There's nothing flamboyant about Eric Tumperi, president of Third Millennium Communications (3MC). A 13-year veteran of IBM, where he was a global brand manager for PC Server Services and Support, Tumperi conveys the quiet conservatism of Big Blue, from his button-down shirts to his belief in building a strong management team and unsinkable products for his three-year-old "Internet solutions" company.
With investors throwing money at Internet companies that don't "have real management teams, or even real products and clients," Tumperi says, "we could go public tomorrow, but it wouldn't be wise. We want to be completely solid. We're a normal company in an abnormal industry. . . . We know what if feels like to be real, to be solid."
Third Millennium may be unusually conservative among proliferating Internet companies, but it's pushing into untested waters with the launch this fall of Expo-Exchange 2.0, an updated version of its Internet-based trade show management system, which includes online registration, exhibitor directory, floor plan management, and e-commerce capabilities for exhibitors and attendees.
Several high-profile groups, such as the Technical Association for the Pulp and Paper Industry (TAPPI) and the National Spa and Pool Institute, have used the earlier version of ExpoExchange to set up virtual trade shows to complement their live events. And the Radiological Society of North America, sponsor of the world's largest medical trade show, is one of several associations recently signing on with ExpoExchange for their 1999 expositions.
What's unique about ExpoExchange is its sophisticated electronic commerce component, which several organizations will beta test for the first time this fall. With it, exhibitors can sell product via the Web. And therein lies the pot of gold, for we are now talking about business-to-business electronic commerce, and whenever that subject arises, metaphors begin to fly.
"It's like a freight train headed our way," Tumperi says. "There are still people we meet who don't get it. They haven't had the time to get educated, because they're too busy doing their jobs. Business-to-business e-commerce isn't necessarily something that affects your job at the moment. But some people are going to be asking, 'Why in the world didn't I jump on that train?' "
All Aboard the E-Train Much attention has been paid to the wild success of Amazon.com, eBay, Priceline.com, and other companies that sell products and services to consumers on the Internet. But the real revolution is in businesses selling to each other on the Internet, analysts say.
According to Fortune magazine, more than 90 percent of the predicted $1.4 trillion in Internet commerce will be conducted between businesses. In its cover feature "Internet or Bust" (December 7, 1998), Fortune called the Internet "the foundation of the new industrial order. If you don't have a deep, visceral sense of how radically the Internet is going to change today's industrial order, your [business] is going to lose."
But e-commerce--meaning the managing of business transactions on the Internet--is a broadly used term. At the most basic level, this could mean an attendee or exhibitor registering online for a trade show using a credit card. It may also encompass a scenario where the trade show organizer provides a Web site where exhibitors promote their products, but a phone call or fax needs to be made for the actual sale or order to take place. In the next level of e-commerce, the buyer makes an online purchase of a product or service from an exhibitor using a credit card, but that buyer would be limited to a standard (non-negotiable price) and the credit limit on his or her credit card.
At the most complex level of business-to-business e-commerce, the trade show organizer, for example, provides an online marketplace where vendors promote and sell product to a qualified audience of buyers, with one-to-one pricing, group buying terms, and specialized product terms and ordering policies.
Unlike other online trade show management systems, ExpoExchange 2.0 will perform on all these levels, Tumperi says. He explains why trade show organizers should be interested in e-commerce: "Trade shows are the physical compression of an industry, a place where qualified buyers are brought together with sellers. And virtual shows are the virtual compression of an industry.
"By bringing e-commerce to the virtual show," he continues, "show organizers can make a natural move from fostering the buy/sell relationship to the buy/sell transaction. The show organizer becomes the enabler of the sales activity within a particular industry." Has Tumperi embarked on a pipe dream?
Beware of the Verti-Ports The International Association for Exposition Management doesn't think so. As we went to press, IAEM announced an agreement with 3MC to promote and market ExpoExchange within the trade show industry.
Why is IAEM getting involved with the marketing of a specific product? Association President Steven Hacker, CAE, points to the rising success of vertical ports or "verti-ports" on the Internet: These are Web sites for narrowly defined industries, offering business-to-business information exchange and e-commerce. The best example is VerticalNet.com, a rapidly growing Internet portal for dozens of business fields, including health care, food and packaging, and communications.
Some companies may feel they don't need to exhibit when they can join an electronic community with commerce opportunities, Hacker explains. By offering exhibitors an opportunity to engage in business online, and by stipulating that the opportunity is open only to exhibitors in the live show, the show organizer can both protect the show from defections and provide exhibitors an e-commerce portal, Hacker says.
"Our mission as an organization is to promote the exhibition industry," he says. "Our concern is the rapid growth of these vertical ports. They are new competitive media that threaten trade shows."
Displace Associations? Vertical ports may well go beyond threatening an association's trade show. They have the potential to usurp the fundamental role of associations, says Clare Reagan, CAE, the exhibits sales and marketing manager for TAPPI.
Reagan and her colleagues are concerned about VerticalNet's pulp and paper business community. Reagan says the Web company approached the association about an online alliance, but TAPPI declined.
"I think anyone in association business should be scared to death because these ports are positioning themselves as communities for information exchange and problem solving--and that's the job of associations. We know we can do that better, and we're taking them on."
TAPPI is revamping its Web presence so that it will not be tied so much to an event but will become a year-round electronic community for the paper and pulp industry, Reagan says. And it will be a "significant revenue generator" by the end of the association's fiscal year. The revamped site will have a sophisticated search engine listing vendors in the industry and a digitized library of TAPPI information, among other features.
While Reagan enthusiastically embraces the benefits that ExpoExchange brought to TAPPI '99, allowing the organization, through its virtual trade show, to extend its international reach dramatically, she does not see the organization getting involved in e-commerce on behalf of its members, who encompass a wide range of professionals in the pulp and paper industry.
"When I talked to suppliers they said they didn't want to sell on the Web. Maybe that's because in our industry there is so much customization--it's not like we're selling staples," she says. "They don't want their pricing on the Web."
For the National Spa and Pool Institute, a two-year ExpoExchange client, the opportunity to set up a site with e-commerce capabilities for its members is very attractive, says Molly Finney, director of conventions and administration. NSPI is exploring the possibilities.
"We look at e-commerce as a member service and a good nondues-revenue generator," she says. The association, which has a large international participation, could provide a site for information exchange and business transactions 24 hours a day, seven days a weeks, and would be able to sell its own educational materials and services, she says.
Regarding vendors' concerns about putting pricing up on the Web, "We're very sensitive to that, but if each site is password-protected, I'm not sure it's an issue. We're giving members a marketing choice."
Brian Casey, vice president of convention and trade shows for Chicago-based Smith Bucklin & Associates, shares Reagan's concern over the growing influence of vertical portals on the Internet, but thinks business-to-business e-commerce is a natural step for many associations. Once a vertical port becomes the focal point for buying, selling, and information exchange within an industry or profession, "the association is in great danger of being displaced," he warns. "The association no longer owns brand awareness--or the connecting relationship between buyers and sellers."
Smith Bucklin, with 170 full-service clients, is the country's largest association management firm. "We are aggressively pursuing an alliance with a Web development company that will capitalize on opportunities that Web technology provides and leverages our intellectual capital--everything we know about running associations," Casey says. It will be a system that allows for e-commerce. "Why not go down that path?" he asks.
If the Shoe Fits Tumperi believes that among associations, e-commerce is likely to have the greatest appeal to those representing industries where there is a fragmented distribution system, or small to medium-size retailers that need an expeditious way to buy products and services. For example, in networking electronics, small businesses often have trouble getting their product in front of qualified buyers, he says.
In general, Internet commerce is especially appealing when there is an "inefficient distribution system," Tumperi adds. "That's why in the context of e-commerce the trade show paradigm is so powerful, because it already brings qualified buyers together with vendors. You're not standing in the middle of a cornfield, hoping someone will find you."
The technical challenges of sophisticated business-to-business electronic commerce far exceed those of consumer sales on the Internet, where one price fits all and a simple credit card processing is all that is required. The software program has to be flexible enough to handle volume pricing, special terms and conditions, varying tax rules, and additional payment methods, such as electronic checks.
As an Internet solutions company that has built e-commerce systems for organizations such as BellSouth, and as a company whose virtual trade show clients include three Trade Show 200 expositions (The Clean Show, RSNA show, and SuperCom), Third Millennium is uniquely positioned to deliver an e-commerce solution to the trade show industry, Tumperi believes.
"We've been listening to associations for three years and we found that we need to turnkey the whole experience for them," he says, to provide not only the Web site, but a supporting team, including a marketing partner to sell to exhibitors. (See "About 3MC," page 34). "People are putting things up fast--just to get things under way. But we offer a full-service capability, not just a cold Web site."
Tumperi would not reveal at press time which organizations will be beta testing ExpoExchange 2.0 this fall, but he says the product "is the most strategic thing that our company is doing. If we are really successful it could become 90 percent of our business, but we're proceeding carefully. Everything we do is about being proactive, not reactive."
One thing Tumperi does say without hesitation: Third Millennium will go public next year. Another hot Internet company IPO?
About 3MC and ExpoExchange * Third Millennium, a privately held company specializing in creating Internet solutions for businesses, was founded in August 1996 by Eric Tumperi and Jerry Eickoff. Eickoff cofounded BEI Holdings 20 years ago and helped it become a publicly traded international bank consulting firm. ExpoExchange, Millennium Sites, and Millennium Merchant are three 3MC products.
* The company currently has 100 full-time employees and 80 clients, including The Bankers' Bank, Emory HealthCare, Blooming Cookies, MCI, and BellSouth.
* The cost of licensing ExpoExchange application software for one year, content gathering and loading, and technical support, is $60,000 for shows of up to 500 exhibitors, and more for larger shows.
* The typical fee charged by the client to exhibitors is $600 to $5,000 for e-booth and e-merchant functions, providing full-functioning e-commerce through the ExpoExchange program.
* Exhibitor Visibility Worldwide is the exhibitor marketing company for ExpoExchange. EVW uses telemarketing and direct mail to sell exhibitors ExpoExchange's electronic storefronts, online sponsorship opportunities, and enhanced show Web sites. EVW was founded by Wayne and Linette Atwood, who started Atwood Convention Publishing in 1982 and sold the company in 1996. The use of EVW services is integrated with the ExpoExchange program.
* ExpoExchange clients share a percentage of revenues from both e-booth and e-merchant sales to their exhibitors with Third Millennium and its marketing partners.
* It takes about one to three months to build/upload information for the show site through ExpoExchange, but it takes an exhibitor only an hour or so to input information for its site. An exhibitor can change or modify information to its site at any time from its own computers.
* Planners can change program information at any time from their own computers, and can get updates on who is using the site, who has booked booths, and various other types of reports.
Not Just for Trade Shows SeminarSource.com is a privately held company that completed its initial round of funding with $1 million from private investors in May. The San Diego company offers a suite of convention management services, including online registration using credit cards, online merchandising of convention-related material (such as audiotapes, videos, clothing, and souvenirs), and online broadcasting of educational content--live and on demand.
SeminarSource.com was founded by President Kim T. Folsom. "I've been working in e-commerce for 20 years," she says. "I started SeminarSource.com because planners were telling us that they wanted an easy way for people to register online for their meetings, or to buy their meeting-related products online."
INTERVU Inc., a service provider of Internet audio and video, was issued stock in May as part of the strategic alliance between the two companies, Folsom says. She has been assembling a board of directors that includes Vice Presi-dent of sales Mark Tunney, formerly director of marketing for the Hyatt Regency Chicago. A frequent objection that he addresses in his new sales position when describing the nondues revenue-generating opportunities of SeminarCast, the company's online broadcasts service:
"I'll hear 'We don't want to broadcast our sessions on the Web because we don't want anyone not to come to the meeting,' " he says. "But since only 10 to 15 percent of members typically attend meetings, the broadcast--whether live or on-demand--is really a complement to the live meeting."
The pay-per-viewing of online broadcasts of educational sessions can be a great nondues revenue stream for associations, Folsom says, as can online merchandising. "It's important to get these kinds of solutions up and running at a time when the economy is robust," she adds, "so that they are there when things slow down, and people may not be traveling to meetings the way they are now."