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The Virtual State

The recession is driving businesses to take virtual meetings more seriously and come to terms with the state of the existing technological offerings.

By Peter Gorman

The virtual meeting and event industry is still in its infancy, yet it has seen a dramatic increase in demand over the last year. Wired magazine predicted 2010 would see a 500 percent increase in virtual events. GigaOm.com, a highly regarded tech Web site, predicts that high-end virtual technology and virtual worlds will see a growth from about US$50 million in 2009 to $8-$10 billion by 2014.

“At the end of 2008, the financial crisis kicked off a recession that impacted all aspects of the meeting industry,” said Cece Salomon-Lee, director of marketing for InXpo, a virtual event producer. “Companies started canceling and scaling back their meetings. So what we saw in 2009 was a huge demand for technologies that still allowed these companies to meet without having to be in the same location. And the solution was virtual technology. That’s when our industry took off.”

Hesitantly Embracing
Small virtual gatherings may be fully serviced with Skype and webcams. But if you’re dealing with 500 or 5,000 people, those virtual tools won’t likely cut it. For larger meetings, the range of tools includes everything from the use of live Twitter and Facebook streams to 2-D presentations projected into a 3-D space and virtual worlds where participants utilize avatars—yes, pretty much like the movie—to walk, talk and make deals for their real-life counterparts. But not everyone in the business world has embraced virtual meeting technology.

According to technology consultant Scott Gavin, “a lot of companies are still not even using webcams, and that’s old stuff. They’re just so used to teleconferencing that they don’t use the technology that’s out there that would allow them to do so much more.”

But as businesses become more global and budget-conscious it simply becomes impossible to hold strictly face-to-face meetings as often as companies would like.

Virtual meetings herald potential budgetary savings and audience growth, but at what cost? First, the technology still has glitches. Next, consider that the real, physical face-to-face meeting—the opportunity to size up a potential business partner or co-worker in person rather than in avatar—is absent.

When you’re in a room with real people you see what they are doing, who is engaged and who isn’t, Gavin says, whereas in a virtual meeting people might be walking off to make a cup of coffee.

“Face-to-face meetings are [generally] most important early on in the relationship,” Gavin said. “After that you can have comfortable virtual meetings.”

But this all depends on the technographics of your audience.

“Basically, I’ve got about 20-30 seconds to get someone involved or I’ve lost them,” Salomon-Lee said. “When I went to see Avatar, if I had to do anything more than put on a pair of 3-D glasses, I would not have gone to see that movie. And that’s how people feel about virtual events as well.

“IBM and Cisco have utilized Second Life, a virtual world where people utilize avatars, but those companies are the avant garde of technology,” she said. “For most businesses that model doesn’t yet apply, not only because you’re limited to maybe 100 participants, but only a technologically accomplished audience can maneuver in that space. Second Life is very complex—too complex for most businesses. A good virtual event is not so complicated that people have difficulty functioning in it. There’s a learning curve but it shouldn’t be too steep or you’ll lose your audience.”

Even though not everyone is ready to operate an avatar, components of virtual meeting technology are already embedded in most business lives on a daily basis. Scott Feldman, managing editor of VirtualWorldNews.com, says that while there are companies resisting virtual technology, most will fall in line and use it in the near future.

“Virtual meetings are becoming more the norm,” Feldman said. “Workforces have come to accept engaging in a digital format, as much as they might profit from face-to-face. And even though this is thought of as a young person’s game—because of their experience growing up playing video games and having avatars fight battles and so forth—well, if it works, if it facilitates business expansion and saves a company money, then even the older executives will go for it.”

Expanding Experiences
While many companies were financially pushed into the world of virtual meetings—the cost of getting 1,000 people to a destination, then putting them up in hotels and feeding them for three days is sizable—Salomon-Lee says those companies are discovering that virtual meetings do a lot more than just save money.

One of the key advantages she sees is the quantity of intelligence she can gather from virtual meeting participants.

“From the moment you log into a virtual conference, I begin learning about you. I can see which exhibition booths you visited, which speakers you heard, what presentations you downloaded,” Salomon-Lee said. “And if I am running that conference and see that no one is staying longer than 10 minutes for the keynote speaker’s remarks, well, I know I had the wrong keynote speaker.”

That information is invaluable for planning future events and not necessarily something you can glean from live events and surveys.

“So creating a virtual space in which to hold meetings and conferences and trade shows might have initially been a way to save money for a company, but people are also realizing that the technology can become an integral part of their event strategy.”

Cisco held a salesperson meeting in September for 15,000 that was done all virtually, according to Kathy Doyle, senior manager with Global Cisco Live and Networkers Conferences.

“This extends the reach of our customers,” she said. “We’re giving them exposure to conferences they could not have attended in the past. We’re seeing this as a great new marketing channel.”

Doyle says some of the events she’s involved with allow virtual participants to interact with the live portions of the events in real time.

Such live-virtual hybrid events are the future, according to Michael Westcott, managing director of the Event Marketing Institute, a think tank dedicated to the development of business intelligence for companies using live marketing.

“You might bring in 500 of your key personnel for a live event, but make it accessible to several thousand others. Or you can bring your whole team and then utilize the virtual elements to extend the physical one.”

New Savings?
But do virtual events actually save money? Upfront costs to buy platforms used to generate virtual events start at about $10,000, but with bells and whistles can run much higher.

“When you start designing custom interfaces, gaming, flash animation, video and other experiences into your event to make it more engaging and potentially a more educational experience, you’re probably talking about a couple of hundred thousand dollars or more,” Westcott said.

Still, companies are seeing the value of the investment in those tools “because they can use them long after the live portion of the event is over,” he said.

Despite the sometimes stiff upfront costs for the virtual platform, companies still save money when utilizing them. InXpo reports, based on their own data and that from a 2009 American Express Business Travel Survey, “the average virtual event saves roughly $1,000 per attendee in travel and costs.”

“Essentially, you’re looking at a 30 percent cost savings for any large event, and that’s just on travel,” Westcott said. “Throw in hotel, venue, food and beverages and most companies are saving more than that. But you have to remember that the bottom line isn’t only the bottom line in terms of monies saved. It’s also about increasing the audience and leveraging your investment in the content of an event far beyond that one moment in time.”

Of course, pending your attendee technographics, there’s surely a debate to be had as to the most efficient content delivery system. One+

PETER GORMAN is an award-winning investigative journalist.

“I was worried that we’d throw a party and no one would show up,” she said.

Oziemblowsky knew that canceling the entire annual conference wasn’t an option because the invitees represented Ariba’s biggest customers. Her solution was to deliver the conference via the Internet, cancel the physical Ariba Live event and conduct a scaled down, six-city road show immediately after the virtual conference to meet face-to-face with customers and prospects. If the customers didn’t have the budget to travel, she reasoned, Ariba would travel to the customers.

With only five months to transform the physical conference into a virtual event, Oziemblowsky and her team researched the major players in the online event community and drew up a short list of potential partners. Cramer Digital Marketing of Norwood, Mass., and Unisfair of Menlo Park, Calif., were selected to design the look and feel of the conference and provide technical expertise.

To kick off the project, Cramer Digital worked with Oziemblowsky to create a video of the proposed virtual event. The video was crucial to Oziemblowsky’s internal sales efforts because it helped Ariba’s management team visualize what a virtual event might look like. Oziemblowsky also knew that the demo video would help prove that an online conference with a virtual learning component was much more than a webinar on steroids.

Once Ariba’s senior management team approved the virtual event, Oziemblowsky concentrated her efforts on developing content. She worked with Ariba’s product managers and partner companies to develop an information-rich conference agenda.

“There is no substitute for content,” she said. “Presentations at physical conferences tend to be monologues, not dialogues. But with our virtual event, we had multiple ways [for people] to interact: IM, chat, Twitter, Facebook and LinkedIn.”

Ariba sold sponsorships and booth space at previous events to help offset production costs. The company had become adept at driving traffic to the exhibit hall but the idea of driving traffic to a virtual booth presented a challenge. To help solve the problem, Oziemblowsky turned to Joerg Rathenberg, senior director of marketing at Unisfair.

Unisfair provides a so-called virtual event platform that enables all conference sponsors and partners to effortlessly build virtual booths, broadcast presentations online, integrate different types of digital communication such as instant messaging and online chat to link attendees together and generate post-event reports to measure ROI.

To market the exhibit hall and drive traffic, Rathenberg recommended that Ariba send instant messages to people as they attended keynote presentations and breakout sessions. He also suggested that the company post messages on Twitter and LinkedIn, and make people aware of booth contests and give-aways for those who were willing to sign a virtual guest book.

Promoting the Event
To promote Ariba Live 2009, Oziemblowsky purchased banner ads, pitched stories to bloggers, created LinkedIn and Facebook communities, sent e-mail blasts and asked the conference presenters to post messages on Twitter so their followers were aware of the event.

Post event traffic reports that detailed who attended keynote presentations, breakout sessions and who visited the virtual booths were provided to each partner. The reports have proven to be among the most valuable benefits that Ariba has provided to its partners.

“If the reports showed that an attendee visited a booth several times, attended several presentations on the same general topic and downloaded brochures, it’s safe to say that’s a good prospect and a sales person could contact them immediately,” Rathenberg said.

Overall, Ariba Live 2009 exceeded company expectations. The virtual conference attracted more than 2,500 attendees (twice the number of people who typically attend physical events), delivered 36 breakout sessions, generated more sales leads than physical events and saved the company 20 percent on event production and travel costs.

Might virtual conferences replace physical events? Not likely, Oziemblowsky says.

“There’s no way to replace face-to-face contact,” she said. “[Virtual conferences] are a different kind of meeting.” 

The future, it would seem, is…virtually…limitless. 

—Kevin Woo