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The Business of Virtual Events Following COVID-19

For decades, tech fanatics have gathered with businesses to conference about their industry’s progression. However, since the coronavirus outbreak, many of these events have either been closed or rescheduled. As a result, the $1.5 trillion global business event industry has gone virtual, allowing people to stay engaged while staying home. Virtual events have taken their place, keeping the knowledge transfer going during these difficult times. The question is: will virtual summits continue to prosper after COVID-19 is defeated?

The Techy Benefits of Virtual Conferences

Virtual conferences have an extremely techy appeal, which is why communities around the world prefer this form of engagement. As a result, the industry’s net worth continues to rise. By 2021, experts project that video, including web conferencing, will account for over 80% of all Internet traffic – and as the popularity of web-based interactions grows it’s likely we will see the popularity of virtual summits continue to grow, as well.

Today, 86% of participants in online meetings report equal or higher levels of engagement compared to when in-person. The most unique features of live streaming include talks, discussions, and panels. Additionally, many live conferences are backed with algorithms that match attendees with others who share similar interests. 

However, these aren’t the only benefits of online conferences. Virtual summits have shown to eliminate travel costs, reduce environmental pollution, reduce the costs of admission, allow room for a more targeted event focus, and allow conference organizers to invest more into their speakers.

Online conferences can also offer more specialized topics and draw the right crowds, whereas larger tech conferences tend to be more generalized and draw many different types of crowds to the same event, leading to a decreased payoff in the long run.

The Issue With Big Conferences: From Health to Data Security

The success of virtual conferences have led us to understanding the flaws behind major conferences. Of course, given the pandemic we’re undergoing, the primary concern is risking the health of attendees. 

In February of 2020, Facebook announced it was canceling its annual F8 tech conference due to a fear of spreading COVID-19 across attendees, speakers, and hosts. Similarly, the World Health Organization (WHO) even canceled its annual conference for similar reasons. Twitter has stopped any non-essential travel amongst its corporate staff indefinitely. Jack Dorsey, CEO of Twitter, was nixed from appearing at SXSW back in March 2020, and SXSW eventually went on to be canceled.

It’s also important to note that COVID-19 isn’t the only thing that can be spread. With stress levels high because of COVID-19, attendees are vulnerable to the spread of illness and burnout. Contributors to overwhelming feelings of burnout can include jet lag, alcohol, overscheduling, and tight travel deadlines.

Furthermore, the aforementioned health concerns are also transcending into data security. Nearly everyone is looking for health and safety instructions for their public events. However, this leaves conference-goers vulnerable to phishing attack emails. Take it from the US Department of Homeland Security, “Coronavirus is a prime opportunity for enterprising criminals because it plays on one of the basic human conditions – fear.”

Outside of health concerns, there has been a pattern of conferences lacking focused topics in the past. For example, Intel canceled its annual Developer Forum conference in 2017, which had attracted thousands of attendees for nearly 20 years. Jack Gold, the Principal analyst at J. Gold Associates, spoke on this issue, saying, “3,000 attendees would come for one thing and 1,000 would come for something else. If you’re developing for PCs, do you care about AI or self-driving cars? It’s gotten so broad.” In other words, big conferences began having big problems when organizers stopped giving presentations their audience could relate to. In fact, many conferences deliberately sell as many tickets as they can to increase their revenues, which can lower the relevance to attendees.

The Expense of Canceled Conferences

Each year, annual business conferences generate more than $1 trillion in direct spending. This includes airfare, hotel stays, dining, and transportation. With this being said, missing a single conference can summate to significant losses in income and future opportunities for both vendors and attendees.

For example, Google’s 2019 I/0 conference was expected to welcome 7,000 in-person attendees streaming to 530 events worldwide. However, their recent cancelation resulted in $20 million in direct losses. 

Even greater, the Mobile World Congress lost $480 million by canceling its conference set to welcome 109,700 attendees. Similarly, ILostMyGig.com, which is a website tracking local business losses as a result of canceling SXSW, has verified $4,285,037 in lost income. This includes expenses for caterers, photographers, musicians, film crews, etc. 

Another example is the cancellation of the SXSW conference. SXSW welcomed 280,000 attendees in 2019, and after cancelling, they saw $350 million in direct losses. Losing another heaping amount of money was the E3 conference taking place in Los Angeles, California. In 2019, E3 had 66,100 attendees. When cancelling, they lost $75 million.

It’s important to note that the aforementioned loss reports do not include:

  • Businesses generated from networking at events,
  • Attendees’ spending at local shops and attractions, or
  • Profits for the companies hosting each event.

Saying this, here’s how spending in a normal conference works. 20% of the conference’s budget is typically dedicated toward venue coverage. Another 20% is put aside for food, beverages, and other catering expenses. The equipment needed to put on the conference typically costs around 20% of the overall budget, and less than 5% of the budget is spent on program design and speaker fees.

Overall, the cancellation costs of more than 10 major tech conferences resulting from the COVID-19 outbreak has officially surpassed $1.1 billion. Virtual summits have gone on to save the industry, and keep the community connected.

The Future of Virtual Conferences

Today, 15% of travelers plan to avoid public transport and large cities, even after restrictions have been lifted. In other words, both attendees and businesses have begun embracing the future of virtual summits. In fact, Google is in the process of transferring its Cloud Next conference into an entirely virtual experience called Google Cloud Next ’20: Digital Connect. 

However, when we return to regular life, people will prefer local events rather than global. Why? People are reluctant to pay for travel and other costs as COVID-19 has left many in a vulnerable socioeconomic state. Still, 40% of Americans were unable to cover an unexpected charge of $400 even before the massive wave of unemployment. In 2020, ticket prices for the most popular tech conferences will cost up to $4,000. Attendees must also budget for their own travel, accommodation, and work days missed. 

In-person business events can still prove to be successful on a local level. Smaller, more local events decrease the costs and risks associated with larger national and international conferences. In 2017, in-person business gatherings generated $845 billion in sales. While the era of big conferences has temporarily ended, there are greater solutions.

Around the world, businesses and attendees are adapting to their new normal. However, virtual summits have provided an outlet for communities to be able to stay together. Where do you think the future of virtual conferences will go?