Tuesday, October 27, 2009

Hybrid Events — What is the Revenue Model?

In August I published an article entitled “Hybrid Events — Whats All the Buzz?”  Interestingly that article generated more interest than any I have written since I started this blog in April.  The concept of incorporating Hybrid events into conferences is gaining a lot of traction across the Meetings and Events industry.silverdollar

In the right context adding virtual components to Face2Face Meetings yields value to all concerned.  Unfortunately the formula for monetizing  that “added value” is not certain.  I have studied this issue extensively and had numerous conversations with social media colleagues.  From those discussions here is some insight regarding what to consider when adding virtual components to your events:

  • What are your objectives? — This is a really important question to address prior to developing a revenue model.  Some of the reasons  for adding virtual components are —
    • Portions of desired audience are geographically challenged and not able to attend event face2face.
    • Some potential attendees do not have the financial resources to attend the event (registration fees, travel expense, etc.)
    • The organization wants to extend the reach of the event to other regions (domestic or International) and develop new, but unfamiliar markets.
    • The meeting is internal and face2face interaction is not critical to a successful outcome… company seeking to save expense.
    • Nature of the event, or content lends itself to a virtual component.
  • Does the event have unique content? — Event professionals should evaluate whether the content being delivered at their event is unique and compelling.  This is especially important because virtual attendees will not benefit from the other typical elements of a live face2face experience.  (i.e. Networking, socializing) With so many educational opportunities available in cyberspace at “no charge” attendees will most likely not be willing to pay a fee for virtual access to a session, unless the material is not widely available elsewhere.
  • Are there typically Event Sponsors? — If your organization’s meeting typically has a sponsor(s) then you may have a strong value proposition for them to financially support the event.  When properly promoted Hybrid meetings consistently extend the marketing reach of an event for an organization.  The subsequent additional “leads” generated by the virtual component clearly provide additional measurable ROI for event sponsors.
  • Survey Your Attendee-base — I highly recommend sending your potential participants a brief survey, to allow them to weigh in on what price point they are willing to pay for virtual participation.  Doing this will at least give you an idea of the sensitivity level of this issue within your community.Revenue Model Cartoon

The real struggle is to determine what fee, if any, to charge virtual attendees for an event.  In my book the road to success with most virtual  events is paved by funding them with sponsorships.  If acquiring sufficient sponsorship dollars to recover your event costs is a challenge, then a compromise may be to charge a slight fee to attendees, in addition to the sponsorships obtained,  to manage the expense.

If your organization is in the fortunate situation of owning and providing content that is truly cutting-edge and value-rich, then you may have a strong case for collecting a significant fee from attendees.

Question — Has your organization developed a successful pricing model for its virtual event services?  In your experience what did not work well?  We would love to hear about your experiences!!

Follow Michael McCurry on Twitter

{ 17 comments… read them below or add one }

Jeff Hurt October 27, 2009 at 12:58 pm

Michael:

Thanks for the timely post and good points to consider.

I submit that asking what price point the virtual experience should be for the attendees is the wrong question to ask, especially when starting to design any face-to-face or virtual experience.

I think the starting questions should be:
1) What value and engagement is the virtual experience bringing to the table?
2) What’s in the best interest of our current and potential customers?
3) What’s our real reason for wanting a hybrid or virtual experience?
These are all similar to those you listed in the objectives.

It’s not about what’s in the best interest of the organization, a way to minimize lost revenue from the face-to-face, or a new revenue stream. Those thoughts are indicative of an organization driven by a need for more money, wanting to nickel and dime its customers, and one that is already struggling with making profits. Those are also the thoughts of organizations holding face-to-face meeting strictly to make revenue and without any real strategic goals. The focus should be on the attendee or member-driven experience from the beginning, not monetizing and commoditizing customer experiences whether face-to-face or virtual.

What about seeing the virtual or hybrid experience as:
A) One of the organization’s marketing strategies
B) Part of the customer/membership retention program
C) A way to show customer appreciation
D) Part of the membership benefits
E) Or even a value add-on.
Then the organization underwrites any expenses related to the virtual experience just like they would direct marketing pieces, a velvet rope eCommunity or their own website. It’s part of the company’s operating expenses. And, the organization would seek a low-cost expense related to providing the virtual experience too, especially if they are underwriting it.

Starting with “how do we make money from our hybrid or virtual experience” is the wrong reason to hold one in the first place. And, your attendees, whether virtual or face-to-face, will call you out for that one.

Reply

Michael M McCurry CMP October 27, 2009 at 5:09 pm

@Jeff Hurt,

Jeff,

Thanks so much for adding to the conversation and your perspective is always respected and appreciated!

While I agree with many of the comments you made in your response I believe it is important to call out the following:

• As far as I know there is not a “one size fits all” business model for hybrid meetings and events. The reality is what may be an optimal approach for one organization may be imprudent or off-target for another.
• While some organizations (i.e. associations) may strategically decide to offer virtual content free to their attendees, others (i.e. Corporate) may choose to charge a fee for it. Only time will tell if those respective entities made the right decision.
• The point of my article is to do the research to understand what your customers want, design a hybrid program that addresses those needs, and create a business strategy that will sustain those customer relationships as well as preserve the financial health of the organization.
• For some businesses sponsorships are the viable way to underwrite expenses and create operating revenue, while some others may choose to attach a fee to the experience in order to help balance the books. Yet some others may leverage a combination of both concepts.
• If an organization is in the fortunate situation where its virtual content is uniquely compelling, cutting-edge and not available elsewhere, then it may be able to create a profitable revenue stream from these type of ventures.

Anyone with any business sense at all understands that keeping “existing customers” is paramount to a successful business. I couldn’t agree with you more that businesses making a “knee-jerk” pricing decision to charge for virtual content as a means to counteract lagging profits, rising expenses or poor business decisions is “off the mark.”

The focus should be on carefully balancing the perceived needs of the organization’s customers with its business objectives.

I think surveying customers is a productive way to:
1. gauge interest in virtual content delivery
2. understand their sensitivity to potential fees

At the very least customers will appreciate that you cared enough to ask them for their opinion. If an organization instead enters this “hybrid world” blindly, with no information or understanding of customer perception, they will be called out!!!

@michaelmccurry

Reply

Dave Lutz October 28, 2009 at 9:41 am

Mike, I think the other big question for event organizers to determine is whether or not the virtual offering will cannibalize the face2face experience. If the speakers/presenters are too focused on the virtual participants, will it detract from those attending in person? Also, will the in person, paying participants feel like they are getting their money’s worth vs. the virtual offering?

I submit that if you are doing Hybrid events you’re walking a fine line. For virtual participants, you want to give them just enough to feel like they are missing something by not being there live, but not enough to make them think that they can continue to get your best by participating virtually. Makes sense?

Dave Lutz – @velchain
Velvet Chainsaw Consulting

Reply

Michael M McCurry CMP November 2, 2009 at 9:10 am

@Dave Lutz,

You raise some good points here Dave.

I think one of the major benefits to a Hybrid event is its ability to build a broader sense of community across an organization’s program. While event organizers should be mindful of the timing of their marketing plan for rolling out all components of the event, I believe fear of it being cannibalized is simply unfounded.

One of the objectives of introducing a virtual component to an event may be to create buzz or interest in the live piece, but it is not the only reason by any means. Membership or customer value, particularly in a tough economy, is one of the major drawing cards.

Virtual components will in most cases never replace the networking value and human touch of a face2face event, but they do allow an organization to reach attendees they otherwise would never touch.

Thanks for your contribution to this discussion!

@michaelmccurry

Reply

James Galindo October 29, 2009 at 12:24 pm

I think Dave makes some good points. IMO I believe the F2F will always be the driving force for any event and “virtual events” will never replace them. There can be a case made for the virtual content “cannibalizing” the physical show but what we’ve done at MyBoothSpace.com is find that sweet spot of allowing attendees to “taste” just enough to get them through the door. Plus, we’ve built incentives (Online Coupons, Online Promotions, etc.) into our product that allows each exhibitor to entice the attendees to the show and more specifically into their booth.

Unfortunately, the genie has been released from the bottle (Google, ZoHo, Yahoo!, countless others) and you won’t get attendees to “pay” for virtual content anytime soon. Our plan is to allow the exhibitors to “push” or market the show for event organizers by giving them just the right amount of tools so they become show evangelists.

We’ve also got some really cool stuff for V2 coming out in Jan 2010 so be on the look out!

James Galindo
MyBoothSpace.com

Reply

Michael M McCurry CMP November 2, 2009 at 9:15 am

@James Galindo,

Thanks so much for your comments, they are much appreciated!

I think “never” is an awfully big word. There may be some contexts where virtual events will in fact replace F2F contact. For example an internal training event, where material is being delivered in a lecture format, with little or no interaction required. That type of delivery system could save an organization thousands of dollars, which could be spent on more value rich F2F events.

I absolutely agree with you that attendees will pay for virtual content, in many cases, especially if the content being delivered is widely available, at no charge elsewhere.

Your idea with exhibitors is highly intriguing.. would love to see a blog article expanding the concept??

Thanks again James for your contributions to the discussion!

@michaelmccurry

Reply

Cece Salomon-Lee October 29, 2009 at 1:41 pm

Hi Michael,

Love your thoughts on this topic. I think Cisco has written a lot about their approach to Cisco Live on their blog. Cisco Live has an in-person component with a virtual event to complement. They approached the question about pay or not pay for attendees in an interesting way – free for some content and general ability to network and find informaton; pay to access really deep educational content.

Another point to consider is how many people who normally wouldn’t attend the physical, whether for cost or time reasons, are now being exposed to your content because of the virtual version? In the case of Cisco Live, they found that 55% were first time attendees and 34% were likely to attend the physical event next year! Check out the results here.

As this model becomes more prevalent, I think we’ll no longer be asking how and if one should add a virtual component. Rather, we’ll say “come to our physical or virtual event” =)

Thanks again for your in-depth look on this topic,
Cece

Reply

Cece Salomon-Lee October 29, 2009 at 1:42 pm

@Cece Salomon-Lee, To clarify, the results are from Cisco Live Virtual. Thanks!

Reply

Michael M McCurry CMP November 2, 2009 at 9:22 am

@Cece Salomon-Lee,

Some excellent points here… depending on what the organizational objectives are for their events.

My question is, for Cisco, is their “really deep content” unique or compelling, because in my mind, if it isn’t I think they will have trouble selling attendees on the concept of paying for it??

Your next point is absolutely solid. An extremely compelling reason for adding a virtual component to an event is its ability to extend the marketing reach of the content.

With a PCMA event we did in September we rolled out a webcast with Twitter feed, and more than doubled our audience with participants across 25 states from NYC to Hawaii… that is pretty convincing eh?

Inevitably, the Hybrid event model is here to stay, in whatever format, and I think the next twelve months will reveal a significantly increased interest from organizations in embracing this concept and deploy it across their events portfolio.

Thanks Cece for the participation in this discussion!

@michaelmccurry

Reply

Karen Harris November 1, 2009 at 1:06 pm

I’ve attended 2 industry events this year where a virtual component was included and in my opinion this will become the norm. Since I manage speakers, I’m going to as a slightly different question but it’s still a relevant one:).

If a corporation or association is going to run both a F2F and virtual component, should speakers be compensated for the latter as well as their live presentation?

Yes, the virtual component ups the exposure element for the speaker and will hopefully produce revenue because of it. But, at this point in time, the speaker’s presentation is still their intellectual property (with social networking growing, that may get somewhat diluted in time). Since that content is going to be virtually distributed, shouldn’t there be some additional compensation to the speaker?

If speakers begin to ask for compensation on the virtual component, this may necessitate some form of payment structure for all or some of the virtual components as Cece refers to re Cisco.

Looking forward to more thoughts, Karen

Reply

Michael M McCurry CMP November 2, 2009 at 9:31 am

@Karen Harris,

Wow, Karen, you raise some really interesting questions here!!

I guess my gut reaction is while an organization may have both virtual and live components to an event, it is still one event, not two, it just has expanded delivery channels. It also requires a slightly different skillset from speakers.

Midori Connolly, from Pulse Staging & Events wrote a great article on this subject at her blog. I think the compensation question is more driven by the market, than it is based upon “entitlements” from expanded distribution channels. One could argue the speaker is getting a benefit by increased exposure from the event’s reach.

I would love to hear other opinions from other event professionsals on this subject… it may be a great subject for a follow up blog article.

Thanks for contributing, Karen, to this discussion!

@michaelmccurry

Reply

James Galindo November 3, 2009 at 3:30 pm

Thanks again Michael for the starting this topic. I would love to expand on my thoughts on these “hybrid” events which interestingly enough have been around for over 10 years! I guess my “never” statement came from my hope that we don’t fool ourselves into thinking that events such as Expos and Trade Shows will ever be accepted as a “virtual only” events.

I agree, other events such as training sessions and conferences could easily go to a full virtual model and save tons of money. Our goal @ MyBoothSpace.com is to make the instant connection between a physical show and virtual (I hate that word actually) show seamless and less confusing. Our unique approach is to use the event map as the common ground for both…it just makes sense. Back end metrics are also a driving factor for most event organizers we have spoken to…there is just no ONE good way to determine ROI on a physical event like there is for a digital event, that’s where our product shines. MyBoothSpace allows everyone to see exactly how well a show performs all the way around.

Maybe we can have a follow up blog article for an even deeper discussion on the subject. Thanks again!

Reply

Sam Smith November 3, 2009 at 7:13 pm

Hi Mike,

Great post – lots of excellent discussion. Though I want to ask this question: Under what conditions would it make sense to charge attendees?

Some of the criteria that I came up with were:
> When your event is sold out.
> Your community is distributed around the world.
> When you have a community that is much larger than the event.
> When the event is a “pilgrimage” type of event like – TED, BlizzardCon, MacWorld, World Economic Forum, etc.
> When your event community is passionate.
> Your Audience’s Social Technographs Profile (see Groundswell)

When I look at the list “passion” jumps out at me the most. When I think about Passionate fans – I think about Italian Football (soccer) fans, Duke Basketball fans, etc. Some of these people want to be a part of the event in any way possible. in my mind, these are the people that will be willing to pay for virtual access.

So, if you have a lot of passionate people that can’t come to your event – I think you could have a virtual goldmine. However, if your event community does not have a burning passion around your event -then I don’t think you can charge them for virtual access.

Here are two examples of events that have charged for virtual access. One event has passionate fans and looks like a wild success – while the other does not.

(1) Blizzard Con – they had 20K people onsite (sold out) and tens of thousands of people watching virtually and on DirectTV (Pay-per-view) at $39.95 per head. Mike, that’s a lot of cash. Blizzard makes World of Warcraft – from what I know – their fans are super passionate about the game and any advances in it.

(2) Meeting Professionals International – 2000 people onsite and a 24000 person member community. The # of virtual attendees was puny at this event. They charged $20 for access to the opening session and $300 for access to the full virtual event.

These two examples are a comparison of apples and oranges. [Blizzard has millions of tech savy, young customers while MPI does not] But – I think that it illustrates the challenge that event organizers face in deciding to charge or not – and, if yes, how much.

Thanks for starting the discussion! Great stuff!

– Sam Smith
@samueljsmith

Reply

Donna Kastner November 4, 2009 at 6:44 pm

I think there’s something more telling here. The concept of folks participating in some aspect of your event from afar is here to stay. I’m kind of surprised more planners wouldn’t spend $300 to experience this first hand themselves at the MPI event. It certainly would give them deeper insight as they determine if/how to incorporate this for their own events.

Reply

Dsi Games February 22, 2010 at 8:47 pm

Really intense post

Reply

brazzers free premium accounts Update 2014 October 7, 2014 at 11:10 pm

We’ll release new set of premium accounts as soon as possible.

Reply

gold ira rollovers guide October 8, 2014 at 2:35 am

Transfer The Funds – You are able to do this yourself, nevertheless a superior Gold IRA will likely not only guide we by the procedure however also help we out with all
the custodian when you’re having difficulties withdrawing.

Reply

Leave a Comment

Previous post:

Next post: