They had been told he would appear via satellite--the rumor was his wife was about to give birth. So when Apple Computer's interim CEO Steven P. Jobs strode on stage to deliver the keynote address at MacWorld Expo in New York City on July 8, the surprised and delighted Mac faithful gave him a standing ovation. Steve Jobs, live (and straight off a red-eye flight from the Coast), had come to tell them that Apple still lives.
"All I heard a year ago," he recalled, "was that Apple is dying, Apple is dead, Apple is in a death spiral." But for the next two hours, Jobs, Phil Schiller, Apple's vice president of worldwide product marketing, and executives from two of Apple's key partners--Disney Online and Microsoft's Mac Business Unit--spelled out what they had done to revive the company, and how they would continue to do so, with hot new products and powerful alliances.
Where does MacWorld fit into this picture?
"MacWorld is a tremendous marketing platform twice a year to showcase products and let customers know Apple's strategy," says show director Rob Scheschareg. "We get [Apple's] input on the show direction and strategy, and work with them on their marketing message."
On paper, at least, MacWorld is not Apple's show. It is owned by IDG World Expo, Framingham, Mass., and managed by an affiliate, IDG Expo Management, Norwood, Mass., Scheschareg's company. IDG Expo's predecessor company, Mitch Hall Associates, launched the show in Boston in 1985. Apple is one among many exhibitors at MacWorld. But it is "the largest and most influential" exhibitor, says Scheschareg. "We treat them more as a partner." Simply put, this is a Mac show, and Cupertino, Calif.-based Apple is the only company that makes Macs.
Send Out the Clones No Apple, no MacWorld Expo. Tailoring the July show to Apple's strategy required some major adjustments, however. When Apple revoked the licenses of the Mac clone-makers, IDG suddenly lost three key exhibitors--Power Computing, Motorola, and Umax--which had accounted for some 10,000 square feet of the 100,000 square feet of exhibit space at the 1997 summer show in Boston. The exhibitors that sold peripherals for the clones were also out. To maintain its profitability, IDG had to replace those lost exhibitors. Meanwhile, the decline in Mac users had reduced the potential MacWorld audience.
"If you're under pressure, you can't stand still," says Paul Paget, Jr., 44, vice president of sales and marketing at IDG Expo Management. "We had two options--change the nature of the event or move the show. We did both." Fortunately, Apple had redirected its marketing efforts in ways that offered IDG new opportunities.
"Last year, in Boston, Jobs reaffirmed the company's commitment to the creative and educational markets," adds Paget. "Depending on the category--Web page designers, videographers, and so on--New York has four to nine times as many creative professionals as Boston. New York was a ready-made market that would give us a way to expand the show." In fact, 30 to 40 companies with products for the creative market came into the New York show, he says. To highlight that market, IDG added to the show name the tag line "the Creative World."
"The education market in New York is very strong," Paget continues. "The entire New York City public school system is on Macs." To attract educators, IDG expanded MacWorld's "Education District," where exhibitors display software, Internet tools, curriculum-building solutions, and multimedia for schools, training, and home learning. "We added a learning center to allow for 45-minute product demos," says Scheschareg. "And we invited 500 teachers and district-level administrators to attend on an Educators' Day."
Playing Games With Consumers In addition to the creative and educational users, there was also a new push into the consumer market, which Apple had largely created in the mid-1980s but had begun to lose. "Consumers are not defecting significantly," Jobs told the keynote audience. "But they're not upgrading. Because Apple didn't have a compelling consumer product under $2,000, it appeared we were walking away from the consumer market." To turn things around, he said, "We set out to develop a kick-ass product." The result, the $1,299 iMac, with a space-age design, 233 MHz processor, and 56K modem, was unveiled at MacWorld Expo and went on sale on August 15.
Knowing that Apple was courting consumers, Scheschareg, 30, who was directing his first show, created two new attractions for them. One was Content@Home, a pavilion featuring consumer applications and digital entertainment. "Content@Home was very successful at attracting new exhibitors," says Scheschareg. But the really big draw for consumers was the Gaming Environment exhibit area and the First National Macintosh Gaming Championship. The announcement during the keynote that "Mac games will be a key focus this year" had produced one of the loudest bursts of applause.
At the show, attendees could play the latest games on state-of-the-art Macs. And they could enter as many championship tournaments as they liked at no cost, competing for software and other specialty items. Paget explains why games are serious business. "To run a game well, a computer needs a lot of cool power, video, and sound. Games are an indication of whether people think your platform is good."
While these changes were occurring on the exhibit floor, the conference program was being revamped to upgrade the audience. MacWorld Expo has always been a hybrid, Scheschareg says. Professionals and consumers alike come to see new products and to take advantage of at-show discounts. One New York City retailer, DataVision Computer Video, had a truck trailer on the exhibit floor and was doing a brisk business in "deals on wheels," selling computers, peripherals, software, and accessories. "Because we're not trade only, some people perceive that it's a consumer show," says Scheschareg. "That's why it's important to offer clear professional value in the conference program. The conference helps drive the show and the level of attendees."
MacWorld Expo always had a user conference. But last summer, surveys of present and past attendees, exhibitors, and people who had expressed interest in attending all produced the same request, Scheschareg says: "Can we raise the professional bar?" In response, IDG had introduced the MacWorld/Pro conference in San Francisco last January. It was so well received that it was offered again in New York City, targeting professionals in new media, advertising, publishing, and entertainment. New to New York were 11 intensive, seven-hour workshops held the day before the show opened. Meanwhile, the user conference was retained.
Word-of-Mouth and 100 Full-Page Ads New location, new target audiences, new exhibit areas, new conference programs: It takes heavy preshow promotion to communicate all those messages. "When you go into a new market, you can't just drop the show into a major facility," says Paget. "You need to infiltrate the constituencies in that marketplace. The New York Mac market is concentrated in certain locations and industries--the New York Mac Users Group, Silicon Alley [New York's high-tech neighborhood], Apple's key accounts. The most powerful marketing of all is word of mouth. That means Paul and Rob made many trips to New York.
"In a new city, mailings to alumni [past attendees] won't yield the same results," Paget continues. "So you must get in front of new prospects." IDG ran nearly 100 full-page color ads in some 30 publications, including not only the usual suspects like MacWorld and MacWeek (which are published by another IDG affiliate and sponsor MacWorld Expo) but also the New York City-focused Silicon Alley Reporter. There was a newspaper advertising promotion with retailer J&R Computer World, one of New York City's largest Mac dealers. J&R offered both in-store and at-show specials, and ran a complimentary shuttle bus between its downtown store and the Javits Convention Center during the show. There were also commercials on local radio stations.
The MacWorld Web site was a major promotional channel. "Mac users are heavy Web users," says Paget. "Our marketing is increasingly Web-based." Even with all these new marketing channels, direct mail remained important. Past attendees were targeted, and IDG also used its own lists and selected lists from industry publications.
Quality Not Quantity Because of the potential new attendees, "Most of our exhibitors wanted to go to New York," says Paget. The Jacob K. Javits Convention Center had good dates available--just six months opposite the January MacWorld Expo in San Francisco. And the 760,000-square-foot Javits could easily accommodate the entire show. In Boston, exhibits had to be split between two facilities, Bayside Expo Center and the World Trade Center, separated by a lengthy shuttle-bus ride. Conferences and keynotes were dispersed throughout the city.
True, New York City would be more expensive than Boston. But most of the exhibitors had been to New York City before and knew what to expect, Paget says. To ease the transition, IDG charged the same booth space rate in New York City that it had charged in Boston, even though costs rose.
How well did it all work? Although exhibit space totaled only 80,000 square feet, the important players were there, says Scheschareg. "Intuit had said it would not write future versions of Quicken for the Mac. But it is recommitted, and was in the show. Adobe, Microsoft, Avid Technology, and FileMaker were there--that speaks volumes."
New York City attendance, at 34,200, was substantially below Boston's 49,700. "The reason we moved was for the type of audience," says Paget. "We added higher end, more expensive conference programs. One of the risks we took was whether the more qualified audience would spend more to attend. We hit a home run. We moved the event and increased our attendee revenues." Early registration rates began at $175 for the user conference, rose to $795 for MacWorld/Pro, and topped out at $1,095 for the full program.
Back to Boston, for Now Nonetheless, MacWorld Expo will return to Boston in 1999. The reason, say organizers, is the Javits didn't have the space and dates. Boston did, and its logistical problem has been solved. The recent opening of the Seaport Hotel at the World Trade Center means adequate space is available in two neighboring facilities. "We're leaving the door wide open to go back to New York in the year 2000," Paget says. "Now that we have an audience there, we could go back and forth between the two cities. What's most important to us is to maintain and hopefully grow a very strong MacWorld Expo in the Northeast corridor."
Ever the erudite wise guy, Apple's interim CEO Steve Jobs used psychologist Abraham Maslow's "Hierarchy of Needs" as the model for his keynote address at the MacWorld Expo. Maslow's hierarchy progresses from food/clothing/ shelter to safety, love, esteem, and self-actualization. The Jobs version was "Apple's Hierarchy of Skepticism." Each time Apple has responded to a question from its critics, Jobs explained, the criticism has moved up another level:
1. Survival. Critics' first question was basic: Can Apple survive? The combination of a new management team, a new board of directors, and the alliance with Microsoft "convinced people that survival was not an issue," said Jobs.
2. Stability. "But there's no stable business in the Mac market" was the next plaint. Apple's response was to produce profits. Jobs promised that Apple would soon announce its third profitable quarter in a row under the new management team. One week later, it did: $101 million.
3. Product strategy. Critics thought there wasn't one because "we didn't talk about it," Jobs maintained. Of course, another reason could have been an unfocused product line, which Jobs described as "15 product platforms and a zillion variants--I couldn't even figure it out myself." The new line consists of a mere four products, one desktop model and one portable each for professionals and consumers. All but the consumer portable have been unveiled.
4. Applications. "We rolled out our product strategy on May 6," said Jobs, "and one day later, we heard the next level: 'Are you going to have the applications?' " In the 63 days since, he said, more than 177 applications have been announced--from Microsoft, Adobe, and Disney, among others.
5. Growth. The consumer market is where Apple has declined, and where it will now grow, said Jobs, thanks to the sleek, speedy, simple-to-use new iMac. "This all translates into growth for Apple, the Mac, and its developers," said Jobs. If it works, it should also mean growth for MacWorld Expo.
Internet No Sweat at Javits A fiber-optic cable spine links the Jacob Javits Center to the outside world through Bell Atlantic and Teleport Communications Group (TCG). Show organizers have only to choose the interface that connects one of these communications vendors to the fiber spine. From the cable system, a three-strand fiber connects to one of several switching hubs strategically located around the building. These in turn connect category 5 lines to however many drops are involved.
At MacWorld, for example, there were 45 drops for exhibitors who needed Internet connections and the 80 exhibitors who had signed up for pavilion packages, which included Internet connectivity along with electricity and a table and chair. ShowDigital, a New York-based communications vendor, installed a network of four T-1 lines to handle the MacWorld pavilions. "Javits is very easy to do," says Bob Wolff, ShowDigital's director of shows. "It has a nice infrastructure of wiring. The Javits people got everything up and running quickly."