Dmexco Future Murky In Wake Of Founder Fallout

Frank Schneider (L) and Christian Muche (R) with Stewart Copeland of The Police at the DMEXCO 2017 VIP party. Credit: DMEXCO

Will Dmexco become a no-go?

Late last week, the organizers of the Digital Marketing Exposition & Conference (Dmexco) in Germany abruptly severed ties with the show’s two co-founders, Christian Muche and Frank Schneider, sparking concerns over Dmexco’s future.

Reports alleged that Dmexco’s organizer and the event’s trademark holders had parted ways with Muche and Schneider’s consulting firm KM Digital Marketing Events GmbH over a violation of “substantial contractual agreements.”

But in an interview this week with AdExchanger, Muche claimed the allegations are unfounded.

“The first we heard of this was when the public announcement came out on the second of November, when [Koelnmesse] said they would extend the contract with the national association BVDW and just one sentence saying they will cancel our nine-year contract,” he said.

Koelnmesse is the German government-backed entity that coordinates Dmexco, and the Bundesverband Digitale Wirtschaft (that’s the German Association for the Digital Economy, for those who don’t speak German), or BVDW, holds the trademark on the show.

Muche and Schneider’s consultancy had been under a nine-year contract with Koelnmesse through the 2018 Dmexco show, which takes place every September in Cologne. 

Muche insisted there’s been no wrongdoing and he’s puzzled by the sudden cold shoulder.

“To make one thing 100% clear, there is no breach of any contractual obligation and, therefore, this is now a legal case as the legal reason for the action by Koelnmesse is still unclear to us,” he said. “We haven’t breached anything and we don’t accept this.”

Koelnmesse declined comment beyond its original statements, which were void of detail other than a promise not to “neglect” the German market with the event going forward.

When asked if the firing of Muche and Schneider would make the show more insular, a spokesman for BVDW claimed that would not be the case.

“Dmexco stays the most important global event for digital business, international and national,” BVDW spokesman Daniel Borchers wrote in an email. “We will continue to respect the needs of the German industry, just as we already did in 2017. Reducing a focus in any direction is not intended.”

When Dmexco 2017 came to a close in September, Muche and Schneider had been discussing next year’s show with Koelnmesse, which they claim resulted in a signed letter of intent.

Although a letter of intent is not an official contract, KM Digital Marketing and Events had drafted the early terms of an agreement with Koelnmesse and were under the impression they would help develop the 2018 Dmexco platform – and perhaps beyond. (The parties also discussed strategies to expand the show internationally following this year’s show.)

The collaborative planning wheels were turning – which is why Dmexco’s co-founders were dumbfounded when Koelnmesse revealed its plans to sever their contract.

“It is hard to understand why they made such a decision and didn´t talk to us because we obviously did our job, not just in terms of numbers and growth, but also in terms of reputation,” Muche said. “Dmexco, now after a couple of years, is seen as one of the global tentpoles for all major brands.”

Dmexco’s Global Gravitas

With Dmexco’s future now unclear, the question becomes: Will Koelnmesse and BVDW still be able to attract global marketing budgets?

Muche and Schneider were skilled at winning the minds (and dollars) of global media brands outside of Germany and Europe. Dmexco’s organizers will need to find someone who can do the same.

One senior US media executive warns that Dmexco’s split with its popular co-founders “will have a major impact on the international and US participation in the conference.”

But some, like David Hertog, EVP of marketing at Rubicon Project, are taking a wait-and-see approach.

"We’re believers in Dmexco and [2017] was particularly productive for us, so of course any rumors of big changes give us pause,” Hertog said. “[But] we’re not rushing to judgment. I don’t see a reason why a show of this size can’t accommodate [a German focus] while maintaining its global point of view. Our plan right now is to invest as usual in 2018 and reassess from there.”

Some ad tech companies, like the Danish ad tech firm Adform, are big investors in Dmexco and they’re not ready to make any snap judgments just yet.

This year, Adform sent 72 people to the event and CRO Jay Stevens doesn’t see the company deviating from that strategy.

“For us, it’s an absolutely critical event and a real central gathering point for European constituents and stakeholders in the digital marketing game,” he said.

Even so, Stevens acknowledged that the unexpected firing of Muche and Schneider could create tension for Dmexco’s future relations with its international constituents.

“The real loss for Dmexco is the fact that Christian [Muche] and Frank [Schneider] have been the face of the show since its inception and tirelessly worked the last five years building something that started off as a small show in Dusseldorf into a behemoth,” Stevens said. “They were the evangelists for making this event truly global in nature.

In its original statement, Koelnmesse appeared to place little stock in the value brought by Muche and Schneider, claiming that their responsibilities would be assigned elsewhere.

But Dmexco is a relationship-driven business. And Muche and Schneider have an extensive global network, which isn’t easily replicable without the right Rolodex.

“To be successful, [Koelnmesse has] got to ensure they have a core team of people who are building relationships at the global level to ensure this stays on the radar as a tentpole event in everyone’s conference diary,” Stevens said. “The mandate for Dmexco now is to continue the evangelism Christian and Frank started.”

Exhibitor Exits

But some international exhibitors, like Nielsen, for example, had been pulling back on their investment in the show already, and say that would have happened with or without Dmexco’s recent leadership dramas.

To maintain a large show floor presence, companies can spend anywhere from a couple of thousand dollars to more than $1 million.

“Dmexco was on our big event radar precisely because it evolved beyond simply a regional event and [because] you get decision-makers from around the world in one place at one time, which is how global business gets done more quickly and effectively,” said Brett House, VP of global product marketing for Nielsen Marketing Cloud.

But great networking opportunities aren’t necessarily enough to overcome the logistical challenges that many exhibitors want addressed.

Although House said Nielsen generates “a significant number of meetings each year, the event has clearly outgrown Cologne.”

“This particular development [with Muche and Schneider] hasn’t changed our consideration about future event investment – we decided that a year ago,” he said. “We simply couldn't justify the expense associated with building out a massive booth presence for what is essentially a day-and-a-half event.”

 

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