Jeff Killeen believes that virtual events have the power to transform publishing business models. The GlobalSpec CEO went to his company’s board in late 2008 to make the case for investment in the emerging medium. Even in a raging recession, he said, the digital media company needed to develop an online events business.
“The technology and application environment is there,” Killeen said. “The economic environment calls out for new efficiencies. There is an enormous inflection point that we are right on the cusp of.”
The company did invest. GlobalSpec seeded its first virtual trade show last year, inviting about a dozen exhibitors to host booths for free. The company began to position its rate card at a second show, and a third event turned a profit. About 20 virtual events have been slated for this year and 40 are scheduled for next year.
“I have never seen an embracement of a media concept take off as fast as this did,” said Killeen, whose company’s digital-only portfolio includes vertical search engines and e-newsletters for the engineering, manufacturing and related technical and scientific markets. “We see this as a third leg to our strategy.”
He isn’t alone in his enthusiasm. Event organizers have discovered that a virtual environment can feed exhibitors’ hunger for data while also offering an event new brand-extension and revenue opportunities. Moreover, the loaded databases and content expertise found at most media companies, combined with potential staffing synergies, uniquely position publishers to take advantage of the growing online events business.
Market Research Media, one of the first research firms to throw a number at the potential of the virtual events market, forecast in February a compound annual growth rate of 56% that would yield an $18.6 billion industry between 2010 and 2015.
Killeen plans to capture his share of that business. GlobalSpec built an in-house production studio to work with a third-party platform provider. The company hired event producers and engaged its current editorial staff in the identification and development of content areas.
Killeen declined to talk about specific profit margins but called the economics of virtual events “compelling.”
Other media executives were not so shy. Tom Cintorino, exec VP-digital media at Northstar Travel Media said virtual events increase the level of engagement the midsize media company has with its exhibitors and audience, reinforce the brand and have the potential to deliver profit margins between 30% and 60%.
Peter Goldstone, president of Hanley Wood offered this: “It depends on how much you want to invest in content and in the bells and whistles to deliver that content. I’d be happy if we did 50 of these and they delivered a 35% margin.”
Hanley Wood has accelerated its investment in virtual events because economic pressures that hindered travel among its construction audience coincided with market-shifting trends like the green building movement—trends that drive the need for education, Goldstone said.
The company developed a proprietary virtual event platform and built on that technology to produce the New Economy Home, a Web tour of a virtual demonstration home. The blockbuster event saw more than 20,000 b-to-b and consumer registrants.
That success, coupled with a Big Builder Virtual Conference that drew 2,000 registrants and trumped the attendance performance—even in a healthy economy—of its face-to-face predecessor, made clear Hanley Wood’s next step.
“We’re going to grow this business,” said Warren Nesbitt, executive director of residential new construction. “We charged every one of our business units to come up with ideas. We’re pretty committed.”
United Business Media made the boldest move of any b-to-b media company in the online events arena when last January it established a stand-alone, virtual event arm to work with in-house as well as outside clients, said Michael Doyle, executive director of consultancy the Virtual Edge.
“[Marketers] are getting fewer resources to do the same jobs, so they need to outsource,” he said. “Event management companies, production companies are getting into this space; publishers—it’s a no-brainer to me.”
UBM Studios has more than doubled the number of virtual events the company will host this year, currently planning about 70—a number that reflects considerable in-house growth, said Kate Spellman, senior VP-managing director of UBM Studios. While such outside marketers as IBM Corp. and KPMG account for only a small segment of those events, Spellman said she expects their contribution to the total to grow.
“We provide audience recruitment, content and a very deep interface, as well as our expertise and the dollars we’re putting in to understanding how the user interacts,” she said. “A company from the outside can come in, and we can put something together to make that journey deeper.”
Doyle is also bullish on the role that the developing area of perpetual virtual environments could play in bolstering media brands.
“People are still working through it, and it’s a tough time to be investing,” he says. “I don’t think anybody is fully there yet, but there are people who are doing a great job in harnessing the technology that is out there, who I think will be among some of the ones who get there soonest.”
Scott Pierce, VP-digital product development at ALM, is vying for a position as a frontrunner. He has developed the publishing company’s Virtual LegalTech, a perpetual environment that hosts live quarterly events for the legal industry, presented against a year-round backdrop of ongoing exhibitor booths, on-demand webinars and other educational and community development content.
“The challenge has always been, how do you build a 365-day event,” Pierce said. “Before, you didn’t have an option; now you do.”
As audience and exhibitors become more comfortable with the technology, the emphasis has moved to building out the banners, buttons and interactive functions, he said.
Pierce is investigating new revenue opportunities, including a virtual concierge program that would allow sponsors to present short, green-screen clips to readers as they navigate the site. An attendee announcement program would let sponsors to create pop-up messages that promote speakers and in-booth events—all for a price, of course.
“I don’t want to make it seem like I’m only revenue-driven,” Pierce said. But virtual events organizers are still establishing the earning potential of their properties.
“If you looked at the rate card before, it was very simple,” Pierce said. “Now it’s become much more a la carte.” M