California Tourism Canada Advertising ROI Research. November 2009 Strategic Marketing & Research, Inc

Transcription

1 California Tourism Canada Advertising ROI Research November 2009 Strategic Marketing & Research, Inc

2 Table of Contents Background Information 3 Background and Objectives 4 Methodology 5 Market Geography and Population 7 The Advertising Campaign 8 Review of Phase 1 Findings 9 Detailed Phase 2 Findings 12 Overall Travel 13 Incremental Travel 14 Economic Impact and ROI 18 Individual Market Analysis 22 Toronto 23 Western Canada 26 Rest of Nation 29 Conclusions and Recommendations 32 Appendix Calculations 33 Appendix Survey Instrument 38 2

3 BACKGROUND INFORMATION 3

4 Background & Objectives Since 2007 CTTC has implemented an aggressive international marketing campaign in Canada and several other countries. While efforts in some of the countries are more trade oriented, in Canada the program includes extensive consumer focused advertising. Entrance into Canadian markets began in 2007 with a targeted buy of three spot markets in Western Canada. The spot markets were expanded in 2008 to include the country s largest city, Toronto. Previous successes in those spot markets encouraged CTTC to target the entire county in This research is conducted in two waves. The first wave was reported in June 2009 and measured awareness of two TV ads and their impact on consumers image of California and likelihood to visit the state. This second wave is designed to measure the economic impact and return on investment of the advertising. 4

5 Methodology 1,231 completed Interviews Data collection in November 2009 Web based data collection methodology National sample Show ads to accurately measure recall Surveyed by market, and weighted to be representative Respondents screened to ensure they had traveled to US in past 2 years or were likely to travel to US in next 2 years 54% of Canadian Households qualified Market Toronto 411 Western Canada 415 Remainder of Canada 405 Total 1,231 5

6 Market Geography & Population Previous research in the Canadian markets has shown that geography is important in travel patterns. Those in the Western markets are nearer to California and have a higher propensity to visit the state, while Toronto is nearer to New York and Orlando. Though the 2009 media buy was national, the biggest gains in target audience were even farther east of Toronto with the larger cities of Montreal, Ottawa, and Quebec. Montreal Quebec Ottawa Market Distance to San Francisco (miles) Distance to Orlando (miles) Distance to New York City (miles) Population (Households) Western Canada (Calgary) 1,002 2,300 2,031 4,230,836 Rest of Nation NA NA NA 3,093,485 Toronto 2,268 1, ,113,149 6

7 The Advertising Campaign CTTC s entry into the Canadian markets started with a buy in Western spot markets in The addition of Toronto in 2008 increased the budget allocation, but media was still placed by market. The 2009 buy was national and therefore there is no breakout by market. Along with the expansion of target audience came an expansion of creative execution. The TV spot Work has been employed since 2007 and was again part of the buy. However, an additional spot, You ll Be Back, was included in rotation with the ad that had aired in previous years. 7

8 REVIEW OF PHASE 1 FINDINGS 8

9 Phase 1 Findings Review As reported in the Phase I results, overall ad awareness was up slightly from 62% in 2008 to 63% in However, the most awareness was generated in those markets where CTTC had previously advertised. 9

10 Phase 1 Findings Review Though awareness was similar to 2008, the expansion of the media buy to include the entire country and not just spot markets increased the target audience tremendously. Even with a budget increase, the larger audience lowered the cost to reach an aware household. Millions $0.52 $0.46 $0.60 $ $0.36 $ $0.30 $ $ Aware U.S. Travelers Cost Per Aware HH $

11 DETAILED PHASE 2 FINDINGS 11

12 Overall Travel Canada experienced the same economic woes as the U.S. in With an increase in unemployment and a drop in consumer confidence, there was significantly less travel to California from the Western markets. However, SMARI does not consider overall travel in determining the impact of the advertising. It is only incremental travel that is used to calculate economic impact and ROI. The importance of overall travel is that it provides a context for considering the success of the advertising efforts. 12

13 Incremental Travel Incremental travel is the difference in the level of travel to California between those who are aware of the advertising and those not aware. With less travel by aware households in Toronto, there is no influenced travel from that market. In the new markets, the level of visitation to California was so low that the ads were able to have an immediate impact. 13

14 Incremental Travel Those who mention that they are already planning a trip to California are considered in the economic impact in a similar fashion to those who have already traveled. While the Western markets again have the largest increment, there is some influence on the audience in Toronto. 14

15 Incremental Travel While both the incremental and projected travel are relatively similar to the 2008 measurements, there was a significant increase in target audience with a national media buy. 15

16 Incremental Travel The increase in audience pushed the total number of influenced households significantly higher. When both travel increments are applied to Canadians who are U.S. travelers and were exposed to the California advertising, we see the number of trips impacted by the campaign. The projected trips are first discounted to 80%* to account for those who will not actually follow through on their plans to visit California. * Previously conducted research indicates that 80% of those planning a trip will actually visit California. 16

17 Economic Impact and ROI Even with a significant increase in the number of influenced trips, there was little change in the economic impact. This is a result of lower trip expenditures. While aware households spent an average of $2,570 in 2008, aware households only spent $1,850 on their trips to California in

18 Economic Impact and ROI With a larger media budget and slightly lower economic impact, the return on investment in the Canadian markets decreased. The economic conditions of 2009 are likely driving these declines as more consumers stayed close to home, took trips in which they could drive rather than fly, and spent less on travel. 18

19 Economic Impact and ROI And though the tax revenue for incremental trips is unchanged from 2008, when projected trips are included the dollars to state coffers will increase from the previous measurement. Note: Tax rate used was 6.38% in 2008 and 2009, and 6.47% in

20 Economic Impact and ROI But again, with a larger media buy, the return on investment to the state is slightly lower than in However, there is still tremendous increase from the ROI just two years ago. Note: Tax rate used was 6.38% in 2008 and 2009, and 6.47% in

21 INDIVIDUAL MARKET ANALYSIS 21

22 Individual Market Analysis Toronto As a market far closer to the East Coast of the United States, it is not surprising that New York and Florida make up a significant portion of Toronto s U.S. trips. Of those visiting California, this market has a higher propensity to visit Monterey and Lake Tahoe. States Visited in 2009 % Visiting Share of Trips California Cities Visited % Visiting Index % Visiting Share of Trips New York 41% 49% Florida 30% 25% Nevada 11% 9% California 9% 6% Arizona 4% 3% Washington 4% 3% Colorado 2% 1% Utah 2% 1% Hawaii 2% 1% Oregon 1% 1% None of these states 26% Monterey 16% 278 Lake Tahoe 12% 200 Los Angeles 60% 142 San Francisco 52% 142 Anaheim/Orange County 28% 142 Sacramento 12% 101 Palm Springs 12% 88 San Diego 20% 86 Other 20% 22

23 Individual Market Analysis Toronto Those from Toronto are the least likely to have children under 18 on their trips and are most often looking for something different. Of the three market types, those in Toronto were the most likely to visit and stay with relatives. California Trip Specifics People on trip 2.8 Children under 18 on trip 50% Travel party was "couple" 50% Travel party was "family with kids" 28% Nights spent 6.4 Drove to California 8% Flew to California 88% Motivation for Choosing California Top 2 Box Rating Seeing something new and different 72% Going somewhere with better weather 72% Visiting a specific attraction or event 68% Visiting friends and relatives 52% Returning to somewhere familiar that you enjoy 48% Used paid accommodations 68% Stayed with friends or family 48% Average trip expenditures $2,395 23

24 Individual Market Analysis Toronto As trips by those from Toronto are the least likely to include children, there is a higher likelihood to participate in nightlife and cultural attractions such as museums and theater. Toronto Participated Participate Index Motivated Motivate Index Shopping 80% % 76 Viewing and enjoying natural scenery such as mountains, oceans, etc. 76% % 131 Go sightseeing or take tours 64% % 98 Fine dining or eating at a unique local restaurant 64% 120 8% 73 Entertainment and nightlife 64% % 147 Arts activities such as museums, theater performances 60% % 306 Going to the beach 56% % 93 Visiting a theme or amusement park 44% % 99 Visiting a national or state park 44% 124 4% 71 Visit historical sites 44% % 223 Driving on scenic byways or roads 40% 99 8% 58 24

25 Individual Market Analysis Western Canada The Western markets have a far different travel pattern and not surprisingly there is a higher propensity to visit Western states. Trips from this area primarily include visits to California s largest cities. States Visited in 2009 % Visiting Share of Trips California Cities Visited % Visiting Index Washington 33% 39% Nevada 25% 17% California 23% 13% Arizona 14% 7% Oregon 12% 8% Florida 10% 5% Hawaii 8% 4% Utah 4% 2% New York 3% 2% Texas 2% 1% Colorado 2% 1% None of these 21% Palm Springs 14% 105 Anaheim/Orange County 19% 96 San Diego 22% 95 Sacramento 11% 94 San Francisco 33% 91 Los Angeles 35% 83 Monterey 2% 28 Lake Tahoe 2% 26 Other 20%

26 Individual Market Analysis Western Canada Western consumers are more likely to drive on their visits to California, but that is not a function of lowering costs. In fact, those in the Western markets have the highest trip expenditures, including the highest transportation costs. California Trip Specifics People on trip 2.8 Children under 18 on trip 59% Travel party was "couple" 46% Travel party was "family with kids" 19% Nights spent 6.8 Drove to California 30% Flew to California 67% Motivation for Choosing California Top 2 Box Rating Going somewhere with better weather 64% Seeing something new and different 54% Visiting a specific attraction or event 52% Returning to somewhere familiar that you enjoy 46% Visiting friends and relatives 29% Used paid accommodations 86% Stayed with friends or family 19% Average trip expenditures $2,432 26

27 Individual Market Analysis Western Canada Driving for those in the Western markets is not a function of saving money but of the types of trips they want. They have the highest participation in driving on scenic byways and roads not because they have a car but because they were motivated to visit California for this activity. Western Canada Participated Participate Index Motivated Motivate Index Shopping 75% % 115 Fine dining or eating at a unique local restaurant 51% 96 13% 115 Viewing and enjoying natural scenery such as mountains, oceans, etc. 48% 84 22% 81 Go sightseeing or take tours 48% 95 13% 78 Driving on scenic byways or roads 43% % 138 Visiting a theme or amusement park 37% % 118 Visiting a national or state park 32% 89 5% 85 Going to the beach 32% 79 14% 110 Entertainment and nightlife 30% 78 8% 97 Experiencing the unique culture of the area 27% 99 3% 46 Visiting small towns and rural areas 27% 88 5% 76 27

28 Individual Market Analysis Rest of Nation As the population centers for the rest of the nation are farther east than Toronto, it is not surprising their visitation patterns are similar. However, those in these markets are the most likely to visit a state not considered part of California s competitive set. Of those who do visit, consumers in this market have the highest visitation to San Diego. States Visited in 2009 % Visiting Share of Trips California Cities Visited % Visiting Index Florida 26% 21% New York 18% 18% California 12% 13% Nevada 15% 11% Washington 10% 11% Arizona 9% 7% Oregon 4% 4% Hawaii 4% 4% Texas 3% 4% Utah 3% 3% Colorado 2% 3% None of these 38% Lake Tahoe 10% 173 San Diego 31% 133 Sacramento 14% 116 Palm Springs 14% 102 Los Angeles 38% 90 San Francisco 24% 66 Monterey 3% 60 Anaheim/Orange County 10% 52 Other 21%

29 Individual Market Analysis Rest of Nation Though those from new target markets stayed the longest on their trips to California, they also spent the least. Though they had the highest lodging cost, they also had the lowest transportation costs and spent the least on entertainment and attractions. California Trip Specifics People on trip 2.7 Children under 18 on trip 54% Travel party was "couple" 58% Travel party was "family with kids" 8% Nights spent 7.6 Drove to California 17% Flew to California 76% Motivation for Choosing California Top 2 Box Rating Going somewhere with better weather 69% Seeing something new and different 62% Visiting a specific attraction or event 48% Returning to somewhere familiar that you enjoy 45% Visiting friends and relatives 35% Used paid accommodations 79% Stayed with friends or family 21% Average trip expenditures $2,149 29

30 Individual Market Analysis Rest of Nation The low spending on entertainment and attractions is a reflection of their trip activities. They had the highest participation in visiting historical sites and were most motivated to visit by natural beauty, both of which have little or no cost. Rest of Nation Participated Participate Index Motivated Motivate Index Shopping 69% 92 24% 92 Viewing and enjoying natural scenery such as mountains, oceans, etc. 55% 98 31% 113 Fine dining or eating at a unique local restaurant 45% 84 10% 94 Going to the beach 41% % 80 Go sightseeing or take tours 38% 76 28% 168 Visit historical sites 38% % 115 Visiting a national or state park 34% 97 10% 184 Driving on scenic byways or roads 34% 85 7% 50 Experiencing the unique culture of the area 28% % 151 Entertainment and nightlife 28% 71 3% 42 Visiting small towns and rural areas 28% 90 14%

31 Conclusions and Recommendations With an expansion of the media buy, the target audience increased significantly in With only the spot markets of Calgary, Vancouver, Edmonton and Toronto in 2008, the number of U.S. traveling households was 4.5 million. With a campaign that covered the entire country, that grew to 6.7 million in So though awareness and incremental travel were relatively unchanged, there were far more incremental trips attributed to the campaign. However, with a 30% decline in trip spending, the economic impact and ROI declined.\ When projected trips are considered, the economic impact of the 2009 campaign exceeded that of the previous year. However, the national buy cost CTTC more than a spot market buy, which lowered the return on investment Economic Impact $18.7 million $177.0 million $176.9 million ROI $24 $138 $114 Tax Revenue $1.2 million $11.3 million $11.3 million Tax ROI $2 $9 $7 However, these remain considerably strong numbers and indicate strong performance. Previous domestic campaigns have garnered a similar ROI. As new markets were targeted in 2009, a continued investment should grow awareness. This, combined with an economic recovery, will put California in the audience s consideration set and likely lead to more influenced travel from Canada. 31

32 APPENDIX CALCULATIONS 32

33 Calculations without Projected Trips Market Incremental Trips Population 4,230,836 9,230,836 12,437,470 Level of U.S. Travel 49% 49% 54% U.S. Visitors 2,073,110 4,523,110 6,729,258 Ad Recall 73.2% 61.9% 63% Ad Aware U.S. Travelers 1,517,516 2,800,897 4,257,994 Incremental Travel 0.7% 2.5% 2% Incremental Trips 10,023 68,881 95,602 Economic Impact Incremental Trips 10,023 68,881 95,602 Average Trip Expenditures $1,870 $2,570 $1,850 Economic Impact $18,743,010 $177,008,901 $176,902,887 33

34 Calculations without Projected Trips Market Return on Investment Economic Impact $18,743,010 $177,008,901 $176,902,887 Campaign Expenditures $789,000 $1,278,956 $1,548,062 ROI $24 $138 $114 General Fund ROI Incremental Trips Average Trip Expenditures $1,870 $2,570 $1,850 Economic Impact $18,743,010 $177,009,726 $176,902,887 Tax Revenue (6.38%) $1,212,673 $11,293,221 $11,286,404 Campaign Expenditures $789,000 $1,278,956 $1,548,062 ROI $1.54 $8.83 $

35 Calculations with Projected Trips Projected Incremental Trips Additional Potential Incremental Travel 2.4% 2.2% 2.6% Discount for potential travel 80.0% 80.0% 80% Projected Additional Incremental Travel 1.9% 1.8% 2.1% Ad Aware U.S. Travelers 1,517,516 2,800,897 3,964,862 Projected Additional Trips 29,225 49,222 82,469 Economic Impact Total Incremental Trips (with projections) 39, , ,071 Average Trip Expenditures $1,870 $2,570 $1,850 Economic Impact $73,391,890 $303,499,574 $329,504,506 35

36 Calculations with Projected Trips Market Return on Investment Economic Impact $73,391,890 $303,499,574 $329,504,506 Campaign Expenditures $789,000 $1,278,956 $1,548,062 ROI $93 $237 $213 General Fund ROI Total Incremental Trips (with projections) 39, , ,071 Average Trip Expenditures $1,870 $2,570 $1,850 Economic Impact $73,391,890 $303,499,574 $329,504,506 Tax Revenue (6.38%) $4,748,455 $19,363,273 $21,022,387 Campaign Expenditures $789,000 $1,278,956 $1,548,062 ROI $6 $15 $14 36

37 APPENDIX SURVEY 37

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