Global Leader Q&A: David Levin

David Levin took over as CEO of United Business Media in April 2005. He went there directly from six years running companies in the telecom sector, but was certainly not new to the business-to-business media world. He previously spent five years with Euromoney Institutional Investor, including a stint as president of Institutional Investor in New York.

So already, he arrived during what many feel is the transformation of a cornerstone B-to-B media company well-informed. What's more, he was ready to make some changes.

In the last two and a half years, UBM has made close to $500 million in acquisitions and launched events of all sizes on four continents. In the last year and a half, the share of the company's earnings related to events has nearly doubled to about 40 percent, surpassing the amount attributed to print.

The healthy bottom line, mergers and launches are the result of a strategy that involves developing audiences in countless industry sectors — then coming up with ways to serve them. In doing so, Levin seems to have found a way to make the online world and events work, while reserving a place for what many consider dwindling opportunities for print.

Levin talked to Tradeshow Week Editor in Chief Michael Hart recently about that strategy, his view of the future of the global tradeshow industry and one of UBM's most novel acquisitions (at least in the eyes of American observers), that of the Comdex brand.

Question: You have said before, "In the virtual world, the value of face-to-face goes up, not down." What did you mean by that?

Answer: The way people's work lives are evolving, they are able to touch virtually their entire working community very frequently and very fast and with great ease through instant messaging, through e-mail. The one thing you can't do is meet. The quality of interaction you get out of a face-to-face encounter is very different and very special.

Q: How does that inform the business of events?

A: What I see evolving is a work pattern that has got a huge amount of e-communication and voice communication packaged through the year. But at certain points in the year, people physically get together to achieve other objectives.

I was recently with the marketing director of one of the very, very big technology clients that we've got. He said, "I love your conferences because, either at the end or the beginning of your conference, I put an international sales meeting together."

That's a great example of this geographically diffuse world working very closely interconnected but having to really ground itself regularly through physical meeting.

Q: You were previously in the media business, then in technology, and now you're back in media. Why the return?

A: This is an area where, if you have a great idea, or you have an idea and you don't know if it's great, you can test it and feel it and make it real remarkably quickly. The market either likes it or doesn't like it, so you know if it's a good idea pretty quickly.

Q: How is that different from the technology sector?

A: In technology, people are incredibly bright, but the cycle times for innovation are very long, and the scale of the teams involved can be very big. Here in the media world, it can be one or two people who can have a good idea. If you want to run an event 15 weeks from now, you can just about do it, depending on how big it is.

Q: United Business Media is one of the B-to-B companies that offers a variety of media to clients in each industry it serves. Not all of your competitors do it the same way. Why do you?

A: There are product companies in the media space who package a product, and they're very good at packaging that product. Sometimes they make a great deal of money at it.

I think, the way our markets are evolving, that's not good enough. You need to think about managing and owning an audience. The minute you think about your database as your core asset, you then start asking, in financial terms, "What's the highest present value for me from that database?"

That will necessarily involve thinking about all the different ways one can approach that audience to create value. If you have a fantastic database in a particular sector, you are evidently leaving money on the table if you only deliver one form of media.

Q: With this in mind, is the conventional tradeshow model changing?

A: The event world breaks down into various models. You have the annual industry gathering at one end of the spectrum, and at the other end of the spectrum you have the topical conference. ... All of them are prospering at this point in the business cycle.

At the bottom end of the spectrum, the conference business, the short cycle, is fine while the economy is rosy, but the minute there's a downturn it's going to have a tough time.

At the other end of the spectrum, these big annual events are becoming more important because of the technology around them. In addition to that event itself, the clever owners of these properties are thinking about how they extend that feeling of being at the X annual meeting, or whatever it is, for the other 360 days.

Q: Is the events industry really becoming a global one? Or are distinct parts of companies simply organizing their own shows in different parts of the world?

A: It's different by competitor, and by industry participant.

We look at our shows as brands, and we have some brands which are global and are globalizing further. In every case, we try and make use of the fact we have an infrastructure in many countries, but we keep the brand ownership very concentrated.

Q: Can you give me an example?

A: We have a very, very important franchise called CPHI, an international show looking at pharmaceutical ingredients. The mother brand runs in Europe annually in the autumn. We've now got CPHI subsidiary shows running in Japan, in China and in India we launched last year. Each one of those shows feeds back to the mother, so we saw for example, after our Indian show, the number of Indian participants booking to come to our mother show in Europe went up, and the number of our European delegates looking to go to India went up. So, we got two-way flow good for both shows.

Q: What's another model?

A: There are other people who run their shows in a completely decentralized way. They treat it more like a franchise than a brand. They give the franchise for Asia to Asia, the franchise for Latin America to Latin America.

I think that's nuts. Over time you lose the integrity of the database, you lose the integrity of the brand, and necessarily these things begin to compete with one another.

Q: Many B-to-B media companies are trying to reach the point where revenue or profit they are losing in print is matched by their growth in other media. Is UBM there?

A: We have reached crossover. Our events in profit terms — not quite yet in revenue — make a much larger contribution to our earnings than our print. Events now probably account for 40 percent of the earnings of this company.

Q: How were you able to do that?

A: We're seeing great growth for our events worldwide, and we're being consistent about that. There are individual print titles that are growing, but the print portfolio as a whole is shrinking.

We saw and continue to see some bits of print are challenged. We have been open and honest and very straight about that. That has led us to, where there were areas of print where we felt were particularly threatened or challenged, we divested or shut them quickly. That was one step.

In the second step, we have through acquisition targeted opportunities in growing spaces and, during the course of the last couple of years, spent probably almost $500 million on acquisitions, which have focused largely on the exhibition space and the online space.

The combination of winnowing out our own portfolio and selling stuff, of buying new stuff and, the last ingredient, of really energizing the company for these international roll-outs, has really contributed.

Q: Do you have more acquisitions planned in the near future?

A: I certainly hope so. We are very acquisitive. We are still looking for great businesses to buy and for partnerships to work with.

That said, I would say there's a word of caution, particularly in the online space where, frankly, I think prices have crossed the bounds of reason. There is significant risk of people overpaying at this point in that online space.

In the exhibition space, you can touch and feel and see cash flow. We are still seeing owners of franchises who are saying, "Wow, you offer us a great opportunity."

Q: When you acquired MediaLive you got the Interop brand, but you also got the well-known Comdex. What, if any, are your plans for it?

A: We paid a dollar for Comdex, but (among) the business we bought out of MediaLive, the largest show in its cluster was Interop ... This has been a phenomenal investment for us.

The event world is driven by teams of small numbers of highly motivated and incredibly dedicated people. We have kept every person from that acquisition. They are excited young people who are energized because they're now playing with a much bigger canvas and much less constraint.

Q: And Comdex?

A: Comdex is a brand, of course, that carries with it a lot of baggage, and that's why it was available for a dollar. While the Comdex brand has phenomenal associations with people who are, let me call it, loosely associated with technology, it does have some challenges with people who are in the heart of technology.

That's the reason why we're 18 months post-purchase and we have not found a way of using it, but we are very conscious and mindful that this is a billion-dollar asset and it's got huge recall.

The Comdex story may not be over yet, but I wouldn't be holding my breath. I'd rather be looking at the great brands that we've got and building out of those.