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HomeMy WebLinkAbout09/04/1990, 5 - CONSIDERATION OF RECOMMENDATIONS FROM THE PROMOTIONAL COORDINATING COMMITTEE FOR THE 1990-91 ADVERT II City of sa l ao bs ompo MEETING DATE: 9-4-90 (TEM NUMBER: IIINCom COUNCIL AGENDA REPORT FROM: Ren Hampian, Assistant City Administrative Officer Prepared By: Deb Hossli, Administrative Analyst SUBJECT: Consideration of recommendations from the Promotional Coordinating Committee for the 1990-91 Advertising Contract. CAO RECOMMENDATIONS: 1. Consider recommendations from the Promotional Coordinating Committee and determine appropriate funding levels for the City's 1990-91 Advertising Contract. o 2. Authorize the City Administrative Officer to execute a contract with S.J. Francis and Associates for advertising services once action has been taken on funding levels for the contract. DISCUSSION: Background During the June 19, 1990 meeting, the Council considered funding recommendations from the Promotional Coordinating Committee (PCC) for the 1990-91 Promotional Program. During the meeting, the Council approved contracts with the Chamber of Commerce and San Luis Obispo County Visitors & Conference Bureau for visitor and promotional services. The final component of the Promotional Program, the advertising contract with S.J. Francis, was not approved. Several questions were raised by the Council regarding the focus of the advertising contract, how advertising monies have been used in the past, the contract's relationship to the rest of the promotional program, etc. As a result, the Council delayed taking action on this component of program and requested staff to provide additional information. Before staff had an opportunity to respond to the Council's request for additional information, however, the smoking ordinance was brought back to Council for final approval. During this discussion, the Council agreed that consideration should be given to reserving a portion of the 1990-91 advertising monies to promote San Luis Obispo as a "smoke free City". The Council liaisons to the PCC, Mayor Dunin and Councilmember Pinard, were directed to work with the PCC to develop a proposal for the Council's consideration. The Council felt that using a portion of the monies set aside for the 1990-91 advertising contract would help to mitigate any potentially negative impacts arising from the implementation of the smoking ordinance. This report contains additional information on the advertising contract as requested by the Council and provides recommendations responding to Council direction to consider incorporating a "smoke free City" theme into the City's advertising campaign. S-/ �� ►i��11811IIP° "�q�1i� city of San Luis OBispo MaZe COUNCIL AGENDA REPORT , Response to the Council's Request for Information on the Advertising Contract The. PCC felt it could best respond to the Council's request for additional information on the advertising contract by providing a more . detailed explanation of its purpose and showing its relationship to the City's overall Promotional Program. The Promotional Program has traditionally been carried out through four, one year contracts with local firms for promotional and advertising services. Funding for the program has grown from $125,000 in 1985-86 to just under $200,000 for 1990-91. Program funding is placed in the Community Promotions Budget and derived from a Council approved formula of 20% of the transient lodging tax, 2% of the sales tax, and 15% of general business taxes. The advertising contract, held by S. J. Francis & Associates for the last three years, represents one component of the City's Promotional Program. The purpose of the contract is to develop an advertising campaign that encourages overnight travel to San Luis Obispo from other parts of California. Overnight tourism has been a focal point of the campaign for many years because of its relationship to the transient lodging tax collected by the City. Our program has typically targeted the entire State of California, with special emphasis placed on the San Joaquin Valley and southern California. Based on staff research, the advertising contract has been handled in a manner similar to this for at least seventeen years. The Chamber of Commerce holds two of the Program's contracts, one for visitor services and one for promotional services. The visitor services contract represents the City's contribution toward the operation of a full service Visitors Center located at the Chamber of Commerce and open to the public seven days a week. Staff at the Visitors Center provide tourists with information about the City and includes responding to written and telephone inquiries, distributing maps and promotional literature, and maintaining information on the local economy, recreational facilities and cultural events in the City. The Chamber typically responds to over 200,000 inquiries regarding San Luis Obispo a year. The Chamber's promotional contract is used to cultivate long-term relationships with the media geared toward securing free promotion of the City. The success of this program is measured by the PCC through the number of articles and editorials on San Luis Obispo that appear in popular travel magazines such as Sunset and Travel and Leisure (these are reported to the PCC on a monthly basis) . The Chamber accomplishes this through sending out press releases throughout the State on a regular basis to travel magazines or newspapers describing local events of interest. Responses to the press releases are followed up with offers of assistance to gather additional information or provide photographs to accompany an article. r J•� �n��► �i��IIIIfIUI►►'i�lil city of San tins OBISPO -QMIZ@ COUNCIL AGENDA REPORT A final contract is held with the San Luis Obispo County Visitor's & Conference Bureau (VCB) . This contract represents the City's contribution toward an overall marketing of the central coast as a tourist destination. This is accomplished through a combination of direct advertising and promotion. Each of the contracts is structured to interrelate with one another and in combination represent the City's total efforts to encourage tourism in San Luis Obispo. One of the PCC's highest priorities is to insure that the contractors work together closely so that the City receives the greatest benefit for its promotional dollars spent. In summary, the PCC feels that it has created a successful Promotional Program that the City can be proud of and recommends that the Council approve the S.J. Francis contract being considered tonight (see attachment 1) . Advertisina Contract Recommendations Once the PCC learned of the Council's interest in possibly incorporating the "smoke free City" theme into the City's advertising campaign, a. meeting of the PCC's advertising subcommittee, the Chamber of Commerce, S.J. Francis and the Council liaisons was scheduled to discuss the most appropriate approach to respond. During this meeting, the group agreed that it would be more beneficial and equitable to the City's overall business community if a portion of the advertising contract was used for advertising the City regionally (to other cities and communities in the county) as opposed to promoting the "smoke free City" theme. Advertisements could be developed that encouraged residents from other parts of the county to dine, shop and visit San Luis Obispo. At the conclusion of the meeting, the group directed S.J. Francis to revise her advertising proposal to include a component devoted to regional advertisement. S.J. Francis presented her revised advertising proposal to the PCC during their July meeting. (It is important to note that the revised proposal is basically the same proposal considered by the Council in June of this year with the addition of a regional advertising component. ) Under the revised proposal, Ms. Francis recommends that a minimum of five thousand dollars be set aside to develop a regional advertising campaign. She also recommends that a radio campaign be used as it represents the most effective and least costly approach available. A $5,000 budget would allow Ms. Francis to run approximately 180 radio spots throughout the year. As mentioned earlier, the campaign would focus on encouraging residents from other cities in the county to dine, shop and visit San Luis Obispo. The PCC unanimously approved Ms. Francis' revised advertising proposal and directed staff to forward their recommendations to the City Council. As part of that action, the PCC recommended that the regional advertising program, estimated to cost $5,000, should �p� ii�illllfl�l►i" ��lil city of San LUIS OBISPO RVIGe COUNCIL AGENDA REPORT be funded in addition to the PCC's recommended budget for the regular advertising contract ($80,850) , bringing the total contract to $85,850. It was the PCC's opinion that while they were very supportive of a regional advertising program, it was also important to maintain the marketing position that has been. established under the City's existing advertising program. CONCURRENCES: The Chamber of Commerce concurs with the PCC's recommendation. The Central Coast Chapter of the California Restaurant Association has not taken a formal position on the PCC's recommendation. However, the Chapter's new President, Mr. Robert Holly, has _ indicated his support for the recommendation. FISCAL IMPACT: As discussed during the initial consideration of the Promotional Program in June of this year, the PCC recommended that the Council award the advertising contract. to S.J. Francis & Associates at a cost of $80,850. This represented a 10$ increase over the prior year's funding level and was requested to offset rising advertising expenses. Because the Council has only budgeted $75,700 (which represents a 3% increase over the 1989-90 budget) for advertising . -- services in 1990-91, awarding the contract at the recommended level would have created a shortfall of $5,150 and resulted in a need to appropriate monies from fund balance available in the Community Promotion Budget. With the PCC's most recent recommendation to provide full funding for the revised proposal, which includes . the City's regular advertising campaign along with the regional advertising campaign (estimated at $5,000) , the shortfall increases to $10,150. Therefore, if the Council concurs with the PCC's recommendation, it will be necessary to appropriate $10,150 from the Community Promotion Budget's Facilities Reserve. ALTERNATIVES: Number one: Fund the Advertisina Contract Within the Budgeted Monies Available for 1990-91 Under this alternative, the advertising contractor would receive a 3% increase in funding as provided for in the 1990-91 budget. The regional advertising program and rising advertising costs would be absorbed within the $75,700 budget. If the Council chooses this alternative, S.J. Francis would receive $75,700, or $10,150 less than the PCC's recommendation for funding. As a result of this loss of funding, Ms. Francis* would reduce the firm's regular advertising budget by $10,150 or 201. This reduction would result in the loss of up to four advertisements in major travel magazines. The PCC is not supportive of this alternative. r J- ��� iic!il►►I(iVIinU1°►��Nlil city or San LUIS OBISpo A"age COUNCIL AGENDA REPORT Number Two:. Fund the Advertising Contract at $80.850 The $80,850 represents the initial budget submitted by S.J. Francis to maintain the City's advertising budget at a level comparable to the prior year. Under this alternative, it is suggested that the regional advertising program costs ($5,000) be absorbed within the $80,850 budget. Sufficient funding would be provided to implement the regional tourism program, however, the regular advertising budget would be reduced $5,000 or 10%. This would result in the loss of one to two advertisements in major travel magazines. This alternative is offered in recognition of the Council's decision to fund the Chamber of Commerce and VCB's 1990-91 contracts at higher than budgeted levels. In approving their contracts in June, the Chamber requested and received $2,820 more than budgeted to maintain service levels comparable to the prior year. The VCB received $9,200 more than budgeted for the same reasons. Monies available in the Community Promotion Budget's Facilities Reserve were used to fund this shortfall. If the Council selects this alternative, it will be necessary to appropriate $5,150 from the Community Promotion Budget's Facilities Reserve. The PCC is not supportive of this alternative. Number Three: Fund the Contract at the PCC's Recommended Level of $85.150 Under this alternative, sufficient funding would be provided to continue the City's advertising program at a service level comparable to the prior year and implement a regional advertising campaign. If the Council selects this alternative, it will be necessary to appropriate $10,150 from the Community Promotion Budget's Facility Reserve. The PCC supports this alternative. ATTACHMENTS: "1": S.J. Francis' revised Advertising Contract DH\adver! ! Ad%enising Public Relations Graphic Design 1137-Visu del Lago San Luis Obispo Califomia 9}+05 805544-6849 Tourism.Advertising Plan for the City of San Luis Obispo Prepared by Si FRANCIS&ASSOCIATES August 1,1990 ATTACEMENT 1 3-� n INTRODUCTION SJ Francis&Associates is pleased to present the City of San Luis Obispo with,a proposal to increase tourism to the City. Accompanying this proposal are samples of work,background information on the agency and professional references. When you select an advertising agency,it will be to your benefit to choose an innovative firm familiar with travel promotion,government agencies and the special qualities of San Luis Obispo.It is also important that you work with a firm that has experience in creative thinking,advertisement planning and production,media buying, publicity and promotions. Si Francis&Associates meets these requirements. 1 Ss7 OBJECTIVES AND PHILOSOPHICAL APPROACH One of the first decisions in a promotional campaign is positioning.How do we want the potential visitor to think about San Luis Obispo?How do we want him (or her) to feel about our city? When we position San Luis Obispo,we place it in a certain way in the prospect's mind. This is accomplished through a positioning statement.A positioning statement should • Define what San Luis Obispo offers visitors • Set the city apart from competing California destinations • State a meaningful benefit to our target market • Establish a distinctive personality A sample positioning statement for the city is: San Luis Obispo is a small,cultured city in an unspoiled and serene setting.It mixes small-town pride and gusto with metropolitan appreciation for scenic beauty and cultural expression. San Luis Obispo refreshes the visitor with its beauty, recreation and friendly residents. Residents freely say "hello' to visitors and are eager to offer directions and helpful advice. Tourists feel welcome to explore historical and cultural landmarks,shop in an old-fashioned downtown,enjoy diverse dining and partake in unusual festivities and events. Plus,visitors can use San Luis Obispo as their base for seeing other county attractions, including Hearst Castle,beaches and wineries. Once we agree on how to position the city,the next step is to set the strategy.SJFA recommends defining these five points to create a strategy statement for promoting tourism: 1.The objective—What we want the promotional campaign to accomplish. For overnight visitors,SJFA recommends this objective: Motivate the target market to request additional visitor information.The objective of the follow-up information is to close the sale or generate a second request for more information. 2. The target market—Pinpointing who the most likely visitors are. For overnight visitors,this leads to selecting appropriate magazines and newspapers for advertising placement. For daytime visitors,this leads to selecting appropriate radio stations. The Chamber of Commerce has found that approximately 50% of San Luis Obispo overnight visitors are from Southern California,30%are from the San Joaquin Valley and 20% are from the Bay Area. The Bay Area is the fastest growing group of visitors. 2 .7 'O Research conducted for the California Department of Commerce shows that Californians who travel 100 miles or more for pleasure trips within the state are • Slightly older than the general population (median age 48.1 years vs.45.5 years) • More highly educated (68.8% had at least some college vs. 61.8%) • Have a higher household income(median$41,100 vs. $34,300) • Own their homes (73.5% vs. 64.9%) • Are employed in professional/technical or managerial occupations (34.3% vs. 24.0%) It is vital to consider the target markets'lifestyles in addition to their demographics. Designing a promotional campaign targeted towards affluent adults aged 35-65+ who live in southern California,the.San Joaquin Valley and the.Bay Area,hold professional jobs,and are interested in what San Luis Obispo offers will bring results. 3.The consumer benefit—Make it a meaningful benefit.This is pulled straight from the positioning statement. Highlight the benefit in all promotions. 4.The support to make the benefit believable—Give facts,use testimonials,show photographs. Be precise. S.The tone and manner--Call it personality or image.San Luis Obispo is friendly, unpretentious,culturally rich and proud. Express it. Finally,stick with the strategy. Once the basic nature of the promotional campaign is decided, has been tested and perfected,stay with it.Virginia's tourism campaign "Virginia is for lovers" endured for 20 years and through three governors,was dropped.for something new—then brought back It still brings results. 3 S-9 r' SUMMARY OF PROMOTIONAL CAMPAIGN "Share it with someone special" has been San Luis Obispo's campaign theme for the past two years: SJFA proposes keeping this theme and using it in all advertisements. Thespecific message of the print advertisements will continue to encourage overnight visits. Realizing that the city is in the midst of a drought,each ad will carry the City's water conservation message Wafer conservation is a way of life. Residents living within a 250-mile radius of San Luis Obispo will be the primary geographic market,followed by all residents of California.Upscale adults interested in travel and gentle recreation will be the primary lifestyle market. Print Advertisements SJFA recommends creating a 1/3 page four-color ad for placement in select magazines,and several compatible 1 column x 4"black&white ads for Sunset and key newspapers. Each ad will reflect the five-point.strategy. Ad placement will be coordinated with the Visitor and Conference Bureau's advertising schedule. This will make full use of exposing target markets to the words "San Luis Obispo" and avoid duplication. Magazines are an excellent way to reach.a specific audience. They provide high quality ad reproduction. They are read in a leisurely environment. They also have a longer life compared to newspapers. SJFA recommends advertising in California magazine,Los Angeles Magazine,Sunset,Travel &Leisure,Westways and Travel-Holiday. Newspapers have a much shorter lead time than magazines.They allow the advertiser quick access to a geographically precise market..SJFA recommends placing ads in different newspapers at key times in the off season. If,for instance,the San Joaquin Valley is trapped in winter fog, that provides the perfect opportunity for advertising sunny San Luis Obispo. Or,when southern California is smothered by Indian Summer smog,the City can advertise bright,blue skies and sweet ocean breezes. All print ads will encourage response to the Chamber of Commerce,whether by phoning for information,writing or using a Reader Response card.The Chamber staff does an excellent job of tracking ad responses,giving us an accurate measure of ad and media effectiveness. 4 S-�o J. Radio Promotion SJFA recommends repeating the winter radio promotion with Fresno station KFRE and.Bakersfield station KLLY. In the 1989-90 campaign,the KFRE and KLLY promotions increased the City's ad dollars by 23%.The City gained more than$12500 in exposure through this one promotion SJFA proposes giving weekend trips for two to San Luis Obispo as prizes in the two radio promotions. During the promotion,the radio stations will broadcast facts and trivia about San Luis Obispo (furnished by SJFA).This exposure is free.The prizes will be for one night's lodging, dinner-for-two one evening,and brunch or breakfast for two. Hotels,motels and restaurants in the city will donate rooms and meals in exchange for promotional mention on the radio. This type of special event will focus.attention on.San Luis Obispo during January and February, giving the City free radio exposure to a proven market within a 3-hour drive. Radio promotions are very difficult to evaluate:The radio stations receive the phone calls,and we are dependent on their evaluations. Both radio stations IUM and KLLY claim that their listeners have been very excited about the San Luis Obispo promotion. Each station said that listeners who normally don't participate in contests called in—from their homes, offices and even their cars. KFRE typically begins receiving calls in September from listeners asking if the San Luis Obispo promotion will be held again. The radio promotion will be evaluated by the number of calls and who placed the calls—that each radio station received.The dollar value of the promotion will also contribute to the evaluation 5 l GENERAL SCHEDULE According to Chamber of Commence research,occupancy rates in San Luis Obispo. are lowest between November and March. SJFA suggests running the majority of print ads between November and April. The two radio promotions will be run simultaneously,in January and February. This takes advantage of traditionally yucky weather in the San Joaquin Valley and the post- Christmas lull in radio advertising. Here is the general outline of promotional services: September. City Council approves promotional contract October. Agency prepares sample ads for PCC approval Agency prepares media schedule and budget PCC approves ad concept PCC approves media schedule and budget Agency prepares ads November: Agency places magazine ads for January issues Agency begins negotiations for radio promotions Agency presents radio promotion outline to PCC for approval Agency begins contacting hotels and restaurants about participating in radio promotion December. Agency places magazine ads for February issues Agency secures hotel and restaurant participation in radio promotion Agency packages and ships promotional materials to radio stations January: Agency places magazine ads for Manch issues Agency places appropriate newspaper ads for January Agency supervises radio promotions February: Agency places magazine ads for April issues Agency places appropriate newspaper ads for February Agency supervises radio promotions March. Agency places appropriate newspaper ads for March Agency evaluates radio promotion April: Agency evaluates ad responses to date May: Agency evaluates ad responses to date June: Agency evaluates campaign y 6 ti BUDGET DISCUSSION The majority of the funds will be used to purchase ad space mi magazines and newspapers. Which magazines and newspapers are used will be determined once the five- step advertising strategy is completed and approved. SJFA proposes preparing • 1 four-color 1/3 page magazine ad to run in glossy magazines • 4 black&white 1 column x 4"ad for Sunset and newspapers SJFA recommends at minimum a 10%budget increase over the 1989-90 budget of $73,500.Advertising costs increased between 8 and 15 percent during fiscal year 1989-90. In order to just maintain the City's media presence,a budget increase of 10% is vital.. The following estimate is based on ideas presented in this proposal.All costs are approximate. Media placement (net) $55,250 Ad production (1 4C ad,4 B/W ads) $ 5500 Radio Promotions coordination $ 4,000 Printing* $ 6,500 Account service $ 9,600 Subtotal $80,850 Daytime tourism radio ad production*" $ 500 Daytime tourism radio ad placement $ 4,500 TOTAL for FY 1990-91 $85,850 ' Includes reprinting 30,000 City brochures and 12,000 'Thanks for Writing"notes "With the passage of the City's No Smoking ordinance,the.Council has shown a desire to encourage daytime and evening visits to San Luis Obispo by county residents and Santa Barbara County residents.To attract daytime visitors,SJFA recommends creating 30-second radio commercials for regional broadcast. These commercials will encourage locals and "nearbys" to come to San Luis Obispo for shopping,eating out and sightseeing. i� 7 S�3 CCONCLUSION By determining how San Luis Obispo should be positioned and what strategy should be used,the City will have the foundation for a strategic and lasting promotional campaign. A successful campaign will • Increase awareness of San Luis Obispo as a pleasure destination • Enhance San Luis Obispo's positive image • Maintain market share of visitors • Bring first-time tourists to the city • Increase the possibility for word-of-mouth references • Create goodwill between visitors and the community SJ Francis&Associates is expertly qualified to provide the services and materials presented-in this outline.Thank you for considering SJ Francis&Associates. C 8 . r v I PROJECT MANAGER SJ Francis &Associates is owned by Sallie J. Francis: Sallie has lived and worked in San Luis Obispo for 18 years. A journalism;graduate of Cal Poly,Sallie has worked in the advertising and public relations profession since 1976.. SJ Francis &Associates contracts with several talented freelance professionals for photography,radio and TV production, graphic design and other services. Creativity is not a function of size and small is not necessarily limiting. SJ Francis & Associates has the talent,innovation,desire and experience to handle the promotional campaign for the City of San Luis Obispo. SALLIE J. FRANCIS Experience Sallie brings more than 17 years of advertising and public relations experience to SJ Francis &Associates. A resident of San Luis Obispo County since 1972,Sallie offers proven experience in the advertising profession and tourism promotion. She has worked as a media buyer for an advertising agency,promotional coordinator for the San Luis Obispo Chamber of Commerce,promotions manager for a resort in the Bahamas and manager of the County RideShare Program She managed public relations and promotions for a hotel management company and was a full partner in another advertising agency before forming SJ Francis&Associates. Sallie has proven experience in promotional planning,media selection and ad placement. She has produced effective newspaper,magazine,radio and TV advertisements and public service announcements in addition to numerous brochures and newsletters. She is also highly skilled at special event production. While managing the San Luis Obispo County RideShare Program,she initiated and coordinated the first California state- wide RideShare Awareness Week She also created an out-of town radio tourism promotion that boosted a client's ad budget.by 49%. Memberships & Activities Member. Public Relations Society of America Member. Promotional Coordinating Committee,City of San Luis Obispo, 1986-87 Member: San Luis Obispo Chamber of Commerce Professional Advisor. Cal Poly Public Relations Student Society of America 9 CSJ FRANCIS&ASSOCIATES SJ Francis&Associates offers you a full range of promotional capabilities. We work with you to achieve your objectives. We combine your thorough-knowledge of your business with our advertising expertise. The result is promotional work that sets you apart from your competition and brings results. • Structure As a small agency,we place high emphasis on client service.You have direct access to top talent working on your account. We are flexible and.able to quickly respond to fast- breaking changes. • Creativity A creative approach has impact. It grabs the attention of your audience so they can receive your message. However,we do not believe in creativity for its own sake. We balance information about your business, the marketplace and the community with creative thinking.This assures you of a campaign that stands out from your competition. • Cost-Consciousness Successful advertising must be cost effective.We are as prudent with your money as we are with our own. • Professional Contacts After working in this profession for many years,we have developed an extensive network of relationships. Media contacts,appropriate suppliers,freelance talent and resource people are available to us and,therefore,your account: • Philosophy We believe that a client and its advertising agency enter into a partnership.We see things through your eyes,yet offer objectivity..We.strive to anticipate rather than wait to react. And we're never satisfied with"good enough." 10 i PROFESSIONAL REFERENCES David Garth Paul Kuzniar Chamber of Commerce The KuzniaiGroup San Luis Obispo,CA Santa Monica,CA 543=1323 213/396-6115 Dick Mason Desmond Seales US98/KVEC Diversified Services San Luis Obispo,CA George Town, Grand Cayman 541-8798 809/947-4325 11.