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re:http://www.buzzmachine.com/index.php/2006/01/29/exploding-the-conference-business/
Last week Jeff Jarvis (buzzmachine – one of my ‘gotta reads’) talked about conferences in a blog post. His sentiments have echoed many I have heard. Scoble addressed many of Jeffs comments, but even Robert was a bit conservative in his estimates of what a conference costs these days.
[scobleizer.wordpress.com...]
2000 of My Closest Friends for 3 Days:
Lets say you are going to plan a conference for 2000 people for 3 days. To hold a conference that size, you are going to be pretty limited in what venues you can use. Those that will work – will cost you. If you are in a hotel, your rates will go down, but in a convention center they can increase significantly. At a minimum, you will pay about $1 a square foot. Or, a conference of 2k for 3 days, will run $50,000 to $80,000 for the space.
Next, a you will need a contractor to handle the conference setup, and to work with the venue. Most cities and convention centers require union labor to handle things like booths. That will run you another $20k-$50k.
You will need some AV. You can do it for about $10k on the cheap, or $20-$30k if you wanna be real.
Then you’ll need security as mandated by the venue. About $5-7k.
Then some labor to operate the thing. Another $10-15k.
Conference books. About $10-15 per attendee ($20-$25k).
Shipping all this stuff – another $5-20k (it gets out of control in a hurry).
Figuring out how to get all this to sync – at least $10k in consultants (very conservative).
Computers to manage your registration on site and for presentations $5k.
On venue site misc expenses (trust me) $10-20k.
Hey, you want internet at your conference? That will run $500 to $1000 PER connection! (or $8k easy)
You want a big shot keynote speaker? Figure $40-$150k speaking fees (plus expenses).
Showing your panel speakers some love : $2k – xx,000
Then your online site $7-10k a year.
You gotta have some of them there perty signs to tell everyone what’s where when – $2k on the cheap – $5k to get real.
Then your guys to build and run the conference (1 person per 500 attendees min) at probably 70k-90k a year.
You need to get your people there right? Lets say $20k in planes, trains, taxis, and hotels.
Who is that over there? Billy Joe Jim Bob Name tags: $3 each. ($5k)
Taxes, insurance, offices, phones, internet – oh no!. $xx,#*$! – $#*$!,#*$! per year.
Decorators? Don’t even go there! $20k just for designs.
Meeting planners? $10k just for the coffe talk. –$50k for them to actually do some work.
Still with us? Ok, here is where we shake out the men from the boys:
Getting a hotel for the conference? Lets say you reserve a room block of 750 rooms for 3 nights : 2250 times at say $159 a night. That’s a cool $380,000 you just guaranteed bucko. You still have the stomach for this? What’s more? you are probably going to have to make that commitment 1 full year out before the conference! Hello!?
Oh wait – we were doing for 2k people right? And they will be there for the 3 nights of the conference plus the travel day. So that is 8000 room nights and you will probably spend $180-$225 for rooms. So a real figure closer to $1.25- to $1.8 million. Yes, that is MILLION!
Next you’ll need to feed some people. Most conference centers will run about $50 per person per day for a continental breakfast and box lunch package. Or for a three day conference, $150 per attendee. Any where from $300k to $500k for food total. If you get shmancy fancy, you could easily top $150 per person per day.
Hey, so you are out of pocket for half a million to one million on this “little conference” and committed to several hundred more – you best be doing some marketing. add $50-$150k.
Happy Fun Thoughts:
As scary as that may be – lets think some happy thoughts and talk revenue baby:
In order to build a conference of 2k, you will end up comp’ing about 25%. Those will include staff, speakers, friends, friends of speakers, and VIP’s. Every conference I have been around has a comp rate of 25% or higher.
Then you will have deeply discounted rates for exhibitors and sponsors. If you have 50 exhibitors, you can figure on giving each 4-6 passes to go along with their package.
Next, you will more-than-likely have a discount rate for exhibit hall only attendees. That will run another 10-20% depending on your conference style and attraction. Of that, you will probably have a discounted coupon rate for your exhibitors. I know of one large conference that regularly gives exhibitors a 50% discount rate that they can pass on to their clients.
Then you will probably have a deeply discounted early sign up rate.
Lastly, many conferences will have single “day rates” that cut prices in half for each day.
So here is the big secret in conferences today – at a minimum, a modern conference of 2k will have less than 50% that actually pay to get in the door, and of those – only 30-35% will pay full price. For example, I know of one big new york conference that had 8k people attend last year. Of those, only 555 were paid in full, 1500 were single day passes and the rest were exhibit hall only and comps.
Exhibits? Ya, those will require special handling. Rarely do conferences sell packages at full price. Even the largest conferences out there today often discount their sponsorships 50% for multi conference signups.
So, as Scoble hints, it is exponentially harder to do a conference of 2k than it is to do a conference of 4-5 hundred. It is like that Richter scale thing where things start multiplying out of control.
Our Orlando conference of 500 in Feb of 2004 was 7000% more profitable than our Las Vegas conference of 1500 last fall.
I think 2006 will be a big year of shake out in the conference business. We will see many smaller conferences fade and the bigger ones solidify their standing. The Fad-Techs and the CES’s will grow in dominance. What will separate the big from the small will be marketing.
Does Alan Meckler selling Ses makes a whole lot more sense now? Alan will not be missed (atleast by those of us that run conferences…lol)
Jeff did have some very interesting comments about a conference being a conversation, we will tackle those another day.
BT
makes for a fun challenge. The good news is – the grid is almost done! Best conference ever.