Four Business-Minded Considerations for Virtual Event Planners
When it comes to virtual events, many associations are running into questions about how to raise revenue from them, according to a Tagoras report. Part of the challenge may be strategy—nearly 60 percent of associations surveyed said they didn’t have one for virtual events.
More than 90 percent of associations say they’re offering virtual events essentially because of COVID-19. How does that change the business approach for what is traditionally a major revenue driver?
It’s one of many questions highlighted in a new report from Tagoras, a consulting firm focused on adult learning. The latest edition of The Virtual Conferences Report, which gains new relevance amid the COVID-19 crisis, touches on three key topics related to virtual events—operations, business, and performance—at a time of unprecedented growth for the event variant.
Case in point: Two thirds of survey respondents say their organizations have never offered a virtual event, but plan to within the next year.
“Clearly current circumstances are driving a major near-term surge in the format,” authors Jeff Cobb and Celisa Steele write.
But given the sudden shift in interest toward virtual events, it’s clear that some business considerations might have been lost along the way. Some business-minded highlights from the report:
Many virtual events struggle with strategy. The report notes that just a fifth (20.7 percent) have a documented strategy for virtual events, while 59.8 percent say they don’t have one, and 19.5 percent aren’t sure either way. The authors diagnose this as something of a missed opportunity. “There are thousands of decisions when it comes to offering a virtual conference—how long should it be, should it be part of your annual conference or its own beast, what should you charge, how do you find sponsors, and so on,” the authors write. “You need a strategy for your virtual conferences so you and others in your organization can translate that strategy into the right answers to the myriad questions.”
Virtual events need to be financially sustainable, but tend to be less expensive than in-person events. Nearly 60 percent of respondents (59.7 percent) stated that it was important for a virtual event to be profitable, while 25.4 percent said such an event needs to at least be self-sustaining. And perhaps for that reason, nearly two thirds of respondents (65.2 percent) charged for such events, compared with 15.2 percent that didn’t. Despite the tendency to charge, virtual events tend to be less expensive than in-person events, with 30.4 percent charging significantly less and 39.1 charging somewhat less.
The calculus of pricing has changed with the pandemic. Despite the general push to make virtual events less expensive, respondents to the survey told Tagoras that some events are not cutting costs compared with in-person events due to the nature of the pandemic, though some are offering different options that make educational resources available to all members, while charging extra for those who can afford a more in-depth approach. “We have heard from many, many of our people who have said their entire training budget has been cut through the end of 2020,” explained Shannon Lockwood, the events and programs manager at the National Institute of Governmental Purchasing. “So we now know that if someone is coming to our event, it’s likely—not just possible but likely—that they’re paying out of their own pocket.”
Sponsorships are more prominent than exhibitor fees in virtual settings—if they’re collected. More than 40 percent of associations haven’t yet monetized sponsorships or exhibitors at prior events, but given the changing environment, demand could rise in the coming years as associations look for new ways to make events profitable. (According to supplemental data from Tagoras, 36.1 percent of respondents expect to integrate a virtual tradeshow component into an upcoming event.) But if they are drawing revenue from vendors, the way to do it most commonly seems to be through sponsorships (31.3 percent), or in tandem with exhibitor fees (20.3 percent). Just 4.7 percent rely on exhibitor fees alone.
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