What is Meetup’s economic impact?
We know that tons of Meetups happen every day in bars, cafes, restaurants, and theaters. Then there’s the play dates, running meets, parties, workshops, conferences, and everything in between.
Ever wonder how much Meetup members are spending on Meetup-related activity every year? Meetup’s strategy team did, so we took a couple of hours from our day-to-day research projects to answer the question.
Our goal: Get a rough estimate of the economic impact of the 2+ million RSVPs and 330,000+ Meetups that happen in a given month.
To tackle this Fermi problem, we split into two teams with different strategies for answering the question.
Strategy #1: Measure the stuff we’ve got data for. Sample the rest. Extrapolate.
This team consisted of our Lead User Experience Researcher, Anna, and our Data Analyst, Chris.
Chris ran through our data on actual transactions recorded on Meetup’s systems for recent RSVPs.
Meanwhile, Anna sampled a few hundred recent Meetups to try to get a sense of the average amount of money a single attendee would wind up spending. The range was very wide, from nothing at all to hundreds of dollars.
Results: About $14 million a month spent by Meetup members overall, with an average of about $9 per RSVP across all the events sampled.
Strategy #2: Make some assumptions about our data and see where that takes us, with a dash of language processing fun.
This team consisted of our Data Analyst Randy, and a big pot of tea.
Let’s assume that when members go to bars, restaurants, and golf courses, the words in the name of a place give us a hint as to what they’re doing and how much they might be spending.
When we associate the words from the name of the Meetup location with the median prices charged by various Meetup Groups going to those places, you get a rough price list that’s surprisingly believable. For example:
- “bar” – $10.00 per RSVP
- “cafe” – $8.75
- “campground” – $18.50
- “cinema” – $9.00
- “club” – $15.00
- “coffee” – $5.00
- “grill” – $10.67
- “massage” – $15.00
- “restaurant” – $12.14
- “tasting” – $29.11
- “theatre” – $16.79
- “yacht” – $26.69
- “ymca” -$20.00
We used six months of Meetup data, February 2012 to July 2012.
We controlled the data so that no one Meetup Group could dictate the median price of a word, and we only considered prices in US$, to keep things simple.
Then, we quickly combed through the list of most popular words by hand, keeping only meaningful words. (Sorry, “the”—we don’t believe you cost $13.86.) In the end, we came up with a list of 141 words and prices.
Next, we looked at all the Meetups that happened in July. As we went through each Meetup, we used the first rule that applied from this list:
- Organizer listed a fee and accepted payments via Meetup’s ticketing system: assume 100% of RSVPers paid.
- Organizer listed a fee but accepted cash at the location: assume 66%* of RSVPers paid.
- No listed fee: check the name of the venue. Assume 66% of RSVPers paid the price of the most expensive word that matches.
- No listed fee, but there are dollar signs in the Meetup description: assume 66% of RSVPers paid the average $$ value written in the text.
- Everything else: assume it’s free.
* Anecdotal evidence gathered by being an Organizer and talking to other Organizers suggests that it’s common to see about a third of ‘Yes’ RSVPs no-show to Meetups that don’t have attendance policies.
Of course, rule #4 probably over counts economic activity for a Meetup. You can talk about money in all sorts of ways that don’t involve spending it. We also know that rules #3 and #5 under count activity. There’s no way to cover every possible variation on restaurant and bar names across the world with just 141 words. Plus, it must cost at least some small amount to travel to a Meetup. But for our purposes, we’ll assume that the errors cancel each other to some degree. We’ll be closer to the truth by including rules #3-#5 than we will by excluding them.
Results: About $13 Million for the month of July, a bit over $6 per RSVP.
That’s quite close to the number Team #1 found. (With this method, no-shows were more explicitly accounted for, which drops the average.)
Allowing for errors and seasonal differences, it all adds up to a pretty impressive number:
The current economic impact of Meetups is roughly $100-150 million a year.
Not too shabby. And considering that Meetups have been growing like crazy this year, that number’s sure to go up in years to come.