Trimming the Fat
It’s an infamous story in b-to-b publishing circles. An assistant editor for a prominent publisher was put in charge of handling an event, including negotiating with the hotel. Those negotiations resulted in the publisher owing the hotel more than six figures for failing to fulfill its room block commitment. With the right people finally taking charge, the matter was resolved without the publisher having to blow the entire show budget on the hotel.
While magazines are lucky to generate a 20 percent to 30 percent profit margin, trade shows and other live events typically yield a profit margin in the 60 percent range, thanks in large part to less overhead. But publishers who fail to keep their costs in check will experience a serious drain on the show P&L at the end of the day.
While the venue is typically the biggest expense, the costs are generally the same for everyone;room attrition clauses, labor fees, food and entertainment. But to really enjoy savings while providing a high-value show, publishers need to get creative.
For ALM, that means recruiting sponsors and vendors to offer value-added services on site that could put a serious dent in the publisher’s budget if they have to eat the costs themselves."We’ve done a lot of partnering for the value-added component to our exhibitors that we normally would have to budget for;whether it’s technology or print or marketing communications," says Henry Dicker, vice president of trade shows and conferences at ALM. "Instead of having to absorb the costs we’re going out to partners. It’s a revenue opportunity for them, while it provides services for us and our sponsors."
Services could range from distance-learning opportunities to extending an exhibitor’s brand online. "With the technology partners we provide, the expense would probably be unreachable," says Dicker. "The savings, although untrackable, is still significant because we’re adding a technology service that could cost us $50,000 to $75,000. But we’re not having to absorb that cost because we’re offering the provider the opportunity to use it as an extension of their brand."
The response from sponsors is very good. "This allows them to make their lives easier on site," says Dicker. "There are always going to be those where you throw up your hands and say, ﾑI don’t know what happened, this should have worked,’ but for the most part they’re very pleased."
Knowing your audience will go a long way to paring down costs, says Jeff Fenner, director of conferences and trade shows at GIE Media. "It’s great to have outstanding ideas but budget realities come into play," he adds. "What is it that your attendees really go for? You can spend quite a quite bit on food and typically there’s a lot of waste. If lunch is the big event of day, put the money into lunch and scale back elsewhere."
Other costs savings tips can be as simple as skipping the $50-per-day laser pointer and buying one down the street at Office Depot or drawing the line between what presenters and attendees will really use and what might be nice as an option. "You’re assuming folks are using this or that and they end up not using it all," says Fenner. "Look at the labor associated with an event. It can be very costly, particularly with audio visual."