New Mexico Tourism Advertising ROI Study July 2015
Research Objective Longwoods International was engaged by the New Mexico Tourism Department (NMTD) to conduct a program of research designed to measure the Return-on- Investment of the New Mexico True campaign in terms of: Incremental travel to New Mexico Incremental visitor spending in New Mexico Incremental state and local taxes Impact of ad campaign and visitation on New Mexico s Economic Development Image 2
Background This research covers the campaign period from September 2013 through April 2015. The advertising investment in the 5 target markets was $2.5 million. Media employed included TV, Digital, and Out-of-Home. 3
Research Method New Mexico advertised in the 5 key fly markets of Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix. The study was conducted among an enhanced sample in each of New Mexico s five advertising markets of adult travelers (18+) residing in those markets. A Traveler is defined as a person who has taken a day and/or overnight pleasure trip anywhere in the past 3 years and intends to take another in the next 2 years The study was conducted via a major online consumer panel in May 2015. 5,005 individuals responded to the research Prior to analysis, the data was weighted on key demographic variables to ensure that the sample profile was representative of New Mexico s travel markets. 4
Research Method (Cont d) Questionnaire content included: Travel to New Mexico Respondents reported trips they took to New Mexico during and shortly after the advertising campaign. Impact of ad campaign and visitation on New Mexico s Economic Development Image Advertising Awareness Actual creative from the New Mexico True campaign was exposed and respondents reported recall of each. We use this forced exposure approach to ensure that we are measuring the State sponsored advertising only not that of New Mexico attractions and accommodation facilities. 5
Research Method (Cont d) ROI calculation: The Longwoods R.O.EYE method quantifies the relationship between awareness of campaign elements and trip taking. A baseline measure is generated to estimate the level of visitation that would have occurred in the absence of advertising activity. Using the principles and techniques of experimental design, we control for the effects of internal and external factors that could otherwise influence the result, such as economic conditions, weather, prior visitation, etc. 6
The Campaign
Main Findings
Advertising Impacts 44% of respondents in the 5 key markets of interest* were aware of at least one of New Mexico Tourism s ads. Among those who saw New Mexico ads in several types of media, ad recall was highest for internet ads (33% each). Among those who only saw ads in one medium, internet ads also had the highest recall (10%). The campaign in those 5 markets generated 895,000 incremental trips that would not otherwise have taken place, which brought $176.3 million in incremental visitor spending and $18.1 million in state and local taxes. 751,000 incremental trips were overnight trips and 144,000 were day trips. Every $1 invested in the New Mexico ad campaign in the 5 markets generated $72 in visitor spending and $7 in tax revenue for the benefit of New Mexico residents. *5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix 10
Awareness of New Mexico s Advertising Base: 5 markets aggregated Aware of Any Ad 44% 5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix 11
Awareness by Media Base: 5 markets aggregated Any Ad 44 Digital 10 33 Airport Displays 4 23 TV 4 19 Cinema 1 6 0 20 40 60 Percent 5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix + Other Media Only 12
Awareness of New Mexico s Advertising 60% 40% 20% 44% 40% 46% 46% 47% 46% 0% Combined Chicago Denver DFW Houston Phoenix 13
Incremental Trips, Spending and Taxes Due to Advertising CHI DEN PHX DFW HOU Total 5 markets Ad Investment Incremental Trips Incremental Visitor Spending Incremental Taxes $372K $333K $534K $686K $535K $2.5M 134K 190K 214K 200K 157K 895K $ 29.5M $ 32.1M $ 36.1M $ 44.1M $ 34.6M $176.3M $ 3M $ 3.3M $ 3.7M $ 4.5M $ 3.5M $18.1M Ad Investment excludes Production/Other Costs Visitor spending based on Avg. Per-Person Expenditures = $220.34 for overnight visitors; $74.88 for day visitors Effective Direct Tax rates developed from 2012 NM economic impact report = 10.3% 14
Incremental Trips due to Advertising CHI DEN PHX DFW HOU Total 5 markets Overnight Trips 134K 123K 138K 200K 157K 751K Day Trips - 67K 76K - - 144K Total Trips 134K 190K 214K 200K 157K 895K 15
Campaign Efficiency CHI DEN PHX DFW HOU Total 5 markets Ad $ s per Trip Trips per Ad $ $2.78 $1.75 $2.50 $3.43 $3.41 $2.75 0.4 0.6 0.4 0.3 0.3 0.4 16
The Bottom Line CHI DEN PHX DFW HOU Total 5 markets Spending ROI $79 $96 $68 $64 $65 $72 Tax ROI $8 $10 $7 $7 $7 $7 17
Media Diagnostics
Definition of Awareness TV + Magazine + TV Only Magazine Only Both 19
Awareness by Media Base: 5 markets aggregated Any Ad 44 Internet 10 33 Airport Displays 4 23 TV 4 19 Cinema 1 6 0 20 40 60 Percent 5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix + Other Media Only 20
Total Impressions by Media Base: 5 markets aggregated 60 Media Spend: TV Airport Displays Cinema Internet $0.99M $0.65M $0.52M $0.30M Millions of Impressions 40 20 44.9 0 15.4 11.6 3.6 Internet TV Airport Displays Cinema 5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix 21
Impact on Visitation by Media Base: 5 markets aggregated 60 Percent Who Visited 40 20 23 33 15 42 38 35 34 0 Total Aware Unaware Airport Displays+ TV+ Internet+ Cinema+ 5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix 22
Percent Who Visited Impact on Visitation by Market 60 40 20 0 41 39 33 34 26 28 27 24 15 17 13 8 Combined Denver Phoenix Dallas Houston Chicago Aware Unaware 23
% Visited New Mexico Impact of Ad Frequency on Visits to New Mexico Base: 5 markets aggregated Below Optimal Optimal Diminishing Mean = 9 Median = 5 Number of Times Seen/Heard Ads 5 markets are Chicago, Denver, Dallas/Ft. Worth, Houston, Phoenix 24
Venturesome Definition: The Venturesome Traveler was defined as those who strongly agreed (answered 7-10 on a 10 point scale where 1 = Do not agree and 10 = Strongly agree) with at least 3 of the following 4 statements: 1) My family and friends often ask my advice on travel matters (Opinion leader) 2) I love hunting out the newest travel experiences before anyone else catches on to them (Early adopter) 3) I frequently search the internet or magazines for information about travel destinations I'm interested in (High information seeking behavior) 4) I often go out of my way to find travel destinations that offer really genuine, authentic experiences (Seeks authentic travel experiences)
Venturesome vs. Non-Venturesome by Market 100 80 38 39 39 39 42 34 60 Percent 40 20 62 61 61 61 59 66 0 All 5 markets Chicago Denver DFW Houston Phoenix Non-Venturesome Venturesome 26
Awareness by Market - Venturesome Base: 5 markets aggregated Combined 37 56 Phoenix Houston Denver Dallas 38 40 40 40 60 58 57 56 Chicago 31 53 0 20 40 60 80 Percent Venturesome Non-Venturesome * Note: + Other Media 27
Awareness by Media Platform - Venturesome Base: 5 markets aggregated Any Ad 37 56 Internet 26 45 Airport Displays 16 35 TV 16 24 Cinema 5 8 0 20 40 60 80 Percent Venturesome Non-Venturesome * Note: + Other Media 28
Percent Who Visited Impact on Visitation by Market - Venturesome 60 40 56 55 20 46 40 45 41 41 24 30 28 19 15 0 Combined Phoenix Denver Dallas Houston Chicago Aware Unaware 29
Economic Development Methodology: Respondents were asked to provide their personal impression of each travel destination by using a rating scale from 1 to 10, where 1 = Do Not Agree and 10 = Strongly Agree for each of the following economic development attributes: 1) A good place to live 2) A good place to start a career 3) A good place to start a business 4) A good place to attend college 5) A good place to purchase a vacation home 6) A good place to retire The research compared the ratings of those who strongly agreed (answered 7-10 on the 10 point scale) for those who had not seen the tourism ads or visited the destination in the past year and those who did see the tourism ads and/or visited in the past year.
Impact of New Mexico 2014 Tourism Campaign on State s Economic Development Image Base: Out-of-State Residents A good place to live +84% A good place to start a career A good place to start a business A good place to attend college +154% +133% +141% A good place to purchase a vacation home A good place to retire +107% +76% 0 10 20 30 40 50 60 Percent Who Strongly Agree Aware Unaware
Impact of Visitation on New Mexico Economic Development Image Base: Out-of-State Residents A good place to live A good place to start a career A good place to start a business A good place to attend college A good place to purchase a vacation home A good place to retire +90% +175% +168% +151% +119% +86% 0 20 40 60 80 Percent Who Strongly Agree Visited Past Year Not Visited
A Good Place to Live % Image Lift Advertising 84 Visitation 90 Advertising Plus Visitation 169 0 50 100 150 200 250 300 Percent
A Good Place to Start a Career % Image Lift Advertising 154 Visitation 175 Advertising Plus Visitation 355 0 100 200 300 400 Percent
A Good Place to Start a Business % Image Lift Advertising 133 Visitation 168 Advertising Plus Visitation 327 0 100 200 300 400 Percent
A Good Place to Attend College % Image Lift Advertising 141 Visitation 151 Advertising Plus Visitation 318 0 100 200 300 400 Percent
A Good Place to Purchase a Vacation Home % Image Lift Advertising 107 Visitation 119 Advertising Plus Visitation 233 0 50 100 150 200 250 300 Percent
A Good Place to Retire % Image Lift Advertising 76 Visitation 86 Advertising Plus Visitation 154 0 50 100 150 200 Percent