Events are extremely difficult. You should do them anyway.Steve Yaeger, Minneapolis Star-Tribune,
This is a series on Better News to a) showcase innovative/experimental ideas that emerge from the Knight-Lenfest Newsroom Initiative and b) to share replicable tactics that benefit the news industry as a whole.
This “win” comes from Steve Yaeger, vice president and chief marketing officer at the Star Tribune in Minneapolis-St. Paul. You can also hear all about it on the It’s All Journalism podcast.
Question: What problem were you trying to solve, and why was solving the problem strategically important for your organization?
Answer: The fundamental problem in our business is, simply put, declining print advertising revenues. The way that we have tried to address that challenge over the last several years is by thoughtfully adding new initiatives each year to “replace” the print advertising losses. Events have been a significant part of that strategy.
Q: How is this approach related to Table Stakes (e.g. one of the 7 Table Stakes and/or an outgrowth of the Knight-Lenfest initiative, etc.)?
A: At its core, Table Stakes is about audience-centricity. In Cohort 1 we eventually began to grapple with the ways online and offline audience-focused efforts can intersect and reinforce each other.
More specifically, events align with Table Stake #1 (serving targeted audiences with targeted content), Table Stake #4 (using audience funnel discipline to deepen engagement with occasional users), and Table Stake #5 (diversifying revenue from the audiences we build.) Events also support newsroom objectives when they create social media moments or generate content that can live online.
As a marketer, I’m trying to drive people toward making a decision for Star Tribune—and then sticking with us. Memorable in-person experiences and face-to-face interaction will always lead to deeper connections, which we hope influences consumer behavior.
Q: How did you go about solving the problem?
A: Events certainly aren’t “solving” our revenue challenges by themselves. But they help, and have become a material and dependable contributor to our bottom line.
Like many news organizations, Star Tribune has long been involved in local events, but mainly as a sponsor lending our brand to others’ efforts. We began experimenting with “owned-and-operated” events in 2015. Our goal initially was to test the market, and to test ourselves in terms of our operational capabilities and promotional effectiveness. We’ve built on our initial success by adding one or two ambitious events and a few more modest events each year. We’ve also retired a few events along the way when they’ve failed to deliver the margins we’d like.
I sometimes bad-mouth events but it’s tongue-in-cheek. What I’m really trying to do is keep people focused on the best opportunities. Events can be high-risk, low-margin, and resource-intensive. We can’t afford to lose money speculating on things that might work. We have to be very selective and very disciplined in our evaluation process.
We look at new event ideas all the time. Some bubble up internally, some are brought to us by partners or potential partners. In evaluating them we follow a process that minimizes risk and, we hope, steers us toward the mostly likely winners.
- First, we look for a gap in the market. Minneapolis-St. Paul is a heavily ticketed market, with five pro sports teams, several minor league teams, a Big Ten university, two orchestras, a thriving music scene, and more live-theater seats than any market outside of New York City. We’re also a destination for major concerts and traveling events—think X Games, Cirque du Soleil, NCAA championships. So there’s a lot of competition here for consumers’ time and money. On one hand, that’s good for the Star Tribune; all those organizations and events have to advertise to promote themselves. But it’s challenging enough to get consumers out of the house, now you have to get them to choose you over everything else. It has to be a very compelling offering.
- Second, we look for brand alignment. Would a proposed event reflect well on us, or could it detract from or damage our brand? This test screens out ideas that might work well for someone else, but aren’t a fit for us.
- Third, is the proposed event related to a coverage area? Do we regularly write about it? Do we have expertise or access that gives us an advantage? Would it make sense for our journalists to be involved? Tie-ins to our coverage create more opportunities to stand out, to create something unique.
- Fourth, what is the attendance potential? Will it draw an audience that’s meaningful for a sponsor? What is the potential for ticket revenue? We try to “size” the event, to understand if its natural audience is 200 people or 2,000 people. Then we ask, “Do we think we can cost-effectively attract that number of attendees?” You have to be dispassionate in assessing this. Sometimes the answer is no and we fold, even though we like the concept.
- The fifth and most important step is analyzing the revenue potential. We are very good at this, and we look at three distinct sources of revenue: ticket sales, sponsorship revenue, and associated ad revenue. Many of our events are tied to special sections or coverage, and to “buy in” to the event as a sponsor one has to commit to a package that includes advertising. (We only attribute this revenue to the event if we can honestly say if we were not doing the event we would not get the dollars.)
- The sixth and final step is to evaluate the execution risk. This is where we pause and ask: Can we pull it off? Have we considered all the costs carefully, accurately assessed the staffing needs, engaged the right partners, accounted for weather, and so on? If we’re confident we can execute, we move forward.
Using these criteria we probably discard 10 ideas for every one we green-light. From a standing start in 2015 we’ve created a line of business that generates revenue in the low seven figures with healthy margins and solid growth.
Q: What worked?
A: Obviously, not all events are created equal. At Star Tribune we plan around six specific event types. They each have unique characteristics and distinct objectives, and so we have different expectations for each type, in terms of outcomes .
At one end of the scale, we have our tentpole events, where the attendance expectations are in the hundreds or thousands and the revenue expectations are into six figures. Our focus here is on top-line revenue and profitability. Examples include our consumer travel expo, the Top Workplaces program, and the all-metro high school sports awards.
At the other end of the spectrum we have events that try to capitalize on niche coverage, newsroom personalities, or a moment in time. For these, an audience of 100 or revenue of $10,000 might meet our expectations, because our emphasis is on engaging new audiences or delighting subscribers. These include our Photos of the Year event and our holiday cookie contest, and smaller events like neighborhood walking tours where reporters discuss history or architecture.
The key, I think, is to identify distinct categories of events and the objectives for each. This helps to prioritize, to create shared expectations for all the collaborators, and, importantly, gives you a framework for celebrating even “small” successes.
Q: What didn’t work?
A: Because of our selection criteria and my own inherent fear of “flops,” our approach could be considered conservative. I want to minimize failure because in events failure is expensive and potentially embarrassing. But not everything has worked perfectly.
When we moved to the new Star Tribune Building in 2015, we were excited to launch a series of events in our spacious ground-floor atrium. Imagine newsmakers on stage with our journalists; for example, a panel with the president of the Minnesota Twins in conversation with our beat writer and columnist on opening day. These events drew huge noontime crowds, but suffered from an insurmountable problem: terrible acoustics. After several well-attended but hard-to-hear events, we pulled the plug. We still do events in our atrium, but only events that don’t involve people speaking and amplified sound.
We cancelled another annual event called the Star Tribune Arts Forum after two years. The Twin Cities has a thriving arts scene—visual arts, performing arts, the full spectrum. This event put four arts leaders on stage with our critic in a wide-ranging “state of the arts” discussion. We had good attendance and the target audience of arts professionals and patrons loved it. But we couldn’t nail down a sponsor and thus couldn’t get the event into the black. It was an operational success and good for our brand, but you could say it “failed to thrive.”
We have a few other events that are currently on the bubble—they will either find their next gear or we will retire them and put our attention elsewhere.
Q: What happened that you didn’t expect?
A: As our portfolio grew and we began to analyze the financial performance of our events individually and as a group, we realized that a sizable portion of the profits was coming not from the events themselves but from the associated ad revenue. On their own, the events deliver margins in the range of 10–15 percent. When accounting for associated ad revenue, margins are north of 60 percent. A good example is our Top Workplaces program. The celebration luncheon honoring the recognized companies is a sell-out every year with 650 paying attendees, but is slightly better than break-even. But the special coverage, which is inextricably tied to the event, delivers more than a quarter-million dollars in print and digital ad revenue. So now we try harder to create opportunities that drive associated ad revenue.
Q: What would you do differently now? What did you learn?
A: We are learning all the time. One area for improvement that we’ve identified is sponsorship selling. We have a talented sales team, but selling sponsorships is fundamentally different from selling advertising and digital marketing solutions. In many organizations the decision makers and their priorities are different.
Q: What advice would you give to others who try to do this?
A: Four things:
- First, be guided by your market and its unique characteristics. What works in Minneapolis-St. Paul or Denver may not work in Sacramento or Omaha, and vice-versa. For example, we see so-called “ideas festivals” work well in other markets, but have seen several bomb here. I would love to launch an ideas festival in our market, but I don’t think we can do it any better than those who have already tried. Understanding and accepting the “event context” of your market helps you minimize failures and speeds your path to success.
- Second, you might have to help others in the business adjust their expectations around margin. An event with 25 percent margins is a very successful event, but those used to expecting 70-plus percent margins on advertising may not see it that way.
- Third, if you’re just starting out you can experiment and bootstrap it for a while but eventually you have to manage your events efforts as a line of business, with all the necessary roles, skills, and processes. You have to develop a P&L and hold your team accountable for delivering profitable results—if not for every individual event, certainly for the portfolio.
- Finally, cut your losses quickly. There might be many reasons an event doesn’t work the first time out. But if it doesn’t work the second time the market is telling you something. Listen.