Okaloosa County BOCC — February 27, 2014 — IX.h. Revised SMP Ad Agency — reading text

81 TOURIST DEVELOPMENT DEPARTMENT MEMORANDUM DATE: February 25, 2014 TO: Tourist Development Council FROM: Ed Schroeder, Tourist Development Department Director Charlotte Dunworth, Finance, Administration, & Compliance Manager SUBJECT: FY 2013-14 Strategic Marketing Plan Background All advertising/marketing expenditures shall be in conformity with the approved Strategic Marketing Plan and task order process per section D.200.2.c of the TDD Operations & Procedures Manual. The Board approved a $2.6M annual Strategic Marketing Plan on November 5, 2013. The adopted departmental budget in accounts that are classified as “promotional activities” according to the uniform chart of accounts totals $3.5M (excluding accounts for BP funds). This $900K difference is attributable to $534K in marketing activities performed in-house by TDD staff and $375K in special event and sponsorship funding. A Convention Center Local Strategic Plan was developed in August 2013, but an overall in-house strategic marketing plan outlining activities and expenses was not formally reviewed by the TDC nor adopted by the BCC. Details of budgeted in-house promotional activities amounts are not available. Consequently, payments related to in-house activities cannot be processed because they are neither included in the adopted Strategic Marketing Plan nor processed via task order nor itemized in the adopted budgeted. Discussion – Ad Agency Strategic Marketing Plan $2.6M The adopted Strategic Marketing Plan (SMP) included a line item for Co-Op Opportunities in the amount of $285,000. Due to low partner participation, only two co-ops targeting Canadian travelers were implemented. A new co-op with Southwest Airlines is being proposed, with the balance of funds proposed for reallocation to leisure media and television production to make a larger promotional impact for the taxing district. Meeting/Conventions and Groups have also been reevaluated. The revised SMP includes the originally adopted budget as well as the proposed revised budget. Changes are noted in bold for ease of comparison. The overall budget remains unchanged at $2.6M. Ad agency SMP expenses are paid via task order. A few aspects of the ad agency SMP warrant further explanation:  Television Production – Due to the reallocation of funding, television production can be incorporated into the SMP. Two :30 spots and two :15 spots will be shot, edited, and developed to launch in late Spring.  Last Minute Deals – Unanticipated marketing/promotional opportunities will likely present themselves during the year. To the greatest extent possible, such opportunities will be presented to the TDC for recommendation to the BCC for approval in advance. However, these funds are 1 of 3  82 available for appropriation by the Tourist Development Director with concurrence of the County Administrator if a time-sensitive opportunity would be lost due to the timing of regular TDC and BCC meetings required to obtain advance approval. Total cost of the opportunity must be less than $35,000 and County Administrator approval is required regardless of dollar amount. The TDC and BCC will be apprised of the use of these dollars at their next regularly scheduled meetings. Discussion – In-House Strategic Marketing Plan $534K There are several marketing efforts undertaken by Tourist Development Department staff. The Destination team attends trade shows throughout the year to promote the Emerald Coast area as a tourism destination. The Sales team attends trade shows and makes sales trips to promote the Emerald Coast Convention Center (ECCC) to meeting planners. The Events team ensures each client’s expectations at the ECCC are met or exceeded. The Film Commission markets the Emerald Coast to production and entertainment companies. There is $589K budgeted for in-house marketing and promotional activities, but only $534K is directly attributable to promotional accounts. In-house SMP expenses are paid via credit card or purchase order. A few aspects of the in-house SMP warrant further explanation:  Film Commission – The TDD has a contract in the amount of $38K with Gail Morgan for film commission services, which covers wages and travel (transportation, accommodations, meals, registration fees). Other expenses necessary to support Film Commission operations are paid directly by the TDD. The Film Commission was budgeted in a contractual services account, but is more appropriately classified as a promotional activity.  Burning Up the Beaches – The previous Tourist Development Director made a verbal commitment to L.A. Woodall to reimburse Horizons Foundation’s agreement with Masters Entertainment Group to produce a car show on location in Fort Walton Beach in 2013 and 2014. The two-year agreement totals $15,000 and each year has been included in the in-house SMP for TDC consideration. Legal counsel has advised the TDC may wish to honor the 2013 car show since services have already been rendered, but is under no obligation to honor a verbal agreement for 2014.  Entertainment Expenses/Meals for Meetings – Section C.500 of the TDD Operations & Procedures Manual provides for entertainment expenses when meeting with travel writers, tour brokers, or other persons connected with the tourist industry. Networking with local and out of area tourism industry professionals is an essential component of promoting the taxing district, and such activity may on occasion require the purchase of meals and non-alcoholic beverages.  Last Minute Deals – Unanticipated marketing/promotional opportunities will likely present themselves during the year. To the greatest extent possible, such opportunities will be presented to the TDC for recommendation to the BCC for approval in advance. However, these funds are available for appropriation by the Tourist Development Director with concurrence of the County Administrator if a time-sensitive opportunity would be lost due to the timing of regular TDC and BCC meetings required to obtain advance approval. Total cost of the opportunity must be less than $35,000 and County Administrator approval is required regardless of dollar amount. The TDC and BCC will be apprised of the use of these dollars at their next regularly scheduled meetings. 2 of 3  83 Discussion – Special Event and Sponsorship Funding $375K Section F of the TDD Operations & Procedures Manual provides up to $20K for each event that increases awareness of the Emerald Coast as a tourist destination and drives incremental room occupancy in the taxing district particularly during low or shoulder seasons. The adopted budget earmarks $375K for special events and sponsorships meeting the criteria of the TDD Manual. Moving forward, both the ad agency and in-house strategic marketing plans will be presented to the TDC for review, and adjustment as needed, on a quarterly basis at minimum to ensure the marketing/promotional opportunities reflect current needs to promote the area and increase lodging occupancy in the taxing district. TDC Recommendation to BCC Recommend approval of: 1) Revised FY 2013-14 Strategic Marketing Plan – Ad Agency 2) Adoption of FY 2013-14 Strategic Marketing Plan – In-House 3 of 3 October 1, 2013 – September 30, 2014 Advertising Agency Strategic Marketing Plan – Revised February 27, 2014 84  85 Marketing Plan Budget 2  86 Ad Agency Marketing Plan Budget Original Budget Revised Budget Research (ongoing visitor profile and economic impact study) $55,200 $55,200 Leisure Media $1,194,800 $1,371,629 Co‐Op Opportunities $285,000 $24,952 g and Conventions Meetings $100,000 $ , $86,971 $ , Groups $100,000 $70,320 Collateral, Campaign Production and Visitors Guide* $400,000 $507,115 Base Services/Travel / Reimbursement $ $465,000 $ $465,000 Last Minute Deals** $0 $18,813 Total $2,600,000 $ , , $2,600,000 $ , , *Due to the reallocation, television production – not previously a part of the plan ‐ will occur in the spring. Two :30 spots and two :15 spots will be shot, edited, and developed to launch in late spring. **Last Minute Deals reflects funding for unanticipated marketing/promotional opportunities that may become available March – September 2014. To the greatest extent possible, such opportunities will be presented to the TDC for recommendation to the BCC for approval in advance. However, these funds are available for appropriation by the Tourist Development Director with concurrence of the County Administrator if a time‐sensitive opportunity would be lost due to the timing of regular TDC and BCC meetings required to obtain advance approval. Total cost of the opportunity must be less than $35,000 and County Administrator approval is required regardless of dollar amount. The TDC and BCC will be apprised of the use of these dollars at their next regularly scheduled meetings. 3  87 Leisure Media Plan 4  88