By : Judi Virgulak - 05.12.2017
Digital revenue, is it new or renewed?
With so much buzz around digital revenue, it's time to take a deeper dive into what it really means to the event space, how it strategically impacts your bottom line, customer value and overall company offerings.
In a recent article titled "The New Frontier of Digital Revenue Streams", by the International Association of Exhibitions and Events (IAEE), they have done just that. A segment of the article discusses the Balluun platform and how it's playing a key role with The Toy Association, who partnered with Balluun to create the only B2B digital marketplace for the toy industry.
“We also have buyers and sellers who would really never come to Toy Fair who we’re able to bring into this community and to make that community more dynamic, more global, more exciting and more diverse,” explains Scott Evans, Vice President of Business and Client Development at Balluun. “And then we’re able to help The Toy Association monetize companies that they would never be able to monetize through the physical platform.”
The New Frontier of Digital Revenue Streams
By Michelle Bruno | December 2017
Digital revenue streams aren’t a new concept for event organizers. It’s been decades since web banner ads and sponsored emails emerged, and many new event technologies have built-in revenue-generation models. But rather than merely trading analog revenue opportunities for their digital equivalents, some exhibition and conference producers are pursuing entirely new digital income sources and new customers. The quest for digital revenue may require trade show and conference producers to re-evaluate their value propositions, the communities they serve and the products they deliver.
No one can put a finger on how much revenue organizers are earning on digital products right now. Marco Giberti, venture capitalist and co-author of The Face of Digital, says that “most of the big organizers report less than five percent and maybe as low as two percent to three percent of revenue is digital, which is still very low and certainly not successful. The good news is that margins on these digital revenues are way higher than traditional trade show or conference margins and this revenue line continues to grow.” There are many reasons why organizers would want to go after digital revenue. Net new income, especially when it’s less expensive to realize, can be a welcome contribution to the bottom line. Events with new revenue or growing revenue are more attractive to prospective buyers. Digital revenues can shore up some of the traditional event revenue streams that are shrinking. Plus, digital revenue streams can help fund specific digital initiatives, says Sean Parker, digital marketing consultant and the former director of digital media at the Consumer Technology Association.
The Path to Digital Revenue
The first step toward realizing digital revenue, says Francis Friedman, president of New York based consultancy Time & Place Strategies and author of The Modern Digital Tradeshow, is for organizers to ask, “What is the value proposition of the show?” It’s an important question, he says, because “if the value proposition is not strong enough, you’re not going to sell anything to anybody no matter what the medium.” But the reverse is also true, he explains. With a strong value proposition around the live event, organizers can more easily introduce digital derivatives, such as e-books, newsletters and virtual events.
To remain competitive, “the tradeshow industry will need to change,” Friedman writes, “from a time-date-place, logistics-focused, analog management model to an integrated 24/7, digital, attendee-centered, marketing focused, Modern Digital Tradeshow (MDT) model.” And part of that new vision encompasses innovative opportunities for revenue enhancements from brand extensions to other non-trade show products, ad sales and sponsorship of 24/7 content and new products and resources from joint-venture partners. Trading on the future is a good strategy for drumming up digital revenue, Friedman says. If CEOs and strategic planners are thinking at least three to fi ve years ahead, they can develop products in the present to attract attendees, most of whom are interested in what’s coming down the road. “People want to be able to anticipate change. So [an organizer] could do a mini-digital seminar or set up a mini-digital show with 10 booths,” he says. “It could develop a digital conference and start streaming on [forward-thinking] products and services.”
Reaching New Audiences with Content
The budget sequestration imposed by the U.S. federal government in 2013 deeply impacted the annual meeting of the Association of Government Accountants (AGA). Because of steep budgets cuts to travel expenses for government employees, AGA’s annual meeting attendance that year dipped 30 percent. As a result, meeting expenses exceeded revenues, and the association suffered from a “six-figure” hotelroom attrition penalty. Not wanting to repeat the following year, AGA decided to investigate hybrid events. They thought, “if [attendees] can’t come, why don’t we bring the meeting to them,” says Jerome Bruce, AGA’s director of meetings and exhibits. So Bruce and his team began to investigate hybrid events. They considered the costs, impact on in-person attendance and hotelroom blocks, loss of face-to-face engagement and continuing education tracking.
The team also looked at the number of sessions to stream, firewall issues (a common issue with government agencies), how and when to market a virtual event and how to leverage recorded sessions. They interviewed similar organizations deploying virtual events and sent requests for proposal to several companies. They performed cost analyses, calculated break-even points, prepared different pricing scenarios and courted executive buy-in on the idea. Despite its inauspicious introduction to hybrid events, AGA’s decision to host one in 2014 was a good one. It earned a 67 percent return on investment on the hybrid component—enough to validate the concept and make it a regular feature of the largest meeting they produce each year. AGA has subsequently converted all of its meetings to hybrid events based on positive revenue numbers. Bruce reports the average ROI rate from 2015 to the present is between 85 percent and 95 percent.
At the 2017 annual meeting in Boston, the ROI was 115 percent. They also discovered that about 10 percent of first-time virtual attendees attend in person the following year, and the group has plans to leverage the live-event content even more going forward. AGA’s hybrid-event program is a success because of some key strategic decisions. Although it doesn’t stream all sessions, it keeps pricing for the virtual event the same as the in-person event and off ers virtual attendees the same number of continuing education opportunities as in-person attendees. The team avoids user experience issues with a platform that allows attendees to test the system in advance for fi rewall issues, and remote users stay engaged with speakers through chat rooms. AGA markets the virtual option alongside the in-person marketing campaign but promotes it more heavily four to six weeks before the live event.
Leveraging Digital Assets and Capabilities
When Informa purchased Penton in 2016, it acquired 30 exhibitions, more than 20 data and intelligence brands and more than 100 print and digital brands. At the time, Penton was the largest North American business-to-business traditional media company. It was an opportunity, says Kate Spellman, then senior vice president of marketing at Penton, to make a broader assessment of what the combined companies could bring to the marketplace. “We looked across the company and said, ‘OK, what do we have here?’” she says. “We have expertise in vertical markets. We have audience reach and we have content. What can we build on that gets us to the next level?” she says. That examination of resources was the impetus behind Informa Engage, an international b-to-b marketing service that connects buyers and sellers within niche markets. It provides b-to-b marketers—the exhibitors and sponsors of exhibitions and conferences—with a range of opportunities to reach prospects beyond events.
As prospects move through various stages of the buying process, Informa Engage provides the content (rich media, infographics, native ads and white papers, for example) and face-to-face experiences to help marketers engage with buyers wherever they are in the buyer journey. What differentiates Informa Engage from other marketing services firms and even agencies is the data, Spellman says. Because of Informa’s position as the owners of academic publishing, business intelligence and media outlets, as well as a portfolio of global exhibitions, it can provide deep insight on buyers. “It’s the behavioral data, the intent data, the contextual data and then eventually the psychographic data that’s going to be the sweet spot of where we’re headed,” Spellman says. And it’s not only data on buyer personas.
Informa Engage has data on individual buyers in a range of verticals, including agriculture, aviation, supermarkets, finance and others. The concept of providing customer data and marketing services to marketers in a niche doesn’t have to be the exclusive domain of a global powerhouse like Informa. Spellman agrees that trade associations and for-profit organizations with a broad reach into a specific vertical and assets that include events, publications, data, research and online communities are in a perfect position to layer marketing services on top of that foundation. “One of the things that drives all of us is that when you’re in a vertical, you feel true to that vertical and it’s a matter of asking, ‘What can I do to make this better for our customers?’” she says.
Complementing the Live-Event Business Model
Despite the widely held belief that digital experiences can’t compete with face-to-face networking and education, many event producers have come to understand that there are ways that digital services can complement live event offerings. One example is the social marketplace developed by Swiss firm Balluun, an online platform that combines the properties of a b-to-b private social media experience with shopping, product discovery and e-commerce. Two of the more successful social marketplaces are The Toy Association’s ShopToys365.com and UBM Fashion, Inc.’s ShopTheFloor.com. Balluun’s social marketplace delivers shared revenue to traditional exhibition organizers in three categories. While qualified product manufacturers can create a profile page and set up a showroom for free, a paid subscription gives them access to a premium level of high-value features.
The platform supports a wide variety of advertising, outbound marketing and sponsorship opportunities (newsletters and category pages, for example). It also allows marketplace owners to share in revenue on “edge applications” such as Leads365, an app that collects lead information at a live show and automatically uploads it to the online marketplace. Balluun’s social marketplace helps live event organizers tap into a larger customer base. Some live-event exhibitors and attendees discover shows through the tandem online social marketplace.“We also have buyers and sellers who would really never come to Toy Fair who we’re able to bring into this community and to make that community more dynamic, more global, more exciting and more diverse,” explains Scott Evans, Vice President of Business and Client Development at Balluun. “And then we’re able to help The Toy Association monetize companies that they would never be able to monetize through the physical platform.”
Thinking Beyond the Channel
One way event organizers can take fuller advantage of digital revenue opportunities is to quit thinking of digital as a channel. “Once you make that change and once you recognize that digital is no longer a channel, but it’s infrastructure, you can build anything on top of it,” Sean Parker explains. A good way to think about digital as infrastructure, he says, is to imagine an organizer’s digital capabilities as a road. “If you know a road is coming through and you can build a mall there, you know that you’re going to get a certain amount of sales based on the fact that there’s so much traffic coming down that road,” he says. With digital capabilities as a core piece of an organization’s business model, it can create product bundles that combine traditional and digital features.
One example that Parker cites is selling exhibit space bundled with a guaranteed number of potential buyer matches (achieved through matchmaking and appointment-setting software). Sponsorships of digital-only services are a possibility too. “You can say to an exhibitor, ‘If you are the sponsor of this 360-degree video of the show floor, we’ll give you two extra priority points and offer you prime exhibit space that wouldn’t normally be available to you,’” he says. Event organizers that dabble in digital revenue have some added responsibility, Parker says. They need to deliver brand safety, metrics and transparency to advertisers. If an organizer collects and stores data with the goal of monetizing it, then cyber security is an issue as well. User experience is another consideration when delivering information and services digitally. “You need to make sure that the bar for entry is low enough for the user to take advantage of it,” he says. “Don’t make customers have to download 20 different plugins just to view your online courses.” As event organizers contemplate new digital revenue streams, some common themes are emerging. An investment in building persistent communities that are nurtured and monetized by 24/7 content and engagement will be required. In the future, revenue providers—the exhibitors, sponsors and attendees — will no longer be confined to the live event. As organizations build digital capabilities and revenue streams to remain competitive, new technologies, strategies and leadership will be critical.
About the Author
Michelle Bruno is a writer, blogger and technology journalist. She publishes Event Tech Brief, a weekly newsletter and website on event technology. You can reach her at firstname.lastname@example.org