Controllers at advertising agencies across the country are grieving. Or they should be, anyway. Why? Because beginning this year they're going to be inundated with requests for an increase to travel, education and conference budgets. Interactive media is no longer on the fringe, and interactive media conferences no longer have to subsidize their attendance by giving away VIP passes to anyone who works at an agency or brand marketer and can claim access to some part of a media or marketing budget.
Controllers notwithstanding, it's good news for everyone. Interactive media conferences will become less dependent upon sponsor revenue, which frees them up to program more directly at their attendee constituents. These new market forces will only (further) increase the quality of the show content, and in no time they'll easily be worth the $1K or so they'll charge for a 2-day event.
And $1K is a bargain. Most conference pricing is cost-based pricing. This means that show organizers build a P&L from the bottom up, figuring out what their expenses will be, and then determining what to charge to cover them. No, it doesn't cost $1K to invite a bunch of unpaid speakers to present from the stage. But it does cost about that much for the venue, the food and beverage, the marketing, the on-site collateral, security, shipping, decorator, A/V, registration processing, insurance, overhead and staffing.
Most events try to cover their expenses through registration, and make a profit through sponsorship. Except in this industry, where we've traditionally had to cover our expenses AND make a profit through sponsorship. Instead of a better-attended more successful show being more profitable, it actually becomes a greater liability. More sponsors are required to cover the added expense of more people, and more sponsors are potentially disappointed if the turnout isn't as expected (which is usually the case, as free passes result in a lot of attrition. How much? Try 50% - half the 'VIP' audience commonly doesn't show up). And more sponsors to satisfy means more sponsors with speaking roles, which leads to greater attrition and, yes, more disappointed sponsors. Isn't that ironic? Sure, but if you're a show producer, it also just sucks.
Before agencies start griping about $1k for an event, they should be thankful that shows are only using cost-based pricing and not value-based pricing. No executive in his or her right mind would go to a show if they thought they'd only raise their own human capital by $1K, or save $1K for their client, or figure out how to drive an additional $1K of sales in their next campaign. You could pay six-figures at some shows and still come out ahead. No, $1K is a bargain. Pay it, happily.
So the shows improve in quality, which is great for attendees. But sponsors become less central to the show's P&L, which is ungreat for sponsors. Should they just learn to be satisfied with less? That, or they'll have to learn to re-invent themselves to market in a new environment, just like their advertiser clients are doing. That too is ironic, but it's equitable and the result of progess in the industry. And that doesn't suck at all.
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