Their Business Decimated by the Coronavirus, Israel’s Events Organizers Go Digital

Concerts, conferences and parties have disappeared with the pandemic, and many executives in the sector think it will be a long time before they come back, if it all

Adi Dovrat-Meseritz
Adi Dovrat-Meseritz
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Performers at a protest event in Jaffa organized by the Israel Choreographers Association, December 1, 2020.
Performers at a protest event in Jaffa organized by the Israel Choreographers Association, December 1, 2020.Credit: Meged Gozani
Adi Dovrat-Meseritz
Adi Dovrat-Meseritz

At the start of 2020, Yoni Saar was managing an event that included personalities no less than Vladimir Putin, Prince Charles and Mike Pence as part of the Fifth World Holocaust Forum. The occasion involved 700 people, among them 50 world leaders.

Since March and the onset of the coronavirus, Saar has been organizing Zoom conferences out of small studios. But he knows he can’t complain, because many of his colleagues in the events and sales-promotion business don’t even have that to fall back on.

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“You can’t imagine the trauma we’ve experienced, said Saar, whose company, Promarket, is among Israel’s biggest events organizers. “In a flash we went from producing Eurovision in Israel, events with international leaders, and television productions like “Kochav Nolad” [“A Star is Born” – Israel’s “American Idol”] to doing Zoom events,” he said.

“In May alone we were supposed to manage eight international events with 10,000 people. But it’s either closing the business or accepting that you need to change.”

Saar, who has been in the business for 30 years, has seen his revenues plunge 80% since the pandemic erupted to just 20 million shekels ($6.1 million) a year. Promarket has received some government aid that has narrowed its losses.

“We put 50 people on unpaid leave and reduced our head count to 30,” he said. “I haven’t been taking a salary since March. Until the coronavirus we were making very good money, but today we’re losing.”

One model Promarket has developed is to start off a Zoom conference with a main address and then break everyone into smaller groups. He’s still holding mini-conferences of no more than 25 people.

“That, of course, is a lot less profitable. Today, to stage a 100,000-shekel event we work a lot harder than we did for a 1-million-shekel event before the coronavirus,” Saar said.

Guy Beser said his Bluestone Group, which encompasses 13 events and sales-promotion companies, moved quickly to reinvent itself.

“We were a group that dealt with audiences and suddenly there weren’t any,” he said. “We started to work with studio technology and digital, and with building customer clubs and creating customer communities.”

Bluestone has produced concerts by Rihanna, Guns N’Roses and Bon Jovi in Israel, and festivals like Wow for Coca-Cola and Day Zero. But that’s all in the past.

“We have whole operations that have disappeared because there are no international concerts or big parties,” Beser said, adding that his 200-million-shekel annual turnover was now down about 70%. Bluestone’s full-time payroll has been cut to 15 from more than 100, with the rest on unpaid leave.

It would be worse, but Bluestone has well-heeled corporate customers like Intel Israel and the Central Bottling Co. (Coca-Cola Israel), Beser said.

The drop in Bluestone’s revenues is about in line with the industry average this year, according to data compiled by the market research firm CofaceBdi for TheMarker. Revenues for producing events are down between 85% and 90% this year, while those for sales promotions are down 25%.

Marathon effort

In 2019, the industry, which does everything from managing big corporate parties to concerts, conferences and exhibitions, brought in 1.32 billion shekels in revenues. Three-quarters of that came from events, but this year that segment is expected to yield just 123 million shekels in revenues.

About 160 companies operate in the industry, but half of all revenues are generated by the 11 biggest players.

“The business-events industry is one of the segments that has been hit hardest by the coronavirus, and it has brought other businesses down with it,” said Tehila Yanai, CofaceBdi’s co-CEO. “From the industry’s viewpoint, 2020 is going to be a lost year, while an end to the crisis, at least in the events segment, doesn’t seem to be in the offing.”

That’s what Tali Tavor is feeling. As CEO of the company Kapaim, she had been organizing major sporting events like the Cycle Tel Aviv bicycle race and the city’s nighttime marathon – events that today are impossible to hold.

So Kapaim has adjusted to the new era by producing digital marathon events. “Recently we did a digital Life Run event for [the Israeli drug store chain] Super Pharm, and in February it will be the 13th year of the Samsung Tel Aviv Marathon, but this time in a digital version,” Tavor said.

The company has also begun house-to-house events and is taking responsibility for activities once consigned to subcontractors.

“For Coca-Cola, we produced an event of distributing bouquets and bottles to grandparents,” she said. “I now do the kind of logistics I never thought I would do – we’re now handling, for example, distributing prizes to the winners. This is something I would have outsourced before the coronavirus, but now we’re doing everything possible to revive the business.”

These kinds of events are expected to become the new normal in the business even after the crisis, sources said. Clients such as Sivan Neumann, marketing manager for Check Point Software Technologies for the Middle East, have come to appreciate smaller and online events at lower cost.

“At digital events we stage today we reach large numbers of people. We can bring the most prominent speakers in the world to them more easily because we don’t need to fly them in from all over the world for a one-hour lecture,” Neumann said.

“Although the participants aren’t the captive audience of a three-day conference, the purpose of these events is to create business interactions that will eventually translate into a sale. We’ve seen that more such interactions have been created the way we do it now.”

To make digital events more attractive, since participants aren’t enjoying meals and outings, Check Point has added teasers. “Before a talk on cybersecurity, we held a workshop with an Israeli chef in Madrid and sent the participants the ingredients of what was being prepared so they could cook together,” Neumann said.

“Another time, we sent participants a locked package and asked them to try to open it before the event. These kinds of things are aimed at heightening interest and encouraging people who have registered to become active participants.”

Neumann said that in the post-COVID era, events would probably be a hybrid of physical and virtual. “A lot of people will continue to work from home even after the crisis, and a lot of companies will opt for virtual conferences for their employees instead of sending them to events overseas,” she said. “It’s a model that will definitely stay with us because it involves less time and work, and it costs a lot less.”

Virtual beauty

Gali Berger, head of communications and content at Super Pharm, said the coronavirus has accelerated the process already underway of more personal and intimate communication between company and customer.

“Still, the crisis has also caused people to long for human contact and the rubbing of shoulders we had at concerts and events,” she said. “Companies will want to resume events, but it’s not clear that all of them will be able to. A lot of companies will need time to recover from the crisis and they won’t be able to budget millions of shekels for events.”

Berger said that for get-togethers in the well-being segment, physical events will remain the preferred option, but for beauty events, where trends are being led by Instagram and other social-media mainstays, virtual events will probably become the norm.

In the food-and-beverage industry, a major customer for the events industry, the general feeling is that big events won’t be coming back anytime soon, certainly not in the old format.

Last year, for instance, Coca-Cola Israel hosted the three-day Khao San festival of Thai street food that drew 50,000 people. “This year we’re doing it online and offering people to order meals at attractive prices,” said Shelly Shamir Keinan, vice president for marketing.

“We weren’t able to stage our summer events this year in their ordinary format and instead we did our flower-distribution operation. I can’t say for sure whether this summer we’ll be holding big events with lots of people. Big events will return, but I’m not sure it will happen in 2021.”

What does that mean for the hundreds of events employees on unpaid leave? The majority of executives who spoke to TheMarker said they weren’t sure all of them would be returning to their jobs anytime soon, if at all.

“We once operated according to a strategic plan; now we work from day to day,” said Tavor, the CEO of Kapaim, who has brought back 15 of 60 employees from unpaid leave. Saar of Promarket added: “No one really knows what will be and if we’ll be able to bring all our staff back.”

Bluestone, on the other hand, is more optimistic. “With the vaccine coming, I think around April or May, we’ll be able to talk again about controlled public events based on immunity approvals or quick testing,” Beser said. “When that happens, we can bring back all our employees.”

But not all the companies in the business will have survived, he added.

One company that has taken the changing times to extremes is Target Market, which in recent months has started offering companies, in conjunction with Sheba Medical Center, serological testing for their employees.

“In the last few years, apart from events and productions, we’ve been managing corporate operational systems,” said Miri Sinai, one of Target Market’s partners. “We took our logistical and managerial capabilities to conduct serological tests for big organizations.”

This business has now been taken nationwide together with Sheba and has brought back all its employees from unpaid leave and taken on hundreds of others for its new activities. Today it employs 150 directly and another 650 as subcontractors.

Nor has Target Market left the events business behind: It recently produced an event in Dubai for Bank Hapoalim and the Israel Export Institute.

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