Virtual events lack the perks of in-person events; by unbundling them, we may be creating unattractive packages that lack emotional appeal. On the other hand, is there any way back?
The enforced pivot to virtual has accelerated the unbundling of business events, a process that Martin Recke argues was already in motion long before the pandemic. As we have learned from media and travel, this type of unbundling can have a deep and irreversible impact on whole industries, and the event industry may be next.
Unbundling comes at events from many angles. Many associations see the unbundling of memberships to adjust their value proposition, as defined by the customer, not the association.
“Your value proposition must be adjusted (in its content, price, and means of engagement) to suit the needs of the target audience and to offer value as it is perceived by that audience.”
– Nikki Walker, MCI Group
Event technology allows us to do the same for virtual events. Organizers can, if they wish, offer access to specific types of content, specific sessions or even access to parts of an event to any single or group of people, live and/or on-demand, at any price they want. Almost everything is possible, but it may not always be desirable.
Unbundling brings with it a unique challenge, it affects the potential profitability of events, particularly when it comes to offering sponsors a return on their investment. The bundle balances the things that are important to the sponsors with what is important to attendees. Even when virtual events offer a fully-featured bundle, virtual attendees can quickly remove themselves from any session or networking opportunity they feel is not a good use of their time. Hybrid models may offer some of the in-person social element but are not, at least for now, likely to provide the perks of past events.
In his article, The Great Unbundling of Events Brian Morrissey points out that “events have always been a bundle that provided different forms of value to different constituencies”, and he explains the inherent challenge. “The problem of this bundle is the same for every bundle. Many of the features don’t apply to different audience segments.”
In a virtual format, most business events prioritize content delivery; some are also successful at connecting attendees. Only very few can facilitate serendipitous connections (the topic of our next webinar). The infamous late-night drink at the hotel bar is completely out.
Morrissey also talks about “Boondoggle”, which he refers to as the breather or non-monetary compensation that business events provide. This is the bundle component that is not advertized anywhere yet is an essential part of what makes business events an attractive bundle for many, at least those who are willing to enjoy such activities.
Marc Andreessen, the co-founder Andreessen Horowitz, the firm co-leading the latest investment round in Hopin, often quotes Jim Barksdale as saying, ”[there are] only two ways to make money in business: One is to bundle; the other is unbundle”. So it may not all be bad news, and there are certainly opportunities as well as challenges.
The biggest challenge is the disruption to the business model of business events. Without the hospitality component, the value proposition can be exhaustively analyzed and focuses mainly on the content. While many business events, particularly in specialized medical and academic fields, charge sustainable registration fees, it is hard to put a price on peer-to-peer networking and serendipity.
Unbundling can also be problematic for attendees who have tight budgetary constraints such as academics. Meals often cannot be expensed, and items in different categories have to be expensed to different accounts.
“If you were to give me an al-a-carte menu of offerings to purchase, it would be a nightmare for me. Instead of paying a membership and/or event registration, I would have to get approval for each item, it may or may not be approved and would have to be expensed to multiple university accounts…the time and effort for me to do this is sometimes not worth attending the event or renewing (sad fact!).” – Dr Amanda Cecil, Indiana University (IUPUI)
New business models will emerge, allowing audiences to pay only for what they want to consume or participate in. The same content can even be priced at different levels for on-demand consumption or live participation. Access to speakers or key sessions with select attendance can also be very desirable and priced accordingly in a virtual environment. While sponsorships may arguably still present a challenge, different approaches that take advantage of careful curation and matching attendees with vendors relevant to them will undoubtedly lead to creating compelling business opportunities.
There is no way of stopping this trend, at least not for virtual and hybrid events. The event industry is at a critical point where it needs to create sustainable models for virtual and hybrid events. Unbundling is almost sure to be part of how we do that.
Experimentation is needed in the short-term. That is what fuels and tests innovation and how we work out the sustainable future for the industry. As Recke puts it, “events probably won’t survive the lockdown and subsequent hiatus. That is, if they don’t offer an outstanding experience and value that makes them worth having in the first place.”