Due to the coronavirus, the events industry was forced to adopt a virtual model basically overnight. While some companies have taken the shift in their stride, what the future holds for the sector remains uncertain
The popular word you hear everywhere is “pivot”, says Matt Scheckner, chief executive of Advertising Week. And pivot he and his team have, after just staging their third annual Japan and Asia-Pacific conference completely as a virtual event.
Stillwell Partners, the event’s holding company, is one of a countless number of organisations that have had digital transformation thrust upon them, with the coronavirus outbreak rendering in-person events impossible for now.
With the UK events industry forecast to lose up to £58 billion in 2020, according to VisitBritain, shifting business models towards virtual events has been a necessity.
Yet for companies like Stillwell, early moves to diversify customer experience digitally have not only cushioned the blow, but paved the way for a virtual model.
“We actually started to pivot our business years ago,” says Scheckner. “That doesn’t mean we are happy about what’s going on. But it has moved some things that were on the back burner and put them on the front burner.”
Scheckner is referring to the digital tools that complement Stillwell’s core events business, such as its AWLearn professional development platform, AW360 thought leadership content portal and Great Minds podcast, which he felt very strongly about developing prior to the pandemic.
“Our goals of entertaining, educating and enlightening people all stay the same even if the medium is different,” he notes. “And that’s how we’re measured, on whether we create stuff that people want to engage with.”
Shifting business models
Translating those goals from physical to virtual events is challenging creatively, technically and financially. Monetising virtual events has been a conundrum for Secret Cinema, which has built its brand on bringing famous films and TV shows to life through immersive experiences.
“We have gone from being a rapidly growing revenue company, to being a no-revenue company. The term still gives me whiplash,” says chief executive Max Alexander.
The company’s lockdown solution has been Secret Sofa, turning cult films like Romeo and Juliet and Ghostbusters into a Zoom/House Party-type experience complete with costumes, interactive comments, suggested food, drink and dance moves, plus an after-party.
The initiative so far has been marvelous, says Alexander, even if it has not solved the company’s COVID-19-induced revenue issues.
“We sell hundreds and thousands of tickets to our live shows costing up to £100 each. We don’t have a show on now so we aren’t selling any tickets and we don’t know when we’ll be able to put a show on again,” he says.
“To make money now, we would have to attract millions of people to our Zoom parties, which are priced at up to £10 a ticket. We haven’t made any money, but it was worth doing. They are not economic substitutes.”
Challenges and benefits of online events
Revenue models have been a painpoint for companies getting to grips with digital transformation and virtual events, says Jon Strutt, content marketing strategist at virtual networking startup Brella, which has fast become a source of expert advice.
For all their challenges, virtual events can offer many benefits and be lucrative, he believes, but require a huge mindset shift.
“In physical events, there are a lot of costs, like catering, security and venue hire, which is why ticket prices are so high. For a big conference, you might need to sell 100 or more sponsorships just to generate some profit,” he explains.
“For virtual events, you could sell a quarter of that at a lower price and make more profit because your costs are far lower.”
Brella actually allows event organisers to monetise networking by incorporating it into their sponsorship packages. The digital nature of virtual events also offers greater detail and transparency regarding return on sponsor investment.
“In a virtual event, you know how many people attended your ‘booth’, how many people watched the livestream and you can track clicks to your website, which is all value information,” says Strutt.
Maintaining audience engagement is something both Scheckner and Alexander call out as another challenge of online events. However, it’s what Brella aims to solve, with an algorithm that matches attendees based on topic interests and intent, to enable more organised and meaningful networking among thousands of attendees. “Having that audience interaction is the thing you need to make a virtual event,” says Strutt.
A long term trend?
Virtual events startups like Brella have been on the rise as they are uniquely positioned to capitalise on the digital transformation unfolding within the sector and to work with traditional events companies on adapting as the trend continues.
Strutt, Scheckner and Alexander are unanimous that standalone virtual events are a COVID-19 by-product and physical events will return, albeit with distancing-friendly formats and parallel online components.
“There’s no way in which virtual events are going to be a substitute for Secret Cinema’s congregational storytelling. But I do see us running more virtual events in parallel,” says Alexander.
“Our hope is that in three years from now, we look upon this as a time when the Google of immersive theatre was being born. With the right title and audience, you could really set fire to a production. But we’re nowhere near there yet.”
The new role of digital platforms in our lives means a virtual component will be a must-have in the new events landscape, even with a renewed desire to connect physically.
“I do think hybrid events will be the next thing to help event organisers reach new audiences. A virtual component to a live event, which previously was thought of as new and hip, will now be essential to compete,” Brella’s Strutt concludes.