PERSPECTIVE COUNTS! Did you know that if you placed one dollar on top of another, a stack of one billion dollar bills would reach 6 miles into the sky?
In the State's current fiscal year, the Legislature had to close a deficit that reached 18 miles into the sky. That's why MLTA is appreciative of the fact that (thanks to your support) we were still able to help pass legislation providing $15 million in funding for Pure Michigan this year.
George Zimmermann, his talented staff and the professionals at McCann Erickson have developed a plan to make the most out of this year's "half-a-loaf." Travel Michigan recently issued it's plan for this year's campaign. MLTA has re-posted the memo from George below.
We encourage you to read it and carefully consider its implications for your business. Then we're hoping you'll ask yourself what you're willing to help do to ensure we secure $30 million for Pure Michigan for the 2010/11 fiscal year which begins on October 1st.
Save the date for this year's Michigan Lodging and Tourism Legislative Conference, set for September 22, 2010 at the Lansing Radisson Hotel.
Following is George Zimmermann's memo.
To: Michigan Tourism Industry Leaders
As you probably are aware, the final budget for Pure Michigan promotion in 2010 was approved by the legislature and signed by the governor in late March. Our total appropriation for 2010 is $14.9 million, half of the $30 million that had been appropriated for Pure Michigan promotion last year.
We spent $19.4 million of our $30 million 2009 promotion budget on advertising buys for spring/summer, fall and winter, $10 million of that on national cable TV for spring/summer and $9.4 million for regional advertising for the three seasons. The rest of the promotion budget in 2009 was spent on other marketing-related activities, such as public relations, publications, production and agency costs, search engine optimization and pay per click for michigan.org, social media channels, etc. No staff or administrative costs are paid from the promotion budget; they are funded separately from other MEDC line items.
Given our reduced appropriation this year, we worked with our advertising agency, McCann Erickson, to produce a plan that will generate the best results at this much lower funding level. The choice came down to this: we either abandon the national advertising momentum we created last year with our first-ever national cable TV campaign and fully fund regional marketing, or we put as much into a national spring/summer campaign as we can afford to this year to keep that momentum going while drastically cutting regional advertising.
On McCann’s recommendation, we opted for the latter for the following reasons:
1/ Spring/summer is by far our biggest tourism season by both volume and visitor spending, and it is also the season with the most potential to attract more distant visitors from around the country.
2/ According to our ROI research of our 2009 national and regional advertising, visitors to Michigan from outside the Great Lakes region spent 37% more per trip than out-of-state visitors from within the Great Lakes region.
3/ Due to funding increases in recent years, we have had significant advertising buys in our key regional out-of-state markets consistently for several years. While we believe reducing our advertising in our regional markets will reduce the results from these markets, we don’t think a one-year reduction in activity will completely undo the momentum in these markets, especially since the national cable TV advertising will be seen in these markets in 2010. We do believe it is essential we be back in our regional markets at full strength in 2011.
4/ If we abandoned national advertising after only one year of activity in 2009, we and McCann believe the impact of that advertising on the national market will evaporate quickly, and that we will be forced to “start over” with the broader national audience in 2011, wiping out any momentum from last year’s national cable TV buy.
In order to make a national cable TV buy happen this year requires some drastic changes as compared with our fully-funded 2009 Pure Michigan promotion effort:
1/ We had already canceled winter advertising in 2009-10, after just one year of such advertising in
2008-09, due to lack of resolution on our funding earlier in the year.
2/ We are canceling fall advertising this fall for the first time in five years.
3/ We are canceling all regional spot TV advertising in 2010.
4/ We are canceling all in-state billboards in 2010.
5/ We are canceling all production of new TV commercials this year for airing in 2011, dramatically
reducing production costs for 2010.
With these cuts, our total advertising spend will be $12.8 million in 2010, as compared to $19.4 million in 2009. Of the $12.8 million we are spending on advertising this year, $8.9 million will be for the spring/summer national cable TV buy, $2.3 million will be for regional advertising – less than a third of what we spent last year regionally, and $1.6 million will be for our share of the partnership advertising we are doing with destinations all over Michigan. The small regional buy this year (radio and billboards) will help support the partner advertising in our regional markets, which is half funded by private sector tourism organizations around the state. We are honoring all commitments to advertising partners.
The national cable TV buy will begin airing the week of May 3rd, the first week we could secure availability at a reasonable rate. We have three new TV commercials for the cable buy this year, commercials which were shot in 2009. The complete 2010 marketing plan will be presented at the Pure Michigan Governor’s Conference: Driving Tourism 2010, May 6 and 7, Grand Hotel, Mackinac Island. Click here to register for the conference:
http://www.milodging.org/node/1135
We strongly believe that maximizing both short term and long term growth in the Michigan tourism industry is directly related to attracting more distant visitors to Michigan, visitors who stay longer and spend more. And we know that there are tens of millions of Americans outside the Great Lakes region who know little or nothing about our outstanding, national-quality tourism product and have never even considered Michigan as a vacation destination. It is only through continued and consistent national advertising via our award-winning Pure Michigan campaign that we can reach Michigan’s potential to be recognized as one of America’s top vacation destinations. Maximizing that potential will result in millions of new visitors to the state who will spend billions of dollars at Michigan businesses, create thousands of new jobs and generate tens of millions of dollars in new state tax collections.
We remain optimistic that Pure Michigan will be fully funded at $30 million in 2011. If it is, we will be able to continue the national advertising we began in 2009 and will continue in 2010, while restoring the regional, winter and fall advertising which has produced such positive results in recent years.
I look forward to seeing you at the tourism conference in May!
George
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