Virtual worlds such as SimCity and Second Life have long provided an outlet for socializing, traveling — even shopping — without actually being there. Now virtual conferences are catching on in the financial industry as a cheaper and more convenient alternative to the real thing.
Picture a computer-generated three-dimensional convention center with a younger and more attractive version of yourself trolling the rows of booths.
Stop by a booth for a chat in real time with a company representative and quickly download brochures and white papers right to your computer. Move on to presentations by industry luminaries and panel discussions without having to fight the crowd. Hand out virtual business cards in a networking lounge.
All this is now possible with increasingly sophisticated technology from Linden Lab, the creator of Second Life, which has developed an application called Second Life Enterprise just for business use.
While most advisers and financial services firms (which do not have the costly hardware) will not be experiencing such elaborate scenarios anytime soon, there are positive signs ahead.
Erica Driver, an analyst with the information technology industry research firm ThinkBalm, said that change is coming as powerful PCs are getting more affordable.
“To have a good experience, [virtual-conference] attendees need to have higher-end PCs with good graphics capabilities,” she said. “You can't have both right now, but we will see them coming together over time.”
SIGNIFICANT GROWTH SEEN
The GigaOm Network, another technology research firm, also predicts that the virtual-conference industry will grow significantly in the next few years.
In “Virtual Worlds for the Enterprise Market,” a report published in October, it projected that by 2014, the industry will have annual earnings of between $8 billion and $10 billion.
But until then, a group of small “virtual-events” companies — InXpo Inc., On24 Inc. and Unisfair Inc., among others — are stepping in to fill the void.
While the online meetings hosted by these companies are nowhere as elaborate as Second Life's, they go well beyond the simple webcast to create an environment that somewhat replicates the look and feel of a live meeting.
Advisers can step into a two-dimensional conference center with booths displayed on-screen. With the click of a mouse, they can move around the virtual exhibit hall and watch live video of a keynote presentation.
Many vendors now prefer virtual conferences over live events because they no longer have to spend substantial sums to build booths, and transport materials and staff to the site.
Online conferences also require less planning and often attract larger numbers of attendees than live events. And in most cases, existing technology can handle even large, complex gatherings.
For example, Cisco Systems Inc., the giant telecommunications and technology company, went completely virtual with its annual sales meeting this year. The meeting, called the Global Sales Experience, or GSX for short, had more than 19,000 attendees from 104 countries (in 24 time zones) who tuned in for more than 88 hours of back-to-back sessions.
Even more impressive was the effect on the bottom line: Cisco said it realized a cost savings of 90% by holding the event online.
Similarly, ThinkBalm's Ms. Driver noted, petroleum giant BP PLC switched to a virtual format for an annual meeting that once cost it $5 million to hold, saving 90% of that cost.
At the same time, companies such as InXpo are also holding many more events. CeCe Salomon-Lee, director of marketing for the company, said that InXpo, founded in 2004, has hosted more than 500 events this year alone — nearly as many as it did in its first four years combined.
“Due to the economy, a lot of physical conferences were being canceled, but companies were looking for a way to meet in some other way to keep costs down,” she said.
That trend even has extended to investors and financial advisers.
Matt Schifrin, vice president and investments editor at Forbes Media LLC, said that his company used to set up booths at investor conferences but never achieved the desired return on investment.
Forbes organized its first virtual conferences in 2008, and more than 13,000 investors attended. It has since held four others — two more for retail investors and two for financial advisers. The investor conferences averaged 4,000 participants, and the adviser conferences averaged about 2,000.
“We've gotten some expertise on these,” Mr. Schifirn said. “It's like 98% of the folks say they love it.”
InvestmentNews held its first virtual conference this month, drawing more than 2,500 advisers from across the country for a one-day trade show called ETF Insights.
“Great way to attend a conference,” adviser Doug Holden, owner of First Light Financial, wrote from the conference networking lounge during the show.
HARD TO FOCUS
While industry experts predict growth for virtual conferencing, some advisers said the lack of face-to-face interaction can make it more difficult to focus on the agenda. They pointed out that there is a greater likelihood of potential abuse by advisers seeking continuing-education credits, because with such remote sessions, there is no one to monitor whether someone is present — let alone paying attention — at the other end.
And of course, there are frustrating technical glitches.
At the recent Forbes.com LLC's Financial Advisor iConference, some advisers were abruptly disconnected from a session on trends in regulation and compliance. And at the
InvestmentNews event, a handful of advisers couldn't hear or see the keynote address by Bill Gross, Pacific Investment Management Co. LLC's managing director and co-chief investment officer.
Of course, both sessions were recorded and archived online, along with other conference materials, to allow attendees to replay them after the show.
E-mail Davis D. Janowski at [email protected].
