Canadian Market Ad Effectiveness ROI February 2012 Prepared by Strategic Marketing & Research, Inc.
Background & Objectives Visit California began substantial marketing efforts in Canada in 2007, which involved consumer advertising. Initially the consumer marketing was targeted in three spot markets in Western Canada, and the spot buy extended to Toronto in 2008. Successes in those spot markets encouraged Visit California to target the entire county since 2009. It also became clear as other international markets were targeted that Canadian consumers reactions were actually more similar to the domestic market. So, for 2011 there was a more integrated North American marketing effort that included Canada and the U.S. As with other markets, the effectiveness of the advertising efforts in Canada are measured with a wave to measure awareness of the creative, followed by a travel wave that focuses on the ROI. This year there were both spring and fall awareness waves for Canada, and this represents that travel wave. The goal of this wave is to measure the level of travel attributable to the marketing efforts and to calculate the return on investment from the advertising. The research also explores travel behavior and gathers information to assist Visit California in refining future marketing efforts in Canada. www.smari.com 2
Methodology 1,281 completed interviews Data collection in February 2012 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 the U.S. in the past 2 years or were likely to travel to the U.S. in next 2 years 67% of Canadian households qualified Market Interviews Western Canada 424 Toronto 427 Remaining National 430 Total 1,281 www.smari.com 3
The Advertising Campaign The overall spending in Canada this year was higher than in the past few years, totaling almost $1.8 million. The advertising included the brand spot, Misconceptions, as well as a cooperative advertising program featuring the food & wine spot Good Life, tagged by Air Canada. The campaign also included the new rural spot, Out There. Finally, the campaign included a print component. Media Spending $1,768,157 $1,278,956 $1,548,062 $1,380,006 Type Expenditure CA Brand National Television $769,793 CA Wine & Food National TV $150,109 CA Outdoor Adventure National TV $136,914 Spot Market TV (CA Wine & Food) $405,648 CA Brand Print (True Californians) $216,281 2008 2009 2010 2011 Pre-roll TV $89,412 Total $1,768,157 www.smari.com 4
CONCLUSIONS www.smari.com 5
Conclusions The marketing campaign in Canada was quite successful this year, generating approximately $300 million in incremental spending and a tax ROI of $12 for each $1 spent. These results are similar to 2008 and 2009 and much better than 2010. Economic Impact 2008 2009 2010 2011 $303.5 million $330 million $101.1 million $300.5 million ROI $237 $213 $73 $170 Tax Revenue $19.4 million $21 million $6.5 million $20.7 million Tax ROI $15 $14 $5 $12 At the same time, the study indicated that the market in Canada is changing. Currently Canada is considered part of the North American campaign with the U.S. and Canadians are behaving this way. Advertising recall is at saturation levels (73%) and travel is quite strong. With concentrated marketing efforts for the past several years, this level of familiarity is evident throughout the country not just in Western Canada. As a result, it is difficult to generate incremental visitation among those with ad recall. Instead this year the impact was generated through more repeat travel among those with recall and a higher level of projected visitation. The key to future success will be generating more repeat visitation, and this may require refinement of the strategy. The cooperative effort with Air Canada that promoted a specific event Restaurant Month is a good way to give people another reason to visit. www.smari.com 6
Conclusions With such strong awareness of the brand message, it is important to find ways to provide more depth of message and perhaps more specifics. Interestingly, the use of the Out There message paired with Good Life seems well designed to work with the Toronto audience. They are looking for scenic beauty and more rural activities when they visit, along with wineries and fine dining. All measures indicated that exposure to multiple media or multiple messages spurred more interest and higher levels of visitation so it will be important to continue to provide layered messaging. The high levels of satisfaction and willingness to recommend suggest that generating repeat visitation is a strategy that would work well. It is also interesting to note that many visitors indicated that they used paid accommodations and stayed with friends and relatives, too so these trips may combine purposes. The research also explored how visitors get information on their trip and share it afterward. Laptop computers are the most important, followed by desktops and smart phones. Social media outlets are much less prevalent especially in terms of getting information. This suggests that Visit California should focus efforts on maximizing the usefulness of its website and mobile website. Tablet usage was higher than either Facebook or Twitter. www.smari.com 7
AWARENESS REVIEW www.smari.com 8
Advertising Recall Last year, with the introduction of a new brand television ad, recall dropped across all markets. With the continued use of existing creative augmented with the new Out There spot and the cooperative effort with Air Canada ad recall increased significantly this year. It is also noteworthy that recall is high across all the market areas, and that as a result the campaign was able to reach more households this year compared to any previous measure. 78% 73% 73% 68% 69% Recall By Region Targeted Households 76% 73% 64% 57% 56% 60% 58% Western Canada Toronto Remaining National 2007 2008 2009 2010 2011 Awareness Aware Households 2007 2,073,110 73% 1,517,516 2008 4,523,110 62% 2,799,805 2009 6,729,258 63% 4,257,994 2010 7,293,216 59% 4,309,053 2011 8,380,842 73% 6,181,841 www.smari.com 9
Advertising Recall Total recall is driven by television in this market, as in the other Visit California markets. Recall of the other media magazine and the CMG insert is fairly low and drives only a slight increase in overall recall. The major driver of television recall is the Misconceptions ad, with the Good Life (food & wine) cooperative ad generating reasonable recall given the level of rotation. Since the Out There ad is new and its usage in the rotation was light, recall is still fairly low. Recall By Media 66.5% Recall By Ad 72% 74% 22.9% 7% 10% 13.7% Television Magazine CMG Total Recall Misconceptions Good Life Out There www.smari.com 10
Advertising Recall As noted, the geographic focus of the advertising has changed over the past few years, and the budget has also varied. Therefore, a good way to compare years is to look at the cost to reach an aware household. The initial campaigns in Canada were able to generate high recall but only within Western Canada. As the scope of the buy expanded, the level of recall fell, but the buy was reaching more households. Now, the level of recall is quite high (73%) across Canada nationally. The result is that the cost to reach an aware household was $0.29, which is the lowest to be achieved in this market. Year Targeted HHs Recall Aware HHs Media CPH 2007 2,073,110 73% 1,517,516 $789,000 $0.52 2008 4,523,110 62% 2,799,805 $1,278,956 $0.46 2009 6,729,258 63% 4,257,994 $1,548,062 $0.36 2010 7,293,216 59% 4,309,053 $1,380,006 $0.32 2011 8,380,842 73% 6,181,841 $1,768,157 $0.29 www.smari.com 11
TRAVEL BEHAVIOR www.smari.com 12
Travel Behavior Before considering the impact of the advertising in terms of generating travel, it is useful to review overall travel behavior. Visitation to California varies significantly among the three geographies that are considered in Canada. The level of travel is high in Western California, and only Washington state is more popular. Only 10% of Toronto residents report a trip they are much more likely to visit New York and Florida. The same is true for the rest of the country, with travel to California at only 8%. State Western Canada Toronto Remaining National Texas 1% 3% 4% Florida 5% 27% 19% Nevada 13% 6% 10% California 16% 10% 8% Utah 2% 1% 3% New York 4% 41% 31% Hawaii 5% 5% 5% Colorado 1% 1% 3% Arizona 6% 3% 5% Oregon 7% 0% 4% Washington 41% 4% 9% www.smari.com 13
Travel Behavior The Canadian market is still more pessimistic than the domestic market, and a larger percentage indicates that they will make choices to limit travel in the coming year. Still, the numbers are fairly small, indicating that most of the population is returning to more normal levels of travel and normal patterns of spending. Activity Canada Domestic Will take fewer trips 13.6% 8.5% Will choose closer destinations 12.4% 9.0% Will take shorter trips 11.3% 8.5% Spend less money on leisure travel 14.7% 10.8% Stay with VFR vs. paid accommodations 14.7% 11.2% Choose to drive vs. fly 30.1% 22.2% www.smari.com 14
California Travel The competitive set also varies somewhat, especially for Toronto and the remaining national areas. In these areas a higher percentage of consumers report trips to the U.S., but not to any of the states included in the competitive analysis in this study. Residents of Western Canada are also much more likely to visit California annually although this still is only about 6% of the residents. But other areas of the country are even less likely to make an annual visit to the state. Region Visit other parts of U.S. Visit CA annually Western Canada 8.2% 5.9% Toronto 15.0% 3.5% National 20.3% 2.1% www.smari.com 15
IMPACT OF THE ADVERTISING www.smari.com 16
Incremental Travel The SMARI methodology for measuring the impact of a marketing campaign is based on the difference in the rate of travel between those who are aware of the ads and those who are unaware of the ads. Any travel to the state from Canadians who have not seen the marketing is considered the base. Any travel above that is considered influenced. This year, there was no incremental travel measured among those with advertising recall. Of course, part of the challenge is that the recall of the advertising is so high but those who reported no recall actually reported higher levels of travel to California during 2011. Awareness By Market 33% 25% 15% 13% 10% 8% Western Canada Toronto Remaining National Not aware Ad aware Incremental www.smari.com 17
Incremental Travel When the level of advertising recall is so high, it becomes difficult to generate more travelers but the advertising can generate more trips. In this case, there was a higher frequency of visitation to California (more repeat travel) among those with ad recall. There were approximately 83,000 trips generated in repeat travel. With this year s campaign, the cooperative effort with Air Canada, which focused on a specific activity (Restaurant Month), may have helped drive repeat travel. In mature markets, providing specific reasons to travel can be an effective strategy. Repeat Visitation Western Canada Toronto Remaining National Total Traveling Households 187,397 113,141 275,496 576,034 Repeat Visitation 0.24 0.01 0.13 0.14 Trips 45,350 1,358 36,641 83,349 www.smari.com 18
Incremental Travel While there was no incremental travel generated among those with advertising awareness, there is incremental projected travel. This means that there are more people who indicate that they already have a trip planned among those with advertising recall. In total, the projected travel represents about 80,000 trips to California. 2.9% Projected Travel 4.2% 1.3% Not Aware Ad Aware Increment www.smari.com 19
Incremental Travel When the incremental projected trips, as well as the additional repeat visitation, is counted, the advertising impacted almost 164,000 trips this year. This is much higher than in 2010, although slightly lower than 2009. The prevalence of repeat visitation highlights the importance of messaging that helps give people another reason to visit or drives them to the website to find additional reasons. 200,000 Impacted Trips 150,000 100,000 49,222 82,469 83,349 50,000 68,881 95,602-66,292 80,406 - - 2008 2009 2010 2011 Incremental Trips Projected Trips Repeat Visitation www.smari.com 20
Incremental Travel by Medium As reviewed, TV elements of the campaign drive awareness, with few households being aware of only print or the CMG insert. However, the additional media or additional messages play an important role in generating travel. Whether consumers are exposed to additional media (print or CMG insert) or whether they see multiple television ads, the results are more positive and travel increases. The combination of messages is better at communicating the abundance theme. Incremental Travel By Media Media Overlap 18% 26% 21% 12% 12% 14% 11% 15% 11% 11% 10% 6% 0% TV Print CMG Not aware Ad aware Incremental No Ads One TV Ad Two TV Ads Three TV Ads www.smari.com 21
Impact on Trip Specifics The advertising also seems to have some impact on the specifics of the trips that people take to California. Those who recall the advertising are less likely to take a family vacation, and more likely to take other types of trips. They also spend more money on their trips. One noteworthy finding is that the advertising and the cooperative program promoting Restaurant Month seem to have had a strong impact and generated more food & wine trips. Trip Specifics No Recall Ad Recall Family vacation 75% 64% Took Wine & Food Trip Romantic getaway 8% 11% Weekend getaway 2% 11% Girlfriend getaway 4% 9% Men only trip 1% 7% 10.2% Beach vacation 1% 7% Wine & food trip 4% 6% 4.1% 6.5% Trip Expenditures $1,683 $1,911 No ad recall Ad Recall Recall Good Life www.smari.com 22
ECONOMIC IMPACT & ROI www.smari.com 23
Economic Impact and ROI The economic impact for incremental trips this year is up from 2010, but still not as high as in 2008 and 2009. And when projected travel is included, while the increase compared to last year is substantial it is still not as high as 2009. The maturity of this market is making it difficult to influence travel, and the strategy needs to address this issue. Economic Impact $370 $304 $300.5 $18.7 $73 $177 $177 $101 $101 $153 2007 2008 2009 2010 2011 Economic Impact With Projected www.smari.com 24
Economic Impact and ROI The media budget for 2011 was increased compared to 2010, but the investment paid off. The ROI is higher this year, especially when projected travel is included. But the return is still less than in 2008 and 2009. $250 $200 Return on Investment $237 $213 $170 $150 $138 $100 $93 $114 $73 $73 $86 $50 $- $24 2007 2008 2009 2010 2011 No Projected Trips With Projected Trips www.smari.com 25
Economic Impact & ROI Tax revenue generated through the incremental travel was $10.5 million, and raises to $20.7 when projected travel is included. This translates into tax ROI of $5.96, and $11.71 (with projected). This is a strong return on the increased budget for this market. Tax Revenue Tax ROI Millions $25 $20 $15 $10 $5 $4.7 $1.2 $19.4 $21.0 $11.3 $11.3 $6.6 $6.5 $20.7 $10.5 $20 $15 $10 $5 $2 $6 $15 $9 $14 $7 $5 $5 $12 $6 $0 2007 2008 2009 2010 2011 $- 2007 2008 2009 2010 2011 No Projected Trips With Projected Trips No Projected Trips With Projected Trips Note: Tax rate used was 6.9% in 2010/11, 6.38% in 2008, 2009, and 6.47% in 2007. www.smari.com 26
TRIP SPECIFICS www.smari.com 27
Trip Specifics Canadians traveling to California do so in different ways depending on their geography. Some of the differences are worth noting. Visitors from Toronto are the most likely to be couples, spend the most time and have the smallest travel party. Those traveling from the remaining national market are much more likely to be families. The visitors from Western Canada take the widest variety of types of trips and spend the most money. Western Canada Toronto Remaining National People on trip 2.8 2.3 3.0 Kids on trip 28% 27% 45% Nights spent 7.7 8.3 7.0 Total spending $2,066 $1,869 $1,676 Western Canada Toronto Remaining National Couple 45.5% 54.1% 42.9% Family traveling with children 23.9% 29.7% 53.6% Extended family 9.1% 8.1% 0% Women-only trip 10.2% 2.7% 3.6% Male-only trip 4.5% 2.7% 0% Other 6.8% 2.7% 0% www.smari.com 28
Trip Specifics These differences are also evident when visitors classify their trips: Those from Western Canada take a different mix of trips, including the most wine and food trips. Those from Toronto generally take family vacations (although findings suggest that a family vacation often doesn t include kids), and are also the most likely to take a beach vacation. Visitors from the rest of the country almost always classify their trip as a family vacation, although they had the highest percentage of men only trips. Type Western Canada Toronto Remaining National Family vacation 45% 63% 83% Romantic getaway 13% 13% 7% Weekend getaway 9% 11% 7% Girlfriend getaway 9% 7% 7% Men only trip 5% 2% 7% Beach vacation 4% 11% 3% Wine & food trip 10% 4% 3% www.smari.com 29
Trip Specifics The majority of Canadians use paid accommodations when they visit California, although significant numbers also stay with friends or relatives. This suggests that they are combining trips and visiting multiple areas of the state as part of their trip. Type Western Canada Toronto Remaining National Use paid accommodations 80.8% 73.9% 83.3% Stay with friends 26.3% 52.2% 23.3% As should be expected, most fly to California, especially from Toronto. Mode Western Canada Toronto Remaining National Drive 25.3% 8.7% 26.7% Airplane 69.7% 89.1% 70.0% Other 5.1% 2.2% 3.3% www.smari.com 30
Trip Specifics The supposition that the trips have a combined purpose is supported in terms of where visitors go and the number of regions visited. There are some significant differences in areas of visitation from the different regions. Interestingly, those from Western Canada visit the fewest areas of California, even though their trips are generally as long. Toronto visitors take the longest trips and visit the most regions of the state. The Los Angeles area is the most visited for all segments of the Canadian visitors Region Western Canada Toronto Remaining National Los Angeles County 44% 63% 43% Orange County 26% 26% 33% San Francisco Bay Area 25% 24% 37% Desert Area 24% 30% 30% San Diego County Area 21% 22% 30% Central Coast 20% 30% 13% North Coast 8% 13% 7% Shasta Cascade 7% 4% 7% Central Valley Area 6% 9% 3% Gold Country 5% 15% 7% Sacramento High Sierra 3% 11% 10% Inland Empire Area 2% 13% 10% Avg. # visited 1.9 2.6 2.3 Length of Trip 7.7 8.3 7.0 www.smari.com 31
Trip Motivators The survey explores both what people do on their trips in California and what motivates their destination selections. There are some noteworthy differences by region. Those in Toronto are much more likely to be motivated by scenery and natural beauty, as well as by wineries and fine dining. Those in other areas are more interested in theme parks, the beach, golf and other activities. The prevalence of golf trips may relate to the men only category. Activity Western Canada Toronto Remaining National Viewing and enjoying natural scenery 22.2% 41.3% 20.0% Visiting a theme or amusement park 20.2% 10.9% 26.7% Shopping 17.2% 15.2% 16.7% Visiting a winery 11.1% 13.0% 6.7% Fine dining 11.1% 15.2% 10.0% Going to the beach 11.1% 8.7% 13.3% Golf 10.1% 4.3% 10.0% Experiencing the unique culture 9.1% 8.7% 10.0% Driving on scenic byways or roads 7.1% 21.7% 6.7% Visit historical sites 7.1% 6.5% 6.7% Go sightseeing or take tours 6.1% 8.7% 23.3% Arts activities such as museums, theater performances 6.1% 2.2% 6.7% Entertainment and nightlife 6.1% 6.5% 0.0% Visiting a national or state park 5.1% 13.0% 6.7% Visiting a spa 4.0% 2.2% 3.3% Visiting activities that are fun for small children 4.0% 2.2% 6.7% Visiting small towns and rural areas 3.0% 6.5% 0.0% Gambling 3.0% 4.3% 6.7% Hiking or camping 3.0% 4.3% 6.7% Watching sporting events 3.0% 4.3% 3.3% Boating or other water activities 2.0% 0.0% 0.0% Adventure activities 0.0% 0.0% 3.3% www.smari.com 32
Trip Satisfaction One positive factor is the favorable response that visitors have toward their trips. The majority rate the trip as excellent or very good and almost all say they are very likely to recommend California to friends and family. As noted, given the maturity of the market, promoting repeat visitation makes sense and this suggests the strategy would be effective. Trip Experience Likelihood to Recommend 1.0% 8.1% 2.2% 8.7% 51.5% 39.1% 3.3% 33.3% 18.2% 28.3% 16.7% 39.4% 50.0% 63.3% 81.8% 71.7% 83.3% Western Canada Toronto Remaining National Western Canada Toronto Remaining National Excellent Very Good Good Fair Very Likely Somewhat Likely www.smari.com 33
Trip Specifics Information Visitors generally don t indicate that they were likely to use electronic sources to gather information during their trip. The only source that was used by a majority was a laptop, with 46% using a laptop to get information during their trip. Other popular devices were a desktop computer, followed by a smart phone. Social media were the least used sources, with only 10% using Twitter either during or after the trip. While social media is certainly popular, it is not necessarily a source for travel information at this point, or a good option for disseminating information. These findings suggest that Visit California should focus on having information available on its website and having a mobile optimized website for consumers. Usage Facebook Twitter Computer Laptop Tablet Smart phone Get info during the trip 12% 7% 29% 46% 17% 28% Share info after the trip 24% 7% 21% 25% 8% 14% Total Used 29% 10% 42% 56% 19% 34% www.smari.com 34
APPENDIX CALCULATIONS www.smari.com 35
Economic Impact and ROI 2007 2008 2009 2010 2011 Aware Households Population 4,230,836 9,230,836 12,437,470 12,437,470 12,437,470 Level of U.S. Travel 49% 49% 54% 59% 68% U.S. Visitors 2,073,110 4,523,110 6,729,258 7,293,216 7,293,216 Ad Recall 73.2% 61.9% 63% 59% 73.80% Ad Aware U.S. Travelers 1,517,516 2,800,897 4,257,994 4,309,053 5,382,393 Economic Impact Incremental Trips 39,000 118,000 178,000 66,292 163,754 Average Trip Expenditures $1,870 $2,570 $1,850 $1,526 $1,835 Economic Impact $73,400,000 $303,500,000 $330,000,000 $101,130,965 $300,489,400 www.smari.com 36
Economic Impact and ROI Return on Investment 2007 2008 2009 2010 2011 Economic Impact $73,400,000 $303,500,000 $330,000,000 $101,130,965 $300,489,400 Campaign Expenditures $789,000 $1,278,956 $1,548,062 $1,380,006 $1,768,157 ROI $87 $237 $213 $73 $170 General Fund ROI Incremental Trips 39,000 118,000 178,000 66,292 163,754 Average Trip Expenditures $1,870 $2,570 $1,850 $1,526 $1,835 Economic Impact $73,400,000 $303,500,000 $330,000,000 $101,130,965 $300,489,400 Tax Revenue (6.38%) $4,700,000 $19,400,000 $21,000,000 $6,452,156 $20,709,729 Campaign Expenditures $789,000 $1,278,956 $1,548,062 $1,380,006 $1,768,157 ROI $5.50 $15 $14 $5 $12 www.smari.com 37