The final of 4 special articles on Strategic, Business and Competitive Pressures impacting events and tourism
How do we tackle this big beast? I’d like to suggest an approach, a business model, for the business of events.
2. New platforms
1. Convergence and in particular Events Convergence implies understanding the complexities of multi-faceted business in a global market and by market, by demographic, by event, merging our expertise and then marketing it. We have to show it to them, show it to them, and show it them. We should create clout and composite solutions in core areas such as risk management, project management, governance, business and event readiness and the commercial viability, indeed livelihood, of projects. We need to think differently, find new methods and most importantly, create new excitements … that means new events and attractions or ways of packaging the best we have.
We need more focus on providing value for money, for example by providing added entertainment and engagement. In many cases, sporting entertainment and commercial success are now seen as two sides of the same coin.
The sponsorship-investment spectrum is important, where government investment is significant, relative to the importance of sponsorship. The TTF has called for a Commonwealth whole of government major event coordination body. Sponsors’ dollars and their payback is a vital part of the business equation. Differing to Australia, in the US, sponsorship is larger by any measure. PricewaterhouseCoopers (PwC) suggest that global revenues from sports sponsorships will increase from US$35 billion in 2010 to US$45.3 billion in 2015, a 5.3 percent compound annual increase. Stripping out major events, growth in sponsorships for that period will average 6.4 percent compounded annually.
2. Platforms – Across the mix of tourism and events business there are 3 core platforms to in which we must take the undisputed lead: Technology, sustainability, experience
Technology: Look at digital and social media – with impacts ranging from awareness to conversion – and ongoing improvements in broadcasting and technology, which allow higher-quality coverage than ever before. At the same time, TV companies are embracing social media to engage with fans and deliver a greater intensity of experience. Deloitte’s new report on digital disruption provides some valuable insights.
Meanwhile, sponsors remain eager to contribute to and be associated with sports events and teams as part of their marketing mix. They are using sophisticated data mining to gain increasing levels of intelligence and insight into their target markets. While the traditional broadcast model is still responsible for generating the most income from media rights, engagement with fans is increasingly shifting towards new technology. In an era of 24-hour news and player tweets, fans want to know everything. Major international events such as the London Olympics and the FIFA World Cup football tournament in Brazil in 2014 boost media rights fees and sponsorship revenues in those years, and gate revenues and merchandising in the regions in which they are held. PwC projects that global sports market revenues will rise at a compound annual growth rate of 3.7% from US$121.4 billion in 2010 to US$145.3 billion in 2015…and by comparison, that BRIC market revenues will rise at a compound annual growth rate of 4.5% from US$8.3 billion in 2010 to US$10.4 billion in 2015. The positions of China and Brazil will grow from 35% and 39% in 2010, respectively.
Sustainability: This is not just doing the green thing. It sure does include 6 or even 7 star environmental ratings, the adoption of leading edge materials and technologies – but it is much more. Sustainability embraces social, educational as well as environmental improvements, it encompasses, for example, the east London regeneration, employment, new skills, sport participation, health goals, issues of equality. In Brazil, Rio is faced with the enormous challenge of considerable poverty set in the midst of their cities They are seeking to open the favelas with jobs, access to new jobs as the economic ‘ticket’ to the city, education, new technology and even a scheme to allocate property rights to what have been essentially squatters.
Sustainability must be underpinned by commitment and accountability.
In Australia, the Asia Football Cup in 2015, the International Cricket Cup in 2015, the G20 in 2014 and the Gold Coast Commonwealth Games in 2018 present great avenues for applying new ideas.
Experience – This is our big asset – understanding how to implement, deliver and excite, the ip of good experiences as well as the mechanics the real delivery.
3. Collaborations – In a different way, this also about clout. Collaboration opens doors, brings efficiency and effectiveness. It creates new spark. We need it, our companies need it – we find ourselves here and overseas up against some big critters, a new breed. So locally we need to collaborate, not just circle the wagons, but use our creativity and innovative capacity to take the high ground and push back. Companies that are in similar businesses need to draw together. Others with complementary services can achieve a wider scope with more appeal.
There is much to be learned from other businesses’ experiences. Look for a moment at Leightons, Worley, Brambles, GHD with multiple acquisitions, the announcement last week by Qantas of its tie-up with Emirates, Westfield with investments globally but with recent collaborations in Italy and in Brazil – and to the extent one can learn adaptability and new ideas, consider that Westfield has successfully incorporated top brands into their malls as well as supermarkets and Costco, who until now were adamant that they would only invest in stand-alone stores. There are reasons to diversify and reasons to stay focused. Each company’s management needs to determine their optimum route and palette – and build that mojo.
Finding a collaborative platform with an overseas operator, in your or their markets or for wider project marketing can add immensely to knowhow, provide real and speedy access to overseas opportunities and deliver network channels that would otherwise take years to gather.
This article is based on a presentation, State of Play: Australian Events on the World Stage, delivered by Eric Winton to the Australian Event Symposium 2012 – Finding our mojo: Creativity, innovation and the business of events, 14-16 September 2012. The presentation explored strategic, business and competitive pressures impacting events and tourism.
Eric is director at New Millennium Business, providing strategic, marketing and business activation advice to events companies in Australia and going global, targeting opportunities overseas.
Our speciality is the business of events.