Are Destination Marketing Organizations wasting money?
It’s time to take a fresh look at Desination Marketing
Destination Marketing Organizations are responsible for marketing and promotion of their area to increase year-round visitation. With visitation comes business for the local economy, but most importantly people staying in hotel rooms. Most destinations have some form of local lodging facility use tax, which is a percentage of tax per night/per person for staying in the hotel. This funding is collected by the state or retained by the local government to reinvest in local infrastructure, arts and culture, public amenities, education etc. The reasoning for this is simple – without a consistent influx of visitors, local economies would struggle in maintaining many integral operations that make these destinations worth visiting. This is the main reason DMOs take on the challenge of encouraging new visitation and working with local businesses to increase return visitation.
Who’s dropping the ball?
Every year DMOs are tasked with developing marketing plans for local- or state-appointed committees, boards and officials. The plans are typically comprised of the same methods and tactics year over year. All destinations have an emphasis on meetings and events, tradeshow attendance, familiarization tours, press relations, event promotion, website development/maintenance, and exposure campaigns with a mix of traditional and digital advertising channels. Many of these tactics are sound strategies for destinations, however when it comes to website and ad placement budgets, destinations are missing the mark.
Simply using every available tactic because it is an opportunity is not a strategy.
Many DMOs are guilty of recycling their marketing plans outlined back in the late 90’s with a poor attempt at plugging in new marketing methods. Too many times have I heard unsubstantiated reasons for being active on social media, maintaining a blog and creating a new application. DMOs are randomly adding channels into their plans to reassure the elected officials who have little marketing background that the plan is relevant to today’s marketing landscape. Simply using every available tactic because it is an opportunity is not a strategy.
Almost every DMO outsources some part of their marketing implementation to a professional advertising agency. Often there will be multiple agencies and vendors responsible for design work, media buying, creative writing and website work. This is because DMOs are pressed for their administrative budgets and rely on minimal staff to perform many tasks. The agencies who went through the grueling RFP process to establish a long standing relationships with these DMOs are eating this up, because they are able to take advantage of substantial marketing budgets without being held responsible to measuring true impact. This is because of the latency of visitation impact and an inability to accurately attribute booked vacations from many of the standard media placements. Agencies are also incentivized to use as much of theses advertising budgets for paid media as possible – their management fee is a percentage of ad spend.
A proper paid strategy does include a multi channel media mix of print, digital, radio and out-of-home (OOH), however unless your operating budget exceeds the million mark you are most likely stretching your budget too thin. Inclusion of traditional print, radio and out of home are hardly measurable channels that come at a great cost for DMOs. Print placements in industry relevant verticals can range anywhere from 20k to 100k for a single insertion. OOH placements can range anywhere from 1k to 10k per month depending on the desired placement and reach. Print and OOH may reach your defined target audience and compliment your multichannel approach, however the measurable impact is not worth the risk when you can invest that budget into building your digital content equity.
Here’s the takeaway- traditional print and OOH are simply too expensive for DMOs with thin budgets. DMOs should be reluctant to agree if their agencies propose inclusion of these channels. There are many alternative, long term approaches to building awareness and leverage digital content that remain untapped for many DMOs. With the funding saved from avoiding channels with impressions served as a form of measurement can amount to hundreds of thousands per year. This can be dedicated to the new age of digital content development and promotion of said content, or even fulfilling search demand for people already interested in your destination for years with SEM. Be sure to challenge your agency to give you a strategy that holds them accountable to achieving actual measurable goals.
If you are interested in working with an agency that cares about your measurable objectives, keeping your visitation numbers high or if you just what to know what the new age of digital content development and promotion is, please let us know and we would be happy to get the conversation going.