Editor’s Note: Today’s post is by Mark Carden, the director of the Researcher to Reader Conference, and a Managing Consultant at recruitment firm Mosaic. Mark has worked in the publishing and libraries sector for over 20 years, including holding senior sales and marketing positions at Ingenta, Ingram, and Dynix.

What should a conference cost? The answer can sound a lot like the answer to the question, “What should a journal article cost?”. “All the time is given for free by the speakers (authors), program committee (editors) and moderators (reviewers), and the conference organizer (publisher) profits from the delegate (library) subscriptions, and spends the loot on champagne and cigars.” As with journals, there is both truth and misconception in that answer.

I’m going to explore the economics of conferences – physical, online, and hybrid – looking at costs, value, prices, and (dare I say it?) profit. And we’ll talk about the labor (volunteer, salaried and entrepreneurial) that goes into making a conference work. I will also touch on the value and challenges of sponsorships and exhibitions.

The disclaimer, however, is that I’m writing this heavily influenced by my years of experience running Researcher to Reader (R2R). The R2R Conference has always been unusually open about its operations, economics, and delegate feedback, and this article takes this even further. My knowledge and opinions are also influenced by having attended over 100 conferences and exhibitions, and by many conversations with conference attendees, speakers, organizers, and sponsors.

Cost

Firstly, then, what does a conference cost? Well, it is possible for an event to have the appearance of costing nothing. If nobody on the program is getting paid, the administration is provided by some benefactor’s staff, and the venue is not charged for, then there could seemingly be no cost at all.

Free physical venues are actually hard to find, with even non-profit institutions normally levying substantial charges. Each room at a venue might cost anywhere from £200 ($275) to £4,000 per day to use. Plus there are potential extra costs for staging, furniture, screens and other physical elements; at R2R last year, filling the main hall with convivial half-moon tables, rather than cumbersome round tables or sterile rows of chairs, cost almost £1,000 extra. Food and drink at the venue is also a major cost, whether what is on offer is a simple bag lunch in Bournemouth, or a sumptuous feast in Berlin. An event organizer can probably halve or double their costs through their choices of venue and refreshments, but getting people to bring their own sandwiches feels a bit unreasonable.

But in our new online world, with the delegates stuck at home, and cheap webinar platforms being available, it seems like the venue has finally become almost free. Many of us have attended some pretty good online webinars over the past year, which have clearly incurred minimal cost, been priced enticingly, and offered some value. But I think we have also seen the limitations of this approach, with some bad experiences including clunky presentations, intermittent connectivity, and very little opportunity for interactivity. More sophisticated online event management tools are becoming available, offered by mainstream companies like Bizzabo or EventsAIR, and by ‘academic’ start-ups like Morressier or Underline. These platforms will typically offer an online timetable, a presentation management environment, and some delegate interaction capability.

Other applications are also emerging to support online yet face-to-face interactivity amongst conference participants. These video-conference and ‘virtual room’ systems vary in functionality and graphical sophistication with, for example, the 3D ‘second-life’ feel of Virtway, the functionally rich but amusingly retro GatherTown, the highly intuitive SpatialChat, or the traditional windowed feel of Zoom and GoToMeeting.

Some of these tools are pretty cheap, especially for low volumes, or if you can tolerate disappointing user interfaces or lost connections. But the most effective and reliable environments can cost almost as much as a physical venue.

The tools themselves are not enough, however, as you also need people who know how to set these up and operate them effectively, if you want to avoid confusion or ‘dead air’. This can be done quite successfully within a tight budget and using volunteer labor, but my learning this past year has been that a ‘real conference experience’ needs both robust tools and a professional AV production team.

As I have been saying since last summer, R2R will be spending very nearly as much on the online tech and people for 2021 as we spent on the physical venue and food in 2020, around £20,000-25,000.

While most speakers will offer their time for free, it is not unusual for a speaker to ask for support with travel or accommodation costs (R2R spends around £2,000 per year on this). Some events also pay a fee to secure a particularly desirable or talented speaker, and this can be a substantial sum for the services of a well-known professional pundit or entertainer.

The other big cost element, which is sometimes unrecognized, is the time that it takes for the administration of the event and the development of the program. For some conferences, these resources are seemingly free, through volunteer labor and the provision loaned administrators, but whether these costs appear in the conference budget or not, these people still need to feed their families somehow.

Again, this work can be done in half or double the time, depending on quality objectives and operational efficiency. But if you want a strong and varied program, rather than a series of lectures, and if you want properly briefed and coached presenters, rather than people mumbling into their notes, investment of time in preparation is crucial to providing value in delivery.

I will say more about the economics of conference labor below.

Value

But is all this expenditure (whether on a nice venue or on online sophistication) necessary, or even desirable? In my experience, people always say they don’t want (and can’t afford) ‘expensive bells and whistles’, but if you list each ‘bell’ and ‘whistle’, it turns out every one is essential to someone. In scholarly publishing, librarians often demand low-cost simplicity from publishers, but also, as it turns out, want fast performance, excellent metadata, author profiles, and so on. Did every R2R delegate feel that paying about £2 per day extra to sit at a half-moon table last year was worthwhile? It’s hard to say.

Delegates seek value in three key areas: Content, Conversation, and Comfort.

For the Content to be valuable, thoughtful development of the program to appeal to the intended audience is obviously key. But effective communication is also vital, whether that is a good sound system at a venue, or a platform that can deliver without outages. You can deliver some Content value with a broadcast webinar, and this certainly can be nearly free. If that is the only intent, then arguably it would be more sensible to communicate most content via a blog, vlog, or (dare I say it?) a journal article.

The Conversation aspect is particularly valued by those seeking innovation and collaboration, looking to forge new partnerships, or to find new customers or suppliers. It is all about the ability of people to gather and interact effectively. This Conversation can be almost free too – I fondly remember Scholarly Social trips to the pub – but the Conversation has less value in isolation; it is inevitably more focused, productive and valuable when stimulated by and structured around some well-curated Content. And it is not enough to have a room in a pub; enabling both purposeful and serendipitous meetings requires an appropriate venue, whether that is a hotel ballroom or an online application.

I will use the term Comfort to encapsulate the environment in which the Content is delivered and the Conversation takes place. This starts with the registration process and runs through the entire administration and ambiance of the conference. Getting this right is crucial to enable the communication of the Content to be effective and to facilitate truly useful Conversation. The event’s Comfort might seem to be an optional luxury, but it is very important for our human wellbeing, and to make attending an event more productive. Paying attention to the event’s environment and ambience is also particularly important in equitably supporting people with disabilities or other challenges.

Out of Content, Conversation and Comfort, the delegates may be most aware of the visible costs of Comfort – the sparkly venue, the sugary pastries – and these are the costs that ‘disappear’ with online, alongside travel and accommodation. This cost is also most readily recognized by accountants and bosses: years ago, my manager vetoed a conference in the South of France, as he (rightly) assumed that this was a comfort-heavy ‘jolly’, based on the location (and menus) alone. But these assumptions disguise the fact that much of this Comfort is not peripheral indulgence, but essential value (such as WiFi, or a delegate list). They also fail to recognize that much of the overall cost actually goes into delivering value in Content and Conversation, not Comfort.

While people can get Content via a broadcast, Conversation in the pub, and Comfort by staying at home, a conference is about delivering all three together and creating new value by the combination. A good conference will aim to deliver well-curated and engaging content, smoothly facilitate stimulating conversations, and do this in an environment that is conducive to both.

Price (cost-based)

The ticket price for a conference is easy to calculate. It is the total cost of the event, minus the sponsorship income, divided by the number of registrations. Simple. But hang on a second, this is harder than it looks….

Some costs are fairly predictable, but most vary with the number of registrations. Costs can be mostly fixed (accountancy or graphic design, for example), variable in big thresholds (the main plenary room size and cost, or a minimum catering number), variable in several tiers, (insurance, breakout rooms, or some online platforms), variable at the margin (per delegate extra meals or extra licenses), or infinitely variable (marketing).

Income from sponsors or exhibitors is vitally important to the finances of most events, and yet is challenging to forecast reliably – more on that later.

For registrations, you can set a target number, but the actual number and mix of delegates is hard to predict, and is also very different for every type of event and for each year. For Researcher to Reader, we are aiming for about 150-200 people (as we want to keep the event small and collegial), and have been getting around 150-180 as we grow. But while we launch in October for a February conference, most people register very late – in 2020 fully 25% of our delegates registered in the two weeks before the event (2 people just turned up on the day), so predicting the numbers in advance is nerve-wrackingly impossible.

Then there’s the mix of registrants. Most conferences offer concessions for presenters, ‘early-birds’, and other special delegates. The proportion of free, discounted, and full-price registrations is very unpredictable, and can make the difference between break-even and loss.

For some conferences, going online has potentially been a way to attract many more delegates, when travel and accommodation cost is eliminated, and if ticket prices are lowered. But price reductions and aiming for growth is risky – will halving the price double the registrations, and so deliver the same total income? A low-cost online event is also potentially good for inclusiveness and diversity, by enabling wider participation. Some recent and upcoming events are proudly reporting significant increases in registration numbers, especially where simple content is being broadcast to a wide audience, and where access has been widened. Other events have experienced a drop in attendance on moving online, however, even with lowered prices. This may particularly apply to the ‘best’ events; those which have been strongly about collaboration or networking in the past, if people have suspected that poor event design and weak technology would make this impracticable.

Turnout rate is also a challenge in the online world: an expensive physical event can confidently expect a 95-99% turnout; an inexpensive online event risks being anywhere from 20% to 80% participation on the day. Large numbers of unused bookings, while contributing some revenue, can’t be considered a good outcome for the event, the attendees, or the absentees.

Going large is not really an option for R2R, as we are all about the Conversation, and can’t really imagine (at least this year) doubling the capacity (or number) of our carefully-planned collaborative workshops at the last minute, for example. But paradoxically, online and hybrid technologies might actually facilitate intensely collaborative events becoming larger in the future, as navigating and making connections within an effective online environment might even become easier to do than in a huge physical convention center.

So it turns out that a conference organizer can’t just set registration prices using a simple calculation, in order to be confident that an event will cover its costs. The many variables introduce a huge element of pricing guesswork and financial risk each time an event is run. The organizer just does a forecast and tries to make it come true.

Price (market-based)

There are two other important determinants of price: market norms and willingness to pay. The dynamics of both of these factors are changing with the arrival of online conferences.

In general, physical conferences in scholarly communications have been priced at anywhere from free to £900 per day, which represents a big range. For a non-subsidized well-curated event, a headline rate of around £400 per day (excluding various discounts on offer) seems to be fairly typical. The cost of any grand dinner on offer, plus accommodation and travel, is usually in addition to this. For online conferences, most organizers have slashed their prices to more like £100-200. But this has typically been for a much reduced offering, such as an all-day timetable being reduced to an afternoon of webinars, or a fully-interactive conference being reduced to a content-only broadcast. This has contributed to a conception that an ‘online conference’ should be between half-price and free, compared to its past physical manifestation.

R2R is bucking this trend, keeping 2021 prices the same as 2020 (although extending the early-bird discount to all), we claim to be offering the same value, with similar costs at the same price. We shall see how acceptable this is to our constituency.

Willingness to pay these ‘high’ (or, as we like to say, ‘same’) prices for an online event depends on a number of factors. Firstly, there is an assumption that going online just removes 90% of costs – the Comfort costs – and that these savings can (and should) be passed on to the customer.

Then there are low expectations of value. People seem to be doubtful about networking and collaboration actually being possible at most events. Sometimes they can see there is little attempt to deliver a Conversation, or maybe they don’t trust a more ambitious organizer to deliver the promised value online. And finally, there are ‘rules’ – several people have told me that their organization has simply outlawed all conference attendance, on the undiscriminating grounds that ‘travel is canceled’ and ‘online conferences are no good’.

Profit

In the end, the actual registration income plus the sponsorship income, minus the actual cost of the event, results in a surplus or a deficit. A surplus can be reinvested in the event, redeployed elsewhere, retained for a rainy day, or distributed to founders or investors as profit.

Some commercial organizations run conferences primarily with profit in mind, but even their loot doesn’t necessarily all go toward ‘fat cat’ champagne. They invest surpluses to grow their business and to fund risk-taking, and they may also distribute profits to their founders who put their capital at risk to start and sustain the company, and they may pay dividends to their current investors – who could be the pension funds on which we all rely for our retirements.

There are also small commercial conference businesses, working primarily in our sector, like the one that runs R2R, which have a sense of mission, but are also generally ‘for’ profit (as opposed to being ‘for’ loss). Such a standalone business, if it is to continue, needs to make a surplus to be sustainable. I own the R2R Conference business, and it seems reasonable that it should (one day) be able pay me something for my investment, risk, and efforts, even if I have relied on both free labor and registration fees from academia to make the business work.

Meanwhile, some scholarly societies or other ‘not-for-profit’ organizations who run conferences may divert a surplus (or fund a deficit) through cross-subsidy with other activities. This can be controversial, since some people complain when, for example, a learned society’s profitable conference is used to subsidize its unprofitable publishing arm – or (perhaps more commonly) vice versa. Yet there is certainly an opportunity to do good work by using a conference surplus to pay for otherwise unfunded outreach or education, consistent with an organization’s mission.

I will put forward the four key propositions that I think make aiming for a healthy surplus in this environment acceptable:

• A not-for-profit organization should be able to use a surplus from one activity to subsidize another activity without opprobrium, if it is open about this, and the work is consistent with its mission.
• Not everything in academia has to be ‘not-for-profit’ in order to be good or honest; a commercial supplier can still further the aims of the academy, and potentially do this more sustainably than a subsidized project or a voluntary effort.
• Fair profits are a reasonable reward for innovation, investment, risk, and effort; it’s only when supply is monopolistic or profits are extreme that a government, market, or community needs to take corrective action.
• A collaboration between commercial organizations and voluntary labor can deliver outstanding and sustainable results, and many conferences are excellent examples of this, with the company mostly worrying about the money and the volunteers mostly worrying about the content.

Labor

Whether operated by a commercial company or a not-for-profit organization, the conferences in our world rely very heavily on the free labor of many people. Most speakers and committee members are not paid. Or to be more accurate they rely on their income from other work to be able to give their time without charge. This is akin, I think, to academics reviewing articles for free, relying on their university salaries (but often ending up doing the review work in their personal time).

People can be motivated to help for business or career development reasons, or simply good will toward our community, and conferences just would not happen without this contribution of time and expertise. We should especially recognize small business owners and consultants who give their time instead of earning income (compared with employees who, give their time while earning their salaries, whether or not this is out-of-hours). We should also recognize people from under-represented demographics who disproportionately pay ‘cultural taxation’ when agreeing to give their time to promote diversity, equity and inclusion.

Additional work is done, of course by paid staff and contractors. Many organizations have their own salaried events staff, and some conferences are subsidized through using the staff of parent or affiliated organizations, but R2R has no employees or benefactors, and relies on outsourced event management and media production suppliers. This year, in order to deliver the online conference, our contracted media production work has gone from 4 person-days to around 20, representing a considerable cost increase.

Finally, for many conferences there is the ‘sweat equity’, where the one or two people work to make it all happen, sometimes for no financial reward. This can sometimes be a leader in a not-for-profit or an association of some sort, who goes the extra mile, or it can be the owner of a small business that runs the conference. A business owner might hope to turn some of the sweat into money at some point.

Sponsorship

Financial contributions by sponsors or exhibitors is usually crucial, as it can be a bedrock of funding before registration revenues arrive, and in the end this helps to keep tickets more affordable. Some sponsors provide non-cash help, supporting an event with marketing, admin or venues.

But there is moral hazard in this. In scholarly communications, sponsoring organizations are often the very companies (such as commercial publishers), which many members of our community disparage and seek to expel, so there is a potential conflict of interests and a risk of resentment on both sides. Also, some sponsors can seek to gain value by influencing the conference program, which could potentially undermine the quality and integrity of the content.

Some sponsors just want to be seen to support an event, perhaps hoping to get some brand enhancement. Others, however, have strong focus on practical benefits and on return on investment, and press organizers for opportunities to sell their products and services. At R2R we try to give sponsors good visibility and value, while resisting compromising our credibility. We ‘talk up’ sponsors a lot, and ask our delegates to recognize their contribution because, we admit, this is economically important to us.

Networking opportunities are considered particularly valuable by many sponsors, and I’d like to think being an official sponsor opens some doors to enabling positive conversations. Some canny suppliers don’t sponsor an event, but just send a delegate with a sales mission, recognizing the value of direct engagement via networking and not appreciating any added value in sponsorship. Conference organizers know that any registration is welcome, of course, but seeing a supplier recognizing the commercial opportunity but sidestepping a sponsorship fee can be frustrating. We have to get over it, though (apart from moaning here), as any real challenge to this is probably unreasonable and self-destructive – I knew the London Online exhibition was on its way out when their registration page threatened to levy a fee on visitors who were ‘caught selling without a stand’.

We haven’t yet offered an exhibition area at R2R. As a former salesperson, I’m dubious about the value of exhibits at conferences, having spent many hours lurking in a booth or standing behind a table of brochures, while the people I wanted to speak to were in away in presentations or having coffee with their peers. The notorious American Library Association event in Boston, where the exhibit hall and the conference center were 2 miles apart, was particularly frustrating! I encourage commercial people to just be part of the participant community, and recognize that much of the value in attending comes from participating, learning, and conversing, as a genuine member of the community, not just being someone with a sales script (both during the event and afterwards). But they should sponsor us as well!

Online conferences present new challenges and opportunities. Sponsors tell me that just having their logo on a registration page and a webinar menu is very poor value, and I agree. I think it is essential to create online opportunities for sponsors to show off their wares and to engage directly with delegates. Despite my misgivings, we are now offering online exhibit areas, gladly replacing the bag full of brochures. We have also added optional Lightning Talks to our program, and opened these up to sponsors and other commercial organizations, while making our delegates aware of what sort of presentation they may be choosing to attend.

The bottom line is that sponsors and exhibitors contribute vital funds to an event, and really need to be cossetted by organizers and acknowledged by delegates.

In Conclusion

So what is the right value proposition, what does that cost to deliver, and what will people pay? And how is this changing in our current shift towards online? The answer is, of course, “It depends”.

There is a future for ‘online content delivery’, with menus of material, low levels of interactivity, and time-shifting through on-demand streaming. This can be delivered at relatively low cost, and so offered at a low price to a broad audience. There are signs, however, that people are already jaded by the passivity of this experience, and frustrated by low production values and poor technology.

For many people, the real hunger right now is for collaborative Conversations around well-curated Content, in an environment where Comfort is an enabler. This is what I think real conference value is about. But the labor needed to develop and deliver this is high, and the costs of high-quality physical and online venues are significant. Unless heavily subsided by founding organization or sponsors, this has to be paid for somehow, and so prices for these experiences (whether online or physical) may have to continue to be what they were before the pandemic.

I am concerned, however, that the past year’s urgent pivot to online webinars, with consequent reductions in cost, value, and price will fuel an expectation that risks provoking a spiral to the lowest possible price and quality combination, unless people start to demand (and pay for) a real conference experience again.