HomeMy WebLinkAbout09/03/1991, 7 - CONSIDERATION OF A RECOMMENDATION FROM THE PROMOTIONAL COORDINATING COMMITTEE TO CONTRIBUTE $9,000 TO THE ""SHOP SAN LUIS"" CAMPAIGN PROPOSED BY THE SAN LUIS OBISPO CHAMBER OF COMMERCE." �����IIIII��IINIIIIIIIIII�IIUIII ".7 r MEETIN DA :
city o San Luis OBISpo n.
COUNCIL AGENDA REPORT ITEM NUMBER:
FROM: Ken Hampian, Assistant City Administrative Office
Prepared by: Alison Lloyd, Administrative Analyst
SUBJECT: Consideration of a recommendation from the
Promotional Coordinating Committee to contribute
$9, 000 to the "Shop San Luis" campaign proposed by
the San Luis Obispo Chamber of Commerce.
CAO RECOMMENDATIONS:
By Motion:
1. Approve a recommendation from the Promotional Coordinating
Committee to contribute $9, 000 to the pilot "Shop San Luis"
campaign proposed by the San Luis Obispo Chamber of Commerce.
2 . Authorize the City Administrative Officer to execute a
contract with the Chamber of Commerce to administer the "Shop
San Luis" advertising campaign.
3 . Direct the PCC to monitor the program and provide Council with
an evaluation report at the conclusion of the campaign during
the Spring of 1992 .
DISCUSSION:
Background
During the August 20, 1991 meeting, the Council approved a two-
year contract with SJ Francis & Associates for advertising
services. At that time, the Promotional Coordinating Committee
(PCC) advised the Council that they had intentionally deferred a
decision on including a regional advertising campaign component in
the contract because of an alternative proposal from the Chamber
of Commerce. The PCC reviewed the Chamber's proposal for a "Shop
San Luis" advertising campaign and developed a recommendation for
Council consideration as part of this report.
Campaign Overview
The San Luis Obispo Chamber of Commerce has approached the (PCC)
with a proposal to coordinate a three-month regional advertising
campaign for the City of San Luis Obispo. The "Shop San Luis"
campaign involves a cooperative effort between the City's major
retail centers (Downtown Business Improvement Association, Central
Coast Plaza, Madonna Plaza, and Laguna/Bear Valley) , the Chamber
of Commerce and the City to aggressively promote San Luis Obispo
as the premier shopping area on the Central Coast. The campaign
will emphasize the benefits of shopping in San Luis Obispo as a
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Nii% COUNCIL AGENDA REPORT
whole rather than focusing on particular stores or shopping
centers. Therefore, it is not intended to supplant regular
business advertising. The ultimate goal of the campaign is to
increase the City's retail sales.
The campaign as proposed, will run from January to March of 1992,
and will be conducted entirely through radio and television
advertising. Each commercial will have a consistent musical jingle
and will highlight the many unique attractions of San Luis Obispo.
For example, the television commercials will show scenes of people
riding the trolley, couples enjoying an ice cream cone, children
playing in Mission Plaza in addition to scenes of people shopping
at San Luis Obispo's different retail centers. See the Chamber's
proposal for a more detailed description of the campaign
(Attachment No. l) .
Campaign costs
The Chamber of Commerce has estimated the cost of the "Shop San
Luis" advertising campaign to be $18, 000. This will provide
sufficient monies to purchase a musical jingle package, produce
commercials, and buy radio and television time. The Chamber of
Commerce is proposing a cost sharing program to fund the pilot
campaign that provides half of the estimated budget from some local
retail centers ($9, 000) and half from the City of San Luis Obispo
($9, 000) . The Chamber will provide an in-kind contribution valued
at $2 , 500 for overseeing implementation of the program (this has
not been included in the budget) . Local radio and television
stations have also indicated that they will support this program
by offering reasonably priced advertising packages. KSBY-TV has
already committed to providing a "bonus" spot for every spot
purchased. As a result, the Chamber anticipates receiving an
additional $18, 000 in advertising value, bringing the program value j
to $38, 500. The funding proposal is illustrated below:
Participating Groups: Contribution:
Downtown Business Improvement Association $2,500 (Committed)
Central Coast Plaza $2,500 (Committed)
Madonna Plaza $2,500 (Committed)
Laguna/Bear Valley $1,500 (Committed)
City of San Luis Obispo $9,000 (Proposed)
Total Program Budget $18,000
Chamber of Commerce In-Kind Support $ 2,500 (Committed)
Radio/TV Matching Promotional Value $18,000 (Committed)
Total Program Value $38,500
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COUNCIL AGENDA REPORT
Campaign Administration
As previously mentioned, the Chamber will assume full
responsibility for the program which includes: (1) establishing
and overseeing a committee of representatives from the
participating groups to approve and control the advertising
campaign, (2) serving as coordinator between the participating
groups, (3) hiring and overseeing an advertising agency to produce
the commercials and place the advertising orders, and (4)
evaluating the success of the pilot program.
Campaign Evaluation
A combination of factors will be used to measure the success of the
campaign. First and foremost will be the participants satisfaction
(e.g. , was the campaign well-run, did it achieve the desired
results) . Secondly, the Chamber will conduct a random telephone
survey to assess the shopping habits and attitudes of City and
County residents before and after the campaign to measure the
impact on the community (Attachment No. 2) . If these reviews show
that the campaign was successful, it would be the Chamber's
intention to pursue the program on an annual basis (The actual
costs of conducting an annual campaign have not yet been
developed) .
i
If the Council approves the PCC's recommendation to support the
pilot "Shop San Luis" campaign, staff recommends that the PCC
monitor the program and provide the Council with a report
evaluating the program at the conclusion of the campaign during the
Spring of 1992.
PCC Recommendation
The PCC has considered the Chamber's pilot "Shop San Luis"
advertising campaign and concluded that it would be beneficial for
the City to participate. It was the PCC' s opinion that if the City
is to remain competitve in the Central Coast's retail sales market,
more visibility is necessary. The PCC felt that participation in
a campaign such as "Shop San Luis" represented a positive step
toward achieving this goal. In addition, if the campaign is
successful, benefits will accrue to both the retailers and the City
through increased retail sales and sales tax receipts.
As a result the PCC is recommending that the Council support the
"Shop San Luis" proposal at their requested level of funding
($9, 000) , and has asked staff to forward their recommendation to
the Council for consideration.
7- 3
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Ze COUNCIL AGENDA REPORT
Staff Recommendation
When the idea of a "Shop San Luis" program was first brought to
staff by representatives from the Chamber, staff indicated that as
a first step, it was essential that the Chamber demonstrate
community-wide support for the program from the private sector.
Staff was concerned that an advertising program having only
marginal private support would become overly reliant on the City.
There are two aspects to this concern. First, retail advertising -
even if "generic" in nature - should be the primary responsibility
of the private sector; and second, since this is envisioned as an
ongoing program, a major cost share permanently apportioned to the
City could be quite substantial over time.
In response to this concern, the Chamber has obtained contributions
from several key retail areas. However, conspicuous by its absence
is a contribution from Foothill area retailers, who are not yet
convinced that "generic" regional advertising will be adequately
productive. Efforts will continue to be made to bring this area
of the retail community into the program. The Chamber has also
obtained media commitments which essentially leverage additional
program support in the form of discounted advertising.
Staff views these efforts as a "good start" , given the pilot nature
of the program. For this reason, staff supports a $9, 000
contribution for the first year, which can be considered a business i
retention component of our economic stability program. However,
should this program continue in the future, staff recommends that
the City provide no more than a 2 to 1 match of private versus
public "hard" dollars, up to an established "not-to-exceed" amount
(e.g. , $10, 000) . In this way, the private sector will assume the
majority of long-term funding responsibility with a reasonable
level of support from the City's Economic Stability Program.
More specific Council direction concerning future City
participation will be sought in conjunction with the PCC's
evaluation report next Spring. If the program is successful in the
first year, unless Council directs otherwise, it is staff"s
intention to shape its recommendation for an ongoing program along
the lines of a 112 to 1 match" concept with a "not-to-exceed"
program ceiling.
FISCAL IMPACT:
There is currently $96, 000 available in the Economic Stability
Program budget for 1991-92 (which is derived from a portion of the
20% allocation of Transient Occupancy Tax revenues) . If the City
Council approves the PCC's recommendation to fund the pilot "Shop
San Luis" advertising campaign, the balance of the Program budget
will be reduced by $9, 000, leaving a total of $87, 000 available for
economic stability activities.
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COUNCIL AGENDA REPORT
ALTERNATIVES:
1. Reduce the City's contribution to $5, 000
Under this alternative, the City would contribute .$5, 000 toward the
"Shop San Luis" campaign, which is the same amount allocated for
regional advertising during 1990-91. This would also bring the
City's contribution to the pilot program somewhat more in line with
the other participants contributions. While this is a feasible
alternative, it is not recommended because staff believes that the
City's full support is needed to assure the development and
implementation of a comprehensive and successful campaign in this
year. In addition, given recent sales tax "slippage" (down 6% for
the fourth quarter of calendar year 1990 and down 10% for the first
quarter of calendar year 1991) , staff believes that an experimental
effort to enhance our share of the regional retail sales market is
worth pursuing at the level recommended by the PCC.
2. Eliminate the City's contribution
Under this alternative, the City would not allocate funds toward
the "Shop San Luis" campaign, thereby placing the financial
responsibility for the pilot program entirely on the private
sector. However, since the Council determined during 1990-91 that
a regional advertising campaign was in the interest of both the
City and the community, and because the pilot "Shop San Luis"
campaign will assist in preserving and promoting the financial
stability of the community, staff does not recommend this
alternative.
ATTACHMENTS:
1. "Shop San Luis" campaign proposal
2. Retail Association Survey Outline !
3. Economic Stability Budget
I
7 - J
San Luis Obispo Chamber of Commerce
1039 Chorro Street - San Luis Obispo. California 93401
(805) 543-1323 - FAX (805) 543.1255
David E. Garth, Executive Manager
April 24, 1991
SHOP SAN LUIS CAMPAIGN PROPOSAL
BACKGROUND
Nordstrom, Macys, The May Company -- all familiar names in
the retail business. All located out of our county, each of
these businesses has targeted San Luis Obispo for potential
retail dollars. With increased competition from distant retail
centers and more competition from other cities in the area such
as Santa Maria, San Luis Obispo has seen a leveling of retail
spending and in some areas actual decline. Once the center of
retail trade for the county, San Luis Obispo is now struggling to
maintain its share of business.
Recognizing the need to increase visibility for the City, the
SLO Chamber of Commerce is attempting to bring together various
retail groups within the community in an effort to address this
problem in the most aggressive manner possible. This program is
designed to distinguish San Luis Obispo as the premiere shopping
area on the Central Coast and ultimately increase the City' s
retail sales.
GOAL
To increase shopper awareness of San Luis Obispo as a
shopping destination and therefore increase shopping activity and
sales tax revenue.
STRATEGY
Form a committee representing different retail/trade groups
within the city limits. The purpose of the committee is to
develop and support an institutional advertising program to
promote shopping in San Luis Obispo. The campaign will be
designed to reach a broad spectrum of adults county-wide and in
northern Santa Barbara County. Emphasis will on the reasons why
San Luis Obispo is such an attractive place to shop, and not on
one particular store or center.
ATTACE�'EU 1 ACCREDITED
7 OhauBEF OF COMMERCE
CREATIVE THEME
The unifying theme for this image-building campaign will be
"Shop San Luis" . Because of the effectiveness of electronic
media in creating an image in the viewer's or listener's mind,
the campaign will be conducted entirely on radio and television.
Every commercial will have a consistent musical jingle and
will highlight the many unique attractions of the city. We'll
see scenes of people riding the trolley, couples enjoying an ice
cream cone, kids playing in Mission Plaza and lots of shots of
people shopping at different centers. The campaign will focus on
San Luis Obispo's ambience, the wide variety of stores available
and the ease of shopping at any of the retail centers.
This campaign is not intended to be a specific promotion for
Downtown, Central Coast Plaza or Laguna Plaza specifically. It
is an overall area promotion and is designed to enhance and not,
by any means, to supplant regular business advertising.
BUDGET
A three-month pilot campaign is proposed. Budgetary breakdown
would be as follows:
Music jingle package 31500. 00
Production of spots 500. 00
Television advertising time 10, 000. 00
Radio advertising time 41000.00
$18, 000. 00
FUNDING
The budget for this cooperative campaign would be provided by
the participating retails centers, with matching funds from the
City of San Luis Obispo.
It should also be noted that because local radio and
television stations have something to gain from a healthy retail
community, they have indicated they will support this program by
offering especially reasonably price advertising packages.
KSBY-TV has already committed to providing a extra or "bonus"
spot for every spot purchased. This effectively doubles the power
of the advertising dollars spent. The result is that each dollar
spent by the City in promoting retail will be turned into $4 .
However, without city support there is little motivation for
these normally competing retail groups to pool their advertising
dollars and promote the whole area instead of just advertising
their own center.
-7 - 7
The proposed funding plan is outlined below. All of the
retail groups have been contacted and have indicated they are
interested in supporting the program at the following levels.
Downtown BIA 21500. 00
Central Coast Plaza 21500. 00
Madonna Plaza 21500. 00
Laguna/Bear Valley 3 ,500. 00
*Chamber (in kind) (2, 500. 00)
Total Retail Groups $9, 000. 00
City of San Luis Obispo $9, 000. 00
Total Cash Budget $181000. 00
Radio/TV Matching Contribution $18, 000. 00
Total Program $36, 000. 00
* Please note that the Chamber estimates its contribution to
be the same as all other participating groups. However, since
the Chamber's role in administering the program represents an
in-kind contribution rather than a cash contribution it is
not added to the total budget.
ADMINISTRATION
The Chamber will bear the burden of administering the program
acting as coordinator between the various retail groups. The
Chamber will also act as the client overseeing the work of the
advertising agency. The agency will produce the spots and place
the advertising orders. The Chamber will make certain the spots
meet the approval of all the various retail groups involved by
developing an advisory committee consisting of representatives of
each of these groups.
ACCOUNTABILITY
The campaign is designed to be a three month pilot program.
A telephone survey (sample questions attached to this proposal)
will be conducted before and after the campaign to test its
effectiveness. If the program meets its goal of increasing
shopper awareness of San Luis Obispo, and if the various
participating retail groups feel it is worthwhile to continue
their support, it is possible that the program could be extended
on a yearly basis.
I MON 1 S :4'2 Bla4PNETT C C X. ::Lp C,` 5415Cu3:.0 P 0 21
RETAIL ASSOCIATION SURVEY OUTLINE
Attitudes & Opinions,'Retail Trade Areas on the Central Coast
Area Survey: Residents of the City & County of San Luis Obispo
Trade Areas Surveyed:
Downtown San Luis Obispo
Central Coast Plaza/San Luis Obispo
Madonna Mail/San Luis Obispo
Laguna Village Shopping Center/San Luis Obispo
Pacific Coast Center/Pismo Beach
K-Mart Center/Arroyo Grande
Toµn Center Mail/Santa Maria
Town Center West/Santa Maria
Others?
Demographic Info
Age: 12-17 / 18-24 / 25-34 / 35.44 / 45-54 155 +
Sex: M / F
Zip: 93_
Race:
Income:Household
Questions:
1. What shopping centers,imalls or areas do you shop at regularly?
A:
How Often:
How Often:
C:
How Often:
CADAV$\SLOSR Vy.Lxt
ATTACHMENT 2 _�
.:FR-Z,_?-_% 1 P7i_iN : 5 : 4 Z, FkF'NETT CCi:,: 1.1=1 :05545:+SE.0 F . 0
RETAIL ASSOCUTION SURVEY OUTLINE
Attitudes & Opinion s/retaH Trade Areas on the Central Coast
2. What is your favorite place to shop an the central coast?
3. What do you like best about it?
Price:
Selection:
Parking:
Convenient to home:
Ambiance:
Lots to do:
A specific store:
Other:
Answer:
4. What could happen to your favorite shopping area that would hake it better?
5. What is your least favorite place to shop on the central coast?
6. What are the reasons for your opinion about this shopping area?
7. is there a department store or other retail business you would like to see on the central
coast?
C:\DAVEASL0SRVY.txt
7- Al
COMMUNITY DEVELU MENT
PROGRAM: Economic Stability OPERATION: Economic Development
DEPARTMENT: Administration FUND: General Fund
1989-90 1990-91 1991-92 1992-93
PROGRAM COSTS ACTUAL BUDGETED REQUESTED PROPOSED
Staffing $ 0 $ 0 $ 0 $ 0
Contract services 0 0 96,000 166,000
Other operating expenditures 0 0 0 0
Minor capital _Q _ 0 0
Total $ 0 $ 0 $ 96,000 $ 166,000
PROGRAM DESCRIPTION
Consistent with Council goal-setting,the economic stability program has been established in order to focus City resources
on specific activities intended to preserve and promote the financial stability of the community. This program is funded
through a portion of the recommended 20% allocation of Transient Occupancy Tax (T.O.T.) revenues to cultural
activities,community promotion,and economic stability activities. Although no specific projects are identified for funding
at this time, the program could be used in support of a variety of activities such as:
■ Financial assistance programs for sprinkler and earthquake retrofits for private property owners in the downtown
■ Economic analysis of the draft Land Use Element
■ Efforts related to the potential annexation of the Broad Street area
■ Facilitating auto retailer relocation to the Los Osos Valley area
■ Reexamining options for the use of the City's Court Street property
■ Updating the 1983 strategic planning program
■ Retaining County administrative office space in the downtown
Funding levels for this program have been developed based on the proposed T.O.T. revenue distribution policy, which
results in the following allocation for economic stability activities based on the preliminary budget for cultural activity
grants and community promotion:
1991-9 1992-93
Projected T.O.T. Revenues $ 2,100,000 $ 2,480,000
Proposed Uses from 20% Allocation
Cultural activity grants 102,300 97,600
Community promotion 221,700 232,400
Economic stability activities 96.000 166.000
Total T.O.T. Allocation $ 420,000 $ 496,000
No funds will be expended from this program without Council identification and approval of specific projects or activities.
STAFFING SUMMARY
None. Staff assistance is provided through the City administration, planning, and financial administration programs.
SIGNIFICANT EXPENDITURE AND STAFFING CHANGES
■ 1991-93: This is a new program established as a result of Council goal-setting. As discussed above, it is funded
through a portion of the 20% T.O.T. revenue allocation designated for cultural activity grants,
community promotion,and economic stability activities. Specific expenditures from this program are
pending further project definition and Council approval.
D-93
ATTACHMENT 3
COMMUNITY DEVELOPMENT
PROGRAM: Economic Stability (continued)
DEPARTMENT: Administration
1991-93 PROGRAM OBJECPIVES
■ 1991-92: Ensure political commitment and support for a meaningful economic stability program prior to developing
and implementing specific actions
■ 1991-92: Address perceptions regarding economic stability and its compatibility with quality of life goals
■ 1992-93: Assure that any strategic planning program for economic stability,if approved,uses a citizen based process
PERFORMANCE AND 1989-90 1990-91 1991-92 1992-93
WORKLOAD INDICATORS ACTUAL PROJECTED ESTIMATED ESTIMATED
To be developed
D-94 7���
MEETIN� ���GAGENDA
, �
DATE _ITEM#
San Luis Obispo Chamber of Commerce
1039 Chorro Street • San Luis Obispo, California 93401
(805) 543-1323 • FAX (805) 543-1255
David E. Garth, Executive Manager
August 30, 1991
Mr. Ken Hampian, Assistant CAO
City of San Luis Obispo
P.O. Box 8100
San Luis Obispo, CA 93406
Dear Ken:
Please remove the Chamber's "Shop San Luis Obispo" proposal from the Council
agenda of September 3rd.
As you know, pulling together all of the retail groups in the city into a unified effort
has been a difficult task. We find now that we still have a few issues which must be
resolved before we go before the Council.
Thanks for your efforts and the work of your staff on this proposal.
Sincerely,
COPIFSTO:
❑•DW&M ACiw, ❑ FYl
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❑ FW.DiR
David E. Garth LACAO ❑ FIRECHIEF
LT ATrOr JEY ❑ FW DIR.
Executive Director ❑ CLW/OR1G- ❑ rOUCE aa.
❑ MCMT.TGbA,i ❑ P.fiC DlR
�❑ READF.LE ❑ UtI�LDI,.
T,
RECEIVED
AUG 3A1991
CITY CLERK ACCREDITED
SAN LUIS OBISPO,CA CMAYBEn Of OOYYE
Ci�.MUr.01 COMMEnCE
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