto Live managing director Peter Jackson says: “Things have happened in the incentive market. One is that clients have stopped calling them incentives and instead call them a ‘company weekend’ or an ‘off-site’, because I think there’s a nervousness generally with clients to be seen to be celebrating. There’s still that mentality and stigma, especially in the finance sector.”

Sector-specificThe increase in certain event activity is largely tied to industry sectors, with the new FCA guidelines impacting financial companies and making them hesitant about spending on hospitality or incentive activity, or at least being seen to spend money on these types of events.

Meanwhile, pharma firms are also subject to tighter regulations and controls, which has impacted their event activity, too. “The pharmaceutical industry tends to be running more events but they are smaller, more content-driven events,” says Flett. “Because doctors are being scrutinised more, they are more choosy and so there is a need to provide more specialist educational knowledge to attract delegates.”

The rise in product launches and experiential-type events is more prominent in the automotive and retail sectors, with brands using pop-up style experiential retail experiences to target customers. “The automotive sector has recovered positively and we’re seeing a lot of events come out of companies that have previously been really quiet,” says BI Worldwide director of events David Battley. “The types of events have broadened out as well.” &

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Technology boomThe number of corporate event planners investing in event technology has more than doubled since !"#"

Corporate trendsOf the 50 corporates surveyed, 64% say they already have, or are considering creating, a mobile app for their events, compared with just 23% in 2010. The impetus towards technology doesn’t stop there, however, as 19% of corporates now expect all of their events to include a social media element. Kaspersky states that 75% of its events will incorporate some kind of social media in 2014, while Barclays predicts social media to be evident in 50% of its events this year.

Despite this upwards trend, some corporates admit they struggle to engage their delegates through social media platforms. Victoria Capper, head of events at international private equity firm Permira, says: “We do very little in terms of event technology but we’ve had to move with the times. It’s a challenge to push people online with an app because we find that our delegates prefer printed content in front of them.”

On the type of technology Permira do use, Capper says: “We use websites that we’ve built to get more information on the event out there before it’s taken place, but we find that we’re still getting emails from delegates despite the content already being available.”

Smarter technology calls for smarter useWith the majority of corporates now expecting technology, such as the latest mobile apps and delegate registration platforms, agencies are striving to get to the front of the queue as new products continue to appear on the conveyer belt.

David Battley, director of events at BI Worldwide, believes it is important to evaluate the use of technology properly, as opposed to using it for the sake of it. “There seems to be this one-upmanship to offer quicker and smarter technology. We need to take a step back and ask what the technology will achieve and how it can improve our services and platforms.

“Our clients are expecting us to keep them up to date with technology. There is lots of technology out there and it’s important for us to evaluate it and advise what is right and what isn’t right for our events,” he says.

Client needsWhen asked which areas of technology agencies were investing in, 22% say mobile event apps, followed by 15% preferring delegate management software. Hampshire-based agency In2Events says they are investing in both mobile apps and delegate registration software, especially the latter.

“We’ve identified that our customers needed a good registration platform,” says In2Events marketing manager Richard Harper. “Corporate clients want that personal touch and that’s why we invested with Certain to become a European partner for its registration system.

“Working with Certain gives us more scope when talking to clients as an agency. There are a lot of agencies interested in technology but there’s also a reluctance to invest in it fully and we’ve seen this as an opportunity to capitalise on.”

Technology on the upPhil Watton, managing director at agency Lodestar, concludes that the pace in which technology is evolving can only be positive for the industry. “It’s great because it’s changing constantly. Various apps for registration and delegate management are being improved and becoming more interesting all the time.

“The technology we use within events generally gets better and cheaper and recycles very quickly, so it’s up to us to make sure we know what is out there,” he says. &

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Looking back to 2010, the events industry seemed to be shrinking. In our State of the Industry report that year, 43% of agencies made redundancies and 11% declined to answer, suggesting that this figure was even higher.

Corporate planners didn’t escape the chop either, with 41% stating that their teams had decreased in size.

In strong contrast, 2014 looks set to be a year of growth. For the 50 corporate event planners surveyed, 41% said they increased staff numbers in 2013 and 22% expect to expand their events teams in the next 12 months. For the 100-plus agencies contacted, 68% added more staff in the past 12 months and 84% plan to boost headcounts in 2014.

Changing strategiesNot only is the industry surging upwards in size, but recruitment strategies have changed dramatically. For example, WRG Creative has looked for talent outside the live events industry. Carl Halliday, deputy managing director at the agency, explains: “We have focused on adding value for clients by appointing people from specialist sectors, such as the pharmaceutical industry. It allows us to provide relevant, sector-focused insights for clients, which has been a key advantage over competitors.”

Motivcom’s managing director Nigel Cooper agrees: “We don’t look inside the industry to recruit now. We are targeting marcoms and brand delivery agencies rather than event agencies, because they have the skill sets we need.”

Changing job rolesAgencies have also focused on creating new roles, particularly in the areas of proposal writing, video, event technology, digital comms and graphic design. Cooper continues: “Roles are changing and evolving. We have more people in production than we did 12 months ago and more in video and graphic design, while we have less in event logistics. This is partly due to better technology enabling us to do the job better.

“Where we see the future, particularly at Zibrant Live, is creative comms. We are employed by some clients to only do the creative branding for an event, and we’re not actually touching event logistics. We’re doing things like distance learning, video production, theming and content development for conferences and above-the-line activation at festivals.”

This year’s report revealed a staggering increase in live pitches – 70% of agencies surveyed said they saw an increase in pitch activity in 2013, compared with 2012. To meet the demand, extra staff are required, as Michael Wyrley-Birch, TRO’s chief operating office, EMEA, explains: “We took in 50 staff in the UK last year, partly because of new business wins. The shape of the business has grown and changed. We are seeing more staff-intensive events and many more pitching opportunities, but we don’t want to take staff away from the front line so we have had to increase headcount to deal with pitching opportunities. Also, we are needing more skill sets in the technology area and are doing more insight- and research-led work for clients.”

Staff retentionRetaining staff remains a key challenge, too. BI Worldwide director of events, David Battley, says: “You want to do everything you can to retain good people. It’s a constant wrestle. We offer a wider programme of staff wellbeing. However, you’ve got to provide people with promotion opportunities, which isn’t always possible.

“The bright lights of London will always come calling at some point – it’s seen as a place where creativity is strong and many young people want the opportunity to move to and experience living in London.” Sue Burgess, BCD M&I’s senior director of operations, EMEA, concludes: “We want to make sure people join our industry and experience events. We want to blood in new talent, but also look after who we have.” &

Recruitment – is the industry growing?Redundancies and restructures have plagued the events industry for half a decade, but the State of the Industry report !"#% found an overwhelmingly positive picture on recruitment

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Training and educationThe value of event management degrees continues to divide the sector

The statistics alone present a confusing picture. In our survey, agencies were asked if event degrees provide relevant skills for a career in the sector. Some 27% of the agencies surveyed answered no, 27% were undecided and 46%

said yes. While the majority may appear unconvinced, 70% of agencies recruited event management graduates in the past 12 months. So, what does the industry really think?

‘Yes’ voteThere is a consensus across the industry that event degrees provide a solid foundation of theoretical knowledge and skills. Tina Morris, managing director of agency Adding Value, is a big fan. She says: “We provide input into the Leeds Metropolitan University course and our CEO, Randle Stonier, is a guest lecturer. With the support of agencies in the work placement year, universities can produce promising, well-rounded candidates. The biggest challenge is to ensure that students gain experience in the variety of event disciplines from the outset. But, like any degree candidates, they still need to have the right attitude, hunger and passion.”

Lucy Collins, Principal Global Events head of product development, agrees: “The people we have employed with event management degrees have been able to hit the ground faster than many other new employees entering the industry. However, this is not true across the board. In some cases, it comes down to the personal attributes of the individual.”

Key concernsWhile no degree can teach creativity, passion and stamina, there are concerns that existing curriculums simply aren’t relevant. Simon Maier, managing director of events agency TFI Group, says: “The content is too broad. It mostly covers logistics and includes education on the hospitality industry with very little about delivery, measurement and event technology.”

Luke Flett, head of sales and marketing at Ashfield Meetings & Events, has similar concerns. “We have found that the skill sets of an event management student have been suitable for entry-level roles in our organisation, and any gaps could be rectified through our internal training programmes with relative ease. However, the event management landscape is changing, particularly in the healthcare sector. Roles are becoming either more administrative or reporting-based at one level and more strategic and creative-led at another.

“As more and more of our business becomes focused on the audience engagement aspects, such as meeting content, message delivery, creativity and strategic thinking, we find there is a definite gap in the current skill sets of graduates. This is understandable because these are harder skills to acquire at a young age, where a typical graduate would not have had exposure to [them].”

For some employers, a degree itself is valued, rather than the discipline. Lodestar’s managing director Phil Watton favours creative courses. He says: “I’m not convinced that all events courses offer what we need. What we do is heavily creative, so I look for students with a creative arts or communication degree because that’s the kind of background we want.” Nevetheless, degrees can be a key differentiator in the job market, particularly when combined with work experience. Mark Riches, managing director of First Protocol, says: “An academic degree could be a differentiator between two candidates with similar skills and experience.

“Yet, experience is still king. Degrees that include a sandwich course, where students are able to gain experience, are most beneficial. We would like to see wider entry routes into the industry, including a formal apprenticeship scheme.”

ApprenticeshipsThere is wide industry support to set up an apprenticeship programme in events in the UK. Event consultant Sarah Wright has been campaigning for a national apprenticeship framework for nearly three years. “There are some apprenticeships out there, but they do not meet the needs of our industry,” she says.

Some larger agencies, such as BI Worldwide, W&O Events, DRP Group and Grass Roots Meetings & Events, have internship or graduate schemes in place, although many of the smaller agencies lack the resources to drive their own programmes forward. BI Worldwide’s director of events, David Battley, says: “We hire two graduates every year on our dedicated graduate programme. It’s difficult, as these days the typical graduate tends to do a job for just two years and some may have had as many as seven jobs by the time they turn 35.”

CertificationAssociations such as MPI (Meetings Professionals International) advocate the Convention Industry Council’s (CIC) internationally recognised Certified Meeting Professional (CMP) qualification, which helps event planners sharpen their skills and even boost their earning potential. Office Depot’s head of events, Sophie Christopher, points out: “Certification would help with the credibility of the events role within a business. In difficult times, the events team is easily disposable. It shouldn’t be, but we do need solid objectives and proof that we assist the business in achieving its overall targets. There are some excellent heads of events who would like to brush up on their skills.” &

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Sustainability updateAlmost two thirds of corporates ('#%) surveyed in this year’s State of the Industry Report have revealed that they do not actively apply a CSR policy to their B!B events

Budgets were hit hard during the recession and remain under scrutiny, although positive signs are being shown. As a result, sustainability has become marginalised as other issues take priority. Vicki Howe,

events manager, EMEA for Advent Software, says issues such as internal resource make it difficult for her to find time to integrate a CSR policy into the company’s events. “It’s not something we’ve looked to push up the agenda. I’m sure it’s something we should be thinking about, but at the same time we’re very limited with it being just me in the team,” she says.

Agencies all over the UK have also seen the issue slide down the agenda. “Our experience through the recession has been that there is an indifference to it,” says Maximillion managing director John Strachan, who revealed that only 5% of his clients ask for a CSR element to their events. “It’s a nice thing to have but it is not a priority. Stakeholders aren’t particularly interested in it and it’s gone off the Government’s radar.”

Corporates appear to believe that sustainability and applying a wider CSR policy to their events is worth consideration, but seem reluctant to truly explore its potential.

James Millichamp, institutional sales manager at MCI Group, believes that both clients’ knowledge and interest in CSR is very basic: “Clients either don’t think about it or they employ a sustainability policy that just ticks a box. Around 5% of our clients ask about sustainability, but they are very standardised questions, as opposed to asking for specific proposals.” This is despite MCI UK having a group sustainability director at the agency who is specifically in charge of this area. Maximillion’s Strachan adds: “The requests we get from clients are tainted by a superficial knowledge on the subject, and they don’t want to properly explore the possibilities.”

However, some agencies surveyed for our report revealed that a sizeable number of their clients do in fact seek to apply a sustainability or CSR element to their events. TRO, which sits in 5th place in this year’s top 50 agencies table, stated that a resounding 90% of its clients have an active interest in the issue.

Peter Trapnell, creative director at TRO, believes that eventually sustainability will become a part of events, but helping clients understand the importance of introducing a CSR policy is key. “It’s about getting it into the client’s head and helping them understand that they can actually save money doing it. We’ve seen that it starts at board level and eventually filters down,” he says.

Issues surrounding carbon offsetting, and how materials can be reused again after an event, are the areas that corporates that have sustainability on their agenda are driving at. Trapnell says that the agency’s automotive clients are leading the way as they continue to push more environmentally friendly products to market. “As clients get their heads round it and realise that it’s not just a tick-box exercise, people will get on board and see the importance of it and understand how to utilise it,” he says.

Ultimately, as C&IT’s State of the Industry Report has revealed, businesses are becoming more optimistic about the economy, with the UK events industry in a strong position, which bodes well for sustainability. As the pressure on budgets begins to alleviate slightly, the next 12 months could see CSR and sustainability move to the forefront, with corporates dumping their ‘tick-box’ tendencies and seeing what it can really offer. &

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The downward spiral of associationsAssociation membership levels saw a huge decline in C&IT’s report. So why are event professionals turning away, and is it time to re-think the model?

Three associations reign over the UK events industry: EVCOM, the Institute of Travel Marketing (ITM) and MPI, according to figures from our State of the Industry report 2014. Some 43% of the agencies surveyed are members

of EVCOM. However, in 2013, before Eventia and the IVCA merged to form EVCOM, 73% of agencies belonged to Eventia. In fact, between 2011 and 2014, and before merging, Eventia was already experiencing a 20% decline in membership.

Similarly, the Chartered Institute of Marketing and ISES both saw a 5% fall-off, according to C&IT’s survey, while ITM’s market share remained constant at 12%. MPI’s UK & Ireland chapter experienced a record year pre-recession in 2008 and has seen a steady decline ever since. Membership among corporate event planners has historically been low, too.

Why aren’t more signing up to associations?Time constraints, economic factors, irrelevance and just plain apathy are at the heart of the problem. Lex Butler, business development director at events agency Zibrant, which is part of Motivcom, explains: “Zibrant cancelled its membership of Eventia, now EVCOM, last year because we didn’t find any benefits that could enhance us as an agency. We organise staff training in-house and keep up to date on the industry by reading industry publications and attending free educational events.

“Belonging to an association is also time-consuming. It involves time out of the office and most people are focused on their job – association membership just isn’t a priority.” Butler also questions the relevance of associations. “Offering services such as a CSR toolkit seems old hat now, too. Associations need to be quick to respond to industry issues and the latest trends,” he says.

Money, money, moneyEconomic factors have also played a role. Miguel Neves, president of MPI UK & Ireland chapter, says: “The financial crisis, which we thankfully seem to be exiting, has placed greater pressure on budgets and personnel across departments and industries. This, in turn, has given staff less time to focus on engaging with associations, while making sign-off for association membership or sponsorship costs harder to obtain.” %

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Too many?For some, there are simply too many associations. Simon Mogford, sales and marketing director of agency First Protocol, which is a member of the Chartered Institute of Marketing, says: “The number of associations out there illustrates the lack of a cohesive voice and one single body that other professions benefit from. That EVCOM still accounts for less than half of the industry suggests there is still some way to go to having the unified industry body we need.”

However, Sue Burgess, senior director of operations for BCD Meetings & Incentives, believes that there aren’t too many associations and that each is important because they focus on different areas. She says: “Some focus more on training, whereas others produce useful white papers. Associations are really important when there is new legislation affecting the industry, such as TOMS. BCD M&I are currently reviewing their membership of industry associations. We feel it is very important to be part of industry bodies, both to input and support our industry and to share industry best practice and trends.”

CommunicationWhile ISES UK’s chapter has bucked the trend and seen membership levels increase after redefining its proposition around creativity, Jane Hague, the chapter’s outgoing president, suggests that important “value messages have got lost along the way”. Younger generations are likely to have missed this message, too, as Neves explains: The newer generations, which are quickly growing in the workforce, are possibly not as familiar or comfortable with association models and the benefits and commitments involved. “The most important challenge we face is communicating the value of membership and making sure that our members make full use of all the benefits.”

Shift in focusThere is a trend across all associations to focus on engagement above membership. Neves says: “This means that associations will rely less on the membership dues, which changes their core revenue model. I don’t believe membership is killing associations, but I think membership is not right for all meeting professionals. We welcome all participants to our events and initiatives. Members will always get better prices and access to unique

features, but we are very happy for participants to choose not to become members. We welcome their engagement in the format that is the best fit for them.”

Smaller agencies and newcomersZibrant’s Butler believes that associations may appeal more to people who are new to the industry and to smaller agencies that do not have the resources to train staff, for example. Indeed, Ovation Global DMC’s marketing manager Ian Hemmingway is relatively new to the industry. He says: “Associations are extremely important. Ovation is a member of Site, ICCA and MPI. We can’t claim to be experts in conferences and meetings if we don’t practice what we preach. As a relative newcomer to the industry, I found associations great for physically meeting and understanding our industry, and for leadership and learning resources.

“Younger members of the industry are thirsty for knowledge, particularly the opportunity to learn from industry icons. Nuggets of advice from the likes of Pat Delaney, Miguel Neves, Carina Bauer or Avinash Chandarana don’t grow on trees and unless you work alongside these individuals regularly, you don’t get access to their advice without being an active part of an association’s L&D events.” &

Zibrant cancelled its membership of Eventia, now EVCOM, last year because we didn’t find any benefits that could enhance us as an agencyLex Butler, business development director, Zibrant

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The UK capital remains a firm favourite for corporate event planners, with 78% of corporates surveyed saying that London was the UK destination they most used in 2013, followed by 8% who said Birmingham.

Around 44% surveyed hold events only in the UK, but for those that do venture further afield, Europe remains popular. Barcelona tops the list for 6% of corporates, followed by German cities including Berlin, Hamburg and Munich, as well as Madrid, Paris and Prague.

Further afield, US cities are gaining in popularity, with New York, Miami and Boston coming up as destinations either used in 2013, or on the hit list for 2014 and beyond. Financial IT firm FICO hosted 900 delegates in Miami in April 2013 for its FICO World event, Kleeneze held a Miami incentive last year, and the destination was chosen to host the Association of Corporate Travel Executives (ACTE) spring conference in April this year.

Event agency AYMTM is among those that have seen increased interest in the US. Natalie Gunson, managing director at AYMTM, says: “During the course of the recession and up to 2012, Europe dominated our incentive destinations, with smaller group sizes.

“Since then, we’re seeing an average increase of 25% per annum, with 2014 set to be a record-breaking year in delegate numbers and long-haul destinations. Our clients have chosen ever-popular, highly desirable routes such as the US and Dubai, with direct and frequent flights from the UK.”

Destination trendsThe hottest cities for events in !"#$ and !"#%

London

New York

Dubai

With incentive travel budgets coming back, the big challenge for corporates is finding destinations that are different, and ones that delegates have not been to before. Unsurprisingly, with the World Cup in Brazil, and the Olympics just two years away, the country was named as a destination many corporates are considering holding events in. Castrol is among the World Cup sponsors taking a select group of its worldwide distributors to the World Cup in Brazil as part of its Ambassador Club incentive programme.

Other emerging or new destinations mentioned by corporates surveyed include Cancun, Oman, Sicily, Egypt and India. Oman was picked by Colt Technology Services for its Inner Circle annual incentive programme this year, and the company took 100 winners on a four-day trip in April. “Inner Circle should represent the trip of a lifetime,” says Colt employee engagement and recognition manager Jason Sullivan. “We aim to select a different and interesting destination each year for our top contributors. Because we have a range of nationalities and cultures working at Colt, we also try to find a destination that will suit varied tastes.”

In addition to these emerging destinations, old incentive favourites, including Mauritius and the Caribbean, appear to be making a comeback, with Goodyear-Dunlop and Indesit holding Caribbean incentives in Barbados and Jamaica respectively this year, while Mauritius has recently attracted groups from Fico and Cisco. &

C&IT STATE OF THE INDUSTRY REPORT !"#$ !)

Future forecastA whopping (!% of agencies are predicting growth this year, although pre-recession levels of business are yet to return

Rewind to C&IT’s State of the Industry Survey two years ago, and you’ll find many event agencies reluctant to predict the future. In 2013, the diagnosis was regarded as stable. This year, the words ‘strong’ and even

‘record-breaking’ are being used to describe the events industry as we look towards 2015. There are plenty of predictions among agencies of ten to 20% growth in 2014, and many believe 2015 could be even better.

Upturn timeAn upturn in the economy is undoubtedly the first reason for such overwhelming positivity in this year’s survey. Julian Pullen, EMEA president of brand experience agency Jack Morton Worldwide, believes the forecast looks good. “We are where we hoped we’d be and clients will increase their spending due to growth in the economy and added confidence,” he says.

BI Worldwide’s David Battley agrees: “There is more business confidence than in previous years. With our existing customers, we are seeing more visibility further ahead. We are speaking to more people about 2015 now than we were this time last year about 2014.”

Budget increasesC&IT’s report also revealed that 70% of agencies have seen an increase in the number of pitches in 2014 – a strong indicator of an upturn in event budgets. More than a third (37%) of corporate planners said they saw budgets increase in 2013 and 51% said budgets remained static.

In 2015, spending is anticipated to grow as 43% of corporate event planners expect a budget increase in 2014, while 29% believe budgets will stay the same and 14% have not finalised plans yet. “Budgets have stayed the same at Office Depot,” says Sophie Christoper, who heads up the company’s events, PR and communications. “It’s positive news. The outlook looks mildly brighter, but there is still an air of cautiousness.”

Conversely, budgets are tightening for Kaspersky Lab’s former vice-president of Marketing for Europe, David Preston. He explains: “Budgets have gradually decreased over the last few years and this year we have seen an aggressive cut of almost 50%. We will be using sponsors for our internal events for the first time this year to reduce costs.”

Global growthFor many event agencies, major growth is predicted to come from acquisitions and expansion into emerging destinations such as Asia and the Middle East, rather than organic growth. Grass Roots Meetings & Events has recently overhauled its strategy in Asia, while Banks Sadler plans to open a new office in the region towards the end of this year.

Cautious optimismA propensity to temper confidence with prudence in 2014 persists, however. Motivcom’s Nigel Cooper states: “Officially, we are cautiously optimistic. Until we get to a point when we are in October and we’ve got the business secured, we have to be.”

Political factors in both the UK and abroad could also determine the industry’s success. Cooper asks: “What if Russia invades Ukraine? Or turns off the gas supply to Europe? There is so much uncertainty around what could happen. There are so many other factors, like the Scottish referendum and general election. The economy is back in quite a reasonable position, but any change in direction could change all that.” &

Varied outlookGrowth remains sector-dependent, however. Luke Flett, head of sales and marketing of Ashfield Meetings & Events, says: “Being specialised in the healthcare sector, we find our clients’ activity and budgets can be very independent from the wider economy. “Their event spend can be dependent on their pipelines – bringing new drugs to the marketplace – and, if they do not have a strong pipeline, the need for events will decrease and this can happen irrespective of the economic climate.”