Last month a trade exhibition rolled into London town so controversial that whether you were involved in the sector in question or not, you’d know about it from picking up a newspaper. The Defence Systems & Equipment International (DSEi), held at the Excel centre for one week from September 11, brought with it 1200 companies from 36 countries, defence ministers and generals from around the world, rocket launchers, tanks and plenty of the more unusual products such as hardshell gliders. This business to business – business to government even – event was strictly by invitation only (although that didn’t stop a few dozen uninvited protesters showing up). And like the unwanted demonstrators, everyday marketing tactics went out of the window too.
Getting people within defence to talk about how they market it to those on ‘the outside’ is difficult. Rather than talk about strategy they skirt around the issue, choosing to carefully point out that the defence industry, like many others, is subject to strict guidelines and policies on what is and isn’t acceptable when it comes to doing business. It is this evasive attitude which lends weight to frequent media reports which talk of rumours of the trade being awash with backhanders and ‘brown envelope’ deals. Most recently, such rumours have been fuelled by stories about BAE, which was the subject of a high profile investigation into whether it has broken anti-corruption laws for alleged improper payments to Saudi officials.
To this end, and despite an impressive number of companies taking part in DSEi 2007, getting most of them to talk openly about their experiences at the event, what they were there to exhibit and to whom, is notoriously difficult. This is a marketing sector like no other; if you’re not part of the clique, you’re not going to stumble across the marketing literature for a lot of these firms; not least because that literature doesn’t really exist. “This is completely different from any other,” says one of the DSEi attendees, who was there to talk to the UK armed forces about his invention, but wasn’t happy to talk to the press about it. “It’s not like we’re marketing pens and paper here, you can’t just pick up the Yellow Pages and find us slap bang in the business section. A lot of the marketing done outside of these trade fairs is based on word of mouth too. If somebody sees your product, sees that others are using it and like it, they come to you.”
What might come as a surprise is that it’s mostly the smaller companies, there to catch the eye of military organisations with their battle zone-friendly offerings, who adopt the most cloak and dagger attitude to their presence at DSEi. Consider this a fact which goes against the principles of marketing. In what other vertical does an SME or micro-organisation actively shun the chance to enthuse about its product or service; spurn the opportunity to shout about how innovative it is? There is an obvious reason for this, says a second exhibitor at the fair who wishes not to be identified, as to why defence marketing takes such a low-key approach. “The industry is one in which it is very difficult to be positive because of the huge amount of cynicism involved,” he says.
Beyond weapons
Of course, it doesn’t take a genius to figure out where this cynicism stems from; this is after all, a fair designed to bring together bomb-makers and those in the market for buying them. Or is it? According to the DSEi’s organisers, only two per cent of those there to exhibit are in the business of manufacturing arms equipment. The rest of the fair is made up of other defence technology displays (from thermal insulation equipment to bomb disposal robots) and products designed to contribute towards humanitarian aide and disaster relief strategies. The latter, in particular, has a bigger presence this year than at any of the three previous DSEi exhibitions. “People like to label this as an arms fair and ignore the positive spin-offs associated with it,” says Alan Lockwood, a spokesman for DSEi 2007. “There is a lot of cutting edge technology and leaders in world design here, and often products that start off with a military purpose end up becoming useful in everyday life – Teflon is one good example.”
Cynicism and secrecy may be the watch words of those on the outside of this controversial trade, but the atmosphere inside the Excel arena is acutely juxtaposed. It looks a bit like a toy store for grown-ups, the mostly male audience cooing over gadgets and gizmos, various world armies in attendance dressed in their battle gear and staged around real life tanks and missiles, exported in especially for the week. But peel away the Action Man movie style gloss, and you’re left with a place where some of the world’s most serious networking takes place. “These things are phenomenally well attended and where business is done like in no other industry I know,” says Sean Feast, director at marketing communications agency AGA Group and a long time attendee of defence exhibitions. “In terms of the number of business leads generated, few event types are more genuine. This isn’t a mass market where you get companies doing direct mail campaigns that say ‘come and see our stand’. The industry is far too big for that. This is a place where you know who is going to be there and who you’re there to target.”
So if defence marketers aren’t busy prepping their key audiences via traditional marketing mediums such as direct mail, what are they doing? According to Feast, it’s all about rubbing shoulders to generate leads. “Never underestimate the partnership approach to marketing in this sector,” continues Feast. “The big companies are there targeting key influencers and government agencies in an attempt to partner with them and get them to endorse their products and services so that they end up with high level marketing support.”
Battle tactics for SMEs
A case in point would be BAE, in attendance at this year’s DSEi fair to exhibit a cross-section of its capabilities, with equipment designed to deliver technology and solutions for the UK Ministry of Defence.
But what tactics do the smaller businesses, who turn up without the weight of a well-known brand name, or high-profile endorsement, employ to get themselves noticed? “If you’re a small defence company looking to market your equipment to a wide audience, trying to get that customer to come to you is difficult,” says Lockwood. “But the point of these fairs is that customers turning up to visit three or four companies are likely to see you, so you rely partly on catching passing trade.” And for the cynics who think this sounds like a wishy-washy way of hoping to attract attention, take into account one of this year’s most well publicised success stories from DSEi. A start-up inventor who developed a water bottle with a built-in filter to purify contaminated water generated not only huge interest from the event’s visitors, but also from the attending press, who were quick to cotton onto the fact that this was an example of a non-combat orientated product on display. Not bad for an invention born in a garden shed in Norwich.
For the already established organisiations though, the point of the DSEi fair is to create leads and awareness, and build relationships rather than go chequebook hunting. “Nothing is ever finalised at these things,” a BAE spokesman reveals. “Nobody buys a multi-million pound machine just because they’ve seen it.”
Pressure from the ranks
One company that is clearly feeling tainted this year is the event’s organiser, FTSE 100 company Reed Elsevier. Despite this year’s event being the biggest yet, generating a reported £25 million, Reed has decided its association with such a volatile industry is not good PR.
Alistair Gornall, chief executive of Reed Exhibitions, confirms that pressure from some of its key investors is forcing it to sell up this year. “A substantial chunk of our global revenues comes from healthcare and research markets and they are increasingly concerned about our involvement in the defence industry so we have taken the decision to exit the market.” This, despite the fact the event has grown some 20 per cent on the previous one held in 2005 – a figure which Gornall puts down to ‘superb marketing’ as well as a growing global interest in defence technology. There is an obvious pointer towards Reed’s success too; when it took over the event from previous owners Spearhead (a UK-based firm) it used its leverage as a global company to improve the communications strategy to delegates in the lead up to the event itself. “It’s been about operating a global operations and sales perspective,” says Gornall. “We do a whole raft of things to promote the event; we’re mainly research-led and compile reports and analyses to assess where market growth is, we hire people from within the industry and we visit every defence show in the world, some of which we own and therefore see the right people within the market place. We match all of this up with really good, focused communications planning, which sell the benefits of the show.”
Before the year is out, Reed wants to rid itself of DSEi and it is looking at a shortlist of “around five” interested parties, says Gornall. One has already been confirmed in press reports as Phil Soar, former chief of exhibition organiser Blenheim, who has made a bid thought to be up to £50 million, although Soar declined to confirm this sum.
So, what is the future of the event and its audience, forever the subject of whispers over bribery and backhanders? According to BAE, negative comments are part of the job. Has its presence this year been marred by the fact it is the subject of an anti-corruption probe by the US Department of Justice? “It’s difficult to go into details on allegations, but it hasn’t affected our presence,” says its spokesperson.
The next show in 2009 will see a new owner, but with delegates of the same ilk – ministers of defence, government officials and companies keen to sell to them. “I don’t know how much bigger it can get, but we want to emphasise it isn’t only about marketing arms equipment,” says Lockwood. “It is a diverse sector and defence companies are always looking at new avenues; in particular we’re seeing a rise in technology associated with areas such as disaster planning.” Meanwhile, companies worldwide continue to come up with new technologies suitable for a military audience and plan marketing strategies around them. Just don’t expect many of them to appear on a full page ad or at an outdoor site near you soon.
