Spending Analysis

When promoting an event in a venue, promoters usually need to spend on following items:

Flyers: $285 for 5000 (or 10,000 same price) 3x5 standard size flyers. For 4x6 postcard size flyers, the price increase to $456. This data is based on price list of a print company

Venue rental: depending on the size and the location of a venue, venue rental fees can vary a lot. Venue rental can come in two formats: one is flat rate and another is bar guarantee. Flat rate means promoter pay fixed amount of money to venue owner. Bar guarantee means promoters have to guarantee the bar get that money for serving drinks, otherwise promoters have to fill up the gap. A real example is: xxx club on Market St. at San Francisco cost $2,000 for bar guarantee. The legal capacity for the club is 200 but usually it can hold 400-500 people. (legal capacity is determined by how many doors a venue have, instead of how big space the venue has. Most venues usually put more people than its legal capacity allows)

Staff: security 10$/hour, Cashier $20/hour. Ticket taker: $10/hour. Depending how big the event is, the number of staff will change.

DJ: DJ price varies a lot. Average price for a DJ is $300-$700, while super DJs can cost $2,000-3,000 for one night.

Promotion: promotion spending looks flexible, but in fact we are told that promoters need to spend a lot of money on promotions, even when their parties are well_established To get an idea of how much money promoters need to spend on advertising, let's take a look at how expensive to advertise on print media.

Advertising Cost on some of our competitors

A smallest Bayguadian(weekly) ad cost $125 , a quarter page ad for $525, when full page ad for $2,000. This price is only offered when promoters sign a half-year contract, meaning 26 weeks (these prices were offered in September 2000 by Bayguardian). FREE magazine, a palm-size booklet for venue listings at San Francisco, claims it has 20,000 readership. Its cheapest ad, which is full page(5x5, palm-size) inside the magazine, costs $1,750. The second cheapest ad is $3,000, which is inside cover page (we actually got a list of their advertising price through our friends).

An Example

In order to get a rough idea of how much money need to spend on promotion, let's take an example of a party in a club with capacity of 200 people. Promoters should expect 400 - 500 people for that night since people come and go.

Flyers 285 + Staff $160 + DJ $500 = $945

If promoters can successfully bring at least 100 people to the party, bar guarantee will automatically be covered, since on average each person who walk in a bar is expected to spend $20. ($20 x 100 == $2000). This way promoters don't need to pay bar guarantee and their total cost other than promotion will be $945

In order to bring expected 400-500 people in, promoters need to start the promotion at least four weeks ago. Assuming they advertise on Bayguardian for four weeks, that would be $500 for smallest ad while $2100 for quarter page ad. On FREE magazine, it will cost promoters at least $1,750 for one month. In this case, promoters need to spend at least half of his money on promotion, in order to promote a successful party.

Conclusion

Although how much money promoters need to spend really depends, we believe any party that expect more than 100 people will have to do promotion (while a party with less than 100 people can probably spread by mouth). As our above example shows, promoters need to spend at least half of his budget on promotion. We therefore believe that promotion money is a big portion of event budget.