Event Spending is No Laughing Matter

by Allan Rubin, Vice President, Marketing

It sounds like the opening of a very bad joke: “A clown, a mind reader, and a comedian walk into a hotel in Vegas.”

Unfortunately, it’s no laughing matter for the public officials, including GSA Administrator Martha Johnson, who just lost their jobs over an $835,000 training conference for 300 employees. According to a story in today’s Washington Post, the expenses “included $147,000 in airfare and lodging at the hotel for six planning trips by a team of organizers. Among the other expenses were $3,200 for a mind reader; $6,300 on commemorative coin set displayed in velvet boxes and $75,000 on a training exercise to build a bicycle.” Oh, and let’s not forget the comedian and the clown.

Apparently, President Obama was not entertained. The Post quoted White House Chief of Staff Jack Lew, who said the president “was outraged by the excessive spending, questionable dealings with contractors, and disregard for taxpayer dollars, and called for all those responsible to be held fully accountable.”

And it appears there’s more to come: the story noted the “resignations come as the agency’s inspector general prepares to release a scathing report on the training conference, held at a luxury hotel outside Las Vegas in October 2010.” Sounds like another large, floppy red shoe is about to drop.

Those who followed the recent “Muffingate” scandal know there’s usually more to these stories than meets the eye, and often what looks like waste really isn’t. I don’t know much about this specific event, and there may be another side to the story. We’ll find out if that’s true in this case.

Either way, those of us who make a living by marketing products and services to the government understand the importance of relationship-building through face-to-face events. Will increased oversight of government-hosted conferences trickle down to impact widely attended gatherings? Will attendance suffer at your seminars as a result of these recent issues? Will live events decrease in effectiveness as vehicles for lead generation, branding, awareness, and thought leadership? This part of the story caught my eye, and it’s consistent with other changes we’ve been tracking for the last few months:

“Accounting procedures are being revamped, and there will be more oversight over conference planners and contractors, [GSA spokesman Greg] Mecher said. All employees will be required to take mandatory training in conference planning. Travel budgets for several regional offices have been reduced, and future conferences in the western region, which hosted the Nevada event, were canceled.”

At immixGroup, we’re already seeing anecdotal evidence of smaller trade show audiences since September 2011 when, according to today’s article on GovExec.com, “the administration ordered all federal agencies to review conference spending in the wake of a report on potentially excessive spending on a Justice Department event.”

We’re finding more interest in online marketing activities, such as webinars and video. And we’ve had strong results from co-branded events that are led by third-party media companies and sponsored by multiple vendors. Luckily, we have the resources to help our clients adjust to these new realities. Many federal marketers don’t.

As always, we’ll keep an eye on this and let you know what we see. In the meantime, we recommend you follow this story as it unfolds. You should also brush up on your knowledge of the government’s ethics rules around events and widely attended gatherings, and make sure you comply with both the letter and spirit of the rules. Most of us are neither mind readers nor magicians. And nobody wants to look like a clown in front of the government.