Domestic Advertising Total 2010 ROI Research Summary May 2011 Prepared by Strategic Marketing & Research, Inc.
Table of Contents Conclusions and Recommendations 3 Methodology 6 2010 Advertising Campaign 7 Recall and Impact 8 Impact and ROI 16 Strategic Considerations 20 Appendix Advertisements 32 Appendix Questionnaire 36 www.smari.com 2
Conclusions & Recommendations The 2010 campaign generated more than 3.54 million incremental visits to California, which is up from 3.35 million last year. Additionally, per trip spending increased from $1,248 to $1,315. The result is that the economic impact increased from $4.2 billion to $4.7 billion for 2010. At the same time, the media budget to achieve these improvements was also increased by 18%. As a result, there was a slight decline in the ROI, from $305 to $289, and in the tax ROI, which decreased from $20 to $18. Yet, CTTC has one of the highest ROIs in the country. One reason for the increase in incremental trips was that the advertising recall continues to climb. Since it is already extremely high, the increases are small but the new television ad helped generate additional recall. The ad gets strong positive response and builds on the past successful brand efforts. The increase in recall of the online advertising is noteworthy. Recall increased from 8% to 34%. In part this may be due to including more of the online ads in the research, but this component of the media plan does contribute to awareness and creates a synergy with the television and print. It is important to note that this is a measure of recall not just exposure, so consumers are noticing and being influenced by the messages. The campaign was again successful and the image of the state remains strong. Several strategic issues also were explored in the research. www.smari.com 3
Conclusions & Recommendations One issue explored was the competitive situation during the decision process. Interestingly, consumers reported considering a limited number of destinations when deciding to come to California. In fact, 46% indicated it was the only place they considered. The average number of places considered was 2.2. This result seems different from other research that suggests because of the web, people consider many different options and can be influenced late in the planning. Of course, in part this may be a specific finding for California. It also may relate to how consumers define consideration or whether they recall the decision process clearly. This issue should be explored further, but the implication is that if there is limited consideration, branding is critical as California needs to be at the top of the consideration set to garner visitation. Additionally, familiarity is strongly related to likelihood to visit, so creating a deeper and broader brand awareness will supportinterest and visitation. Repeat travel is a major component of visitation to California, with half the respondents reporting more than one trip during 2010. In part this is driven by residents, but even among the national audience 23% report more than one trip. This level of repeat visitation is actually similar to other major competitors and suggests that people are likely to return to the same places or at least the same states. Additional research should be conducted to better understand what drives repeat travel do people go to the same places and do the same things, or are they taking different types of trips to the state. For example, is one trip a family trip, and the other a girlfriend getaway. A clearer understanding of the trip composition can help clarify the marketing challenges and opportunities. www.smari.com 4
Conclusions & Recommendations In the context of repeat visitation and trip types, family vacations are most prevalent. More than half of those who visited California report this as the main purpose of their trip. Weekend and romantic getaways are the next most popular types of trips, with men-only trips being least prevalent. In terms of opportunity, trips focused on wine and food report the highest per trip expenditures. The usage of technology during and after trips was also included in the research. During their trips people are most likely to use laptops and smart phones to get information. Social media usage for this purpose is extremely low. Facebook is popular for sharing trip information, but still only used by about a quarter of the visitors. Smart phones and mobile access are important given their high level of usage and increasing penetration of smart phones. Usage of Twitter is extremely small, and tablet usage is also fairly low. Usage does vary by age, so these trends will change as the population ages. When visitation is explored by region, the majority of California visitors went to the urban regions (86%), while 42% included visitation to both urban and rural regions. Only 13% reported only visiting the rural regions. Interestingly there are not major differences in the activities and motivators among people choosing urban versus rural regions, so access and familiarity may be driving the decisions more than activity choices. www.smari.com 5
Methodology 3,985 completed interviews Data collection in March 2011 Web-based data-collection methodology National sample Show ads to accurately measure recall Target of households with $50K+ income Surveyed by market, and weighted to be representative This is the ROI measure for the 2010 California Travel & Tourism Commission (CTTC) campaign; it includes the 2010/2011 winter campaign. Market Primary Domestic 829 Remaining Western 882 California 674 Remaining National 1,600 Total 3,985 www.smari.com 6
2010 Advertising Campaign The budget for calendar year 2010 increased from $13.7 million to $16.2 million. This represents an 18% increase compared to 2009 The budget allocation for these efforts was: Spring 2010 $8.9 million Fall/Winter2010 $7.2 million Total $16.2 million The total included support for a new television ad, Misconceptions, which replaced the Serious Business ad that was used for 2 years. The Misconceptions ad began airing in Fall 2010. There were also additional print and online ads launched during the year. Copies of the ads tested are included in the appendix. www.smari.com 7
RECALL & IMPACT www.smari.com 8
Advertising Recall The increase in advertising, coupled with the new Misconceptions ad resulted in an increase in overall awareness from 72.1% to 78.2%. The cost to reach an aware household was $0.38, which is well below the mark of $0.50 that is average across the other states SMARI measures, although a bit higher than last year s $0.36. Ad Recall by Media 72.5% 69.3% 65.2% 34.5% 78.2% 74.2% 72.1% 22.0% 22.5% 12.8% 8% 3.5% Television Print On-line Total 2008 2009 2010 The biggest increase in recall was for the online advertising, which jumped significantly. But recall of the television advertising also increased. A review of recall of specific ads will provide info for CTTC to evaluate the impact of various ads and whether differences in recall are due to placement/rotation or due to the ability of the ad to generate recall. www.smari.com 9
Television Recall As noted, television recall was up this year, from 69% to 73%. The total recall was a combination of recall of the four spots that were used in 2010. The new spot, Misconceptions had the highest recall, followed by Serious Business. The food & wine spot (You ll be Back) has developed strong awareness over time. The winter spot gets less rotation and has lower recall. Earlier testing of Misconceptions indicated that the use of Betty White was appealing, and helped boost the memorability of the ad. 43% You'll Be Back 2010 Television Recall 21% Ambitious Revise 55% Serious Business 59% 73% MisconceptionsTotal Television Aware www.smari.com 10
Print Recall The recall of each of the print ads was generally low, but the combination of ads resulted in 23% recall. The Jim Moriarty ad received the highest recall, which may have been due to where and how it was used. The recall of the specific ads should be reviewed in the context of placement and circulation. 3% 6% Recall of Specific Print Ads 13% 7% 4% 4% 4% 23% Beth Rodden Charles Phan Elon Musk Jim Moriarty Ad Revised Glen Plake CMG Fall US Spread CMG Fall Domestic Full Page Total Print Recall www.smari.com 11
Online Recall The online recall measure increased substantially this year, from 8% to 35%. In part, this could be due to more ads being included in the measure. But it also probably represents a stronger online presence. As with print, the recall of specific ads is fairly low, but the combined impact is significant. One of the online ads (The Game), which included parts of the television commercial, was not included in the online measurement recall was high, but overlapped almost completely with television. 7% Game Banner 6% Game Banner 12% Pack More Recall of Online Ads 4% California Fives - 1 11% 11% California California Fives - 2 Fives - 3 15% Winter Generic Group Together 6% 5% 5% Rock Stars Group Together Swimsuit Models Group Together 35% Movie Total Online Recall Producers Group Together www.smari.com 12
Media Overlap One of the factors that has proven to be important in generating more travel is the ability to communicate the abundance message about California. The use of multiple ads has helped promote the many things to see and do. And recall of multiple campaigns has been strongly linked to increased travel. This year the recall of multiple campaigns increased dramatically, with two-thirds of the respondents recalling three or more. There were more themes to recall, and this helped generate stronger media overlap. 45% Recall of Multiple Campaigns 39% 36% 35% 26% 19% 17% 16% 2008 2009 2010 One Two Three or More 66% www.smari.com 13
Impact of Media This year recall of the online media was explored in more depth. A key finding was that recall of the advertising was high. Yet, with the high level of television recall, online is generally supporting TV, with 3.4% of the respondents only recalling online ads. In fact, the impact of either television or online alone is not nearly as strong as the combination. Role of Media in Recall 25.2% 25.4% 18% 19.6% TV only Online only Online & TV All three media www.smari.com 14
Advertising Recall by Market The final levels of awareness by market show a range from 82% of those in the Primary Domestic markets reporting recall down to 78% in the National markets. Recall by Market 83% 82% 82% 79% 79% 81% 78% 78% 78% 75% 72% 72% 74% 71% 72% Recall was up generally, as noted through a mix of stronger television recall and a significant increase in the online recall. Primary Domestic Other West In-State National Total 2008 2009 2010 www.smari.com 15
IMPACT & ROI www.smari.com 16
Incremental & Repeat Travel The result is that the 2010 advertising generated 3.5 million additional trips to California. The largest number of trips (49%) were generated from In-state residents, and the majority of these were additional repeat trips. The National market also generated a strong percentage of these trips. The impact of the Primary markets, in terms of incremental trips, was down this year. Market 2008 2009 2010 % of Total Primary 424,693 453,909 288,476 8% Remaining West 578,508 288,004 119,987 3% Other National 2,026,009 1,369,994 1,411,190 40% In-state 618,069 1,237,819 1,723,774 49% Total 3,647,279 3,349,726 3,543,427 www.smari.com 17
Trip Spending In addition to an increase in the number of incremental trips, there was also an increase in the average trip spending. It still has not returned to the levels measured during 2008, but the total spending represents a 5% increase over 2009. Spending per Person per Day $1,348 $1,248 $1,315 Calendar 2008 Calendar 2009 Calendar 2010 www.smari.com 18
Economic Impact & ROI The total economic impact generated by the campaign is approximately $4.7 billion, and this represents $298.3 million in state and local taxes. With the campaign expenditures at $16 million, this translates into an ROI of $291 and a tax ROI of $19. ROI 2009 2010 Trips 3,349,727 3,543,427 Average Expenditures $1,248 $1,315 Economic Impact $4.2 billion $4.7 billion Tax Revenue $268.4 million $298.3 million Campaign Expenditures $13.7 million $16.2 million ROI $305 $289 General Fund ROI $20 $18 www.smari.com 19
STRATEGIC CONSIDERATIONS www.smari.com 20
Destination Consideration A new issue that was evaluated in this research was how many destinations consumers consider as part of the decision process. Interestingly, almost half of the California visitors indicated that they only considered one destination, and the overall average is just slightly greater than 2. This is a different picture of the decision process than some of the findings presented about online travel shopping, where people click through to numerous sites and seem to consider multiple destinations. It could be that people don t recall how many places they considered, or that their search behavior doesn t represent real consideration. This is a topic that should be explored further, as it has implications regarding branding versus point of purchase promotions and advertising. Number of Destinations Considered Average 2.2 Three, 17% Four+, 13% Two, 25% One destination, 46% www.smari.com 21
Destination Consideration Certain types of trips romantic getaways, wine & food and beach trips include more options. It would be interesting to explore why these trips include more options than family vacations, where multiple interests have to be met. Past research SMARI has done shows that when picking family destinations people tend to be less adventurous and less willing to try new places, and perhaps this translates into considering fewer options. It is interesting that residents consider the most options when visiting perhaps due to their level of familiarity with the state. Type of Trip Avg. Family vacation 2.3 Romantic getaway 2.7 Weekend getaway 2.1 Girlfriend getaway 1.9 Men only trip 2.4 Beach vacation 3.7 Wine or food trip 2.8 Origin Market Avg. Primary Feeder 1.9 Other Western 2.1 California 2.4 National 2.0 www.smari.com 22
Destination Consideration It is also interesting that the number of destinations is similar regardless of how long people take to plan their trip. In fact, those who plan at the last minute indicate the highest number of destinations considered. This suggests that once planning begins, people have basically either made their destination decision or are only considering limited options. This question was asked about their planning for a specific trip and doesn t address search or consideration earlier in the process. The implication from this is that Number of Destinations vs. Planning Time branding is critical California 2.7 needs to be at the top of the 2.3 2.2 2.1 2.0 2.0 consideration set prior to trip 2.0 planning or they will not be considered. Less than One to two one week weeks Two to three weeks Three to four weeks 1-2 months 3-4 months More than four months in advance www.smari.com 23
Consideration & Familiarity Another related point is that building familiarity among consumers is strongly linked to consideration and likelihood to visit. Those who indicate that they are unfamiliar with California also indicate that there is almost no likelihood that they will visit. And likelihood increases directly with familiarity. This supports the layered messaging and indicates that by Likelihood to Visit showing what the state has to 35.9% offer and building familiarity with the product the advertising has an impact on the destination 21.1% selection process. 11.4% 1.3% Not at all familiar Not very familiar Somewhat familiar Very Familiar www.smari.com 24
Technology Usage Questions were added to the survey to assess the usage of technology in gathering information while on a trip, as well as sharing info afterward. Laptop computers had the highest level of usage overall. Almost 6 in 10 visitors used a laptop to get information during their trip, and a third used a laptop to share information after the trip. Overall, 82% reported using one of these devices to get information during their trip. Among those who used only one, 50% used a laptop, 30% used a desktop and 16% used a smart phone. For sharing information after the trip, the desktop, laptop and Facebook are all popular. Twitter and Facebook are more likely to be used by younger visitors, while desktop users skew significantly older. Device Get info Share info Did Not Use Facebook 9% 27% 71% Twitter 1% 2% 98% Desktop 36% 28% 49% Laptop 59% 34% 30% Tablet 6% 3% 92% Smart phone 38% 19% 57% Device Avg. Age Desktop 53 Laptop 50 Tablet 50 Smart Phone 45 Facebook 41 Twitter 34 www.smari.com 25
Travel Specifics Family vacations are the most prevalent trip to California, followed by weekend getaways. Interestingly, the average length of trip is 5.4 nights much higher than the national average (less than 4 nights). The average trip party is 2.9 people, with about 55% of the trips including two people. The beach vacations and family vacations have both the largest travel parties, and longest trip length. The getaway trips (romantic and weekend) are the shortest and have the smallest parties. Type Percentage People Length Spending The trips that generate Family vacation 54% 3.1 6.2 $1,374 the highest spending are Romantic getaway 13% 2.4 4.6 $1,420 wine and food and beach Weekend getaway 24% 2.5 4.0 $1,016 trips. Girlfriend getaway 8% 2.8 5.3 $1,379 Men only trip 2% 2.3 5.6 $1,296 Beach vacation 5% 3.5 6.9 $1,615 Wine & food trip 9% 2.7 5.9 $1,616 Other 15% 3.3 6.8 $1,233 Average 2.9 5.4 $1,315 www.smari.com 26
Travel Specifics The survey explores what people do on their trips, as well as what motivated them to choose the destination. The most popular activities and also the key motivators were scenery and unique dining. Activities that are popular, but less likely to be motivators are shopping, scenic byways and visiting small towns/rural areas. Activity Participated Motivated Enjoying natural scenery 70% 34% Fine dining/unique restaurant 66% 20% Visiting theme /amusement park 26% 15% Going to the beach 38% 13% Unique feeling & attitude 36% 13% Driving on scenic byways or roads 46% 12% Visiting a winery 27% 11% National or state park 28% 9% Shopping 56% 9% Arts activities 29% 7% Sightseeing or take tours 24% 6% Hiking or camping 19% 6% Visiting small towns and rural areas 30% 5% Entertainment and nightlife 24% 5% Visit historical sites 23% 4% Activities for small children 11% 4% Watching sporting events 9% 3% Golf 7% 3% Spa 9% 2% Boating or other water activities 7% 2% Gambling 4% 2% Adventure activities 5% 1% www.smari.com 27
Repeat Travel Of key interest to California is repeat visitation. With high familiarity and an appealing brand, the state already has attracted strong visitation. In some nearby markets the level of travel is so high that it will be difficult to attract more households. But the state can increase travel through repeat visitation. Currently, about half of the outof-state visitors from the nearby states report more than one trip, and almost a quarter of those from farther away visited the state at least twice. California has the highest level of repeat visitation among the states measured but this is driven by residents. Outside of the state, New York garners the strongest repeat levels. Market # of trips % Reporting Multiple Trips Primary Feeder 1.9 46% Other West 2.1 51% California 3.0 76% National 1.5 23% Overall 2.2 49% State # of Trips # of Trips (without CA residents) California 2.2 1.6 New York 2.0 2.1 Texas 2.0 2.0 Washington 1.9 2.0 Florida 1.8 1.8 Oregon 1.8 1.9 Colorado 1.7 1.8 Nevada 1.7 1.5 Arizona 1.6 1.6 Utah 1.5 1.6 Hawaii 1.2 1.2 www.smari.com 28
Regional Travel Among the visitors to California, the majority visited the four urban regions of the state. The San Francisco Bay area had the highest level of visitation, followed by Los Angeles and San Diego. Only 13% visited only the rural regions, although 42% visited both the rural and urban areas. On average, visitors reported going to 2.6 regions, although when residents are not included the average is 2.1 regions. Regions with the lowest visitation were Shasta Cascade, Central Valley and Inland Empire. Urban vs. Rural Destinations Both, 42% Rural only, 13% Urban only, 44% Region Total San Francisco Bay 42% Los Angeles County 37% San Diego County 34% Central Coast 28% Orange County 28% Sacramento High Sierra 17% Desert Area 16% Gold Country 14% North Coast 12% Inland Empire 11% Central Valley 10% Shasta Cascade 7% www.smari.com 29
Regional Travel A review of visitation by visitor origin provides insight into variations relating to residents, nearby markets and the National market. The highest level of visitation to most of the rural markets is among California residents, although the Shasta Cascade region gets high visitation from nearby Western states. The key Western feeder markets which are major urban areas tend to prefer Southern California and urban areas, while the National audience is most likely to visit the gateway/urban regions. Region Western Feeder Other Western California National Total San Francisco Bay 31% 36% 51% 38% 42% Los Angeles County 35% 29% 37% 39% 37% San Diego County 37% 26% 37% 33% 34% Central Coast 17% 22% 45% 18% 28% Orange County 31% 24% 31% 25% 28% Sacramento High Sierra 6% 14% 26% 12% 17% Desert Area 19% 16% 24% 8% 16% Gold Country 7% 14% 22% 10% 14% North Coast 10% 13% 15% 9% 12% Inland Empire 11% 8% 18% 6% 11% Central Valley 7% 9% 17% 5% 10% Shasta Cascade 8% 13% 9% 4% 7% www.smari.com 30
Regional Travel As might be expected, the key motivators for those visiting rural areas differ somewhat from those visiting urban areas or those who visit both. At the same time, the differences are not as significant as might be expected. In part this may be because destinations in California offer urban and rural experiences in close proximity. For example, the cities have beautiful natural scenery, such as shorelines. And fine dining options are available in both urban and rural areas. Motivators Rural Urban Both Enjoying natural scenery 43% 32% 42% Fine dining /eating at a unique restaurant 18% 21% 20% Driving on scenic byways or roads 17% 12% 16% Visiting a winery 14% 12% 16% Going to the beach 12% 15% 15% Visiting a theme or amusement park 11% 17% 14% National or State Park 14% 9% 14% Shopping 10% 9% 11% Unique feeling & attitude of the area 11% 13% 10% Arts activities 8% 8% 9% Hiking or camping 8% 5% 7% Entertainment and nightlife 6% 5% 6% Visit historical sites 6% 5% 6% Sightseeing or take tours 5% 7% 6% Visiting small towns and rural areas 6% 5% 6% Activities for small children 4% 5% 4% Golf 4% 3% 3% Watching sporting events 3% 3% 3% Spa 2% 2% 2% Gambling 2% 1% 2% Adventure activities 2% 1% 2% Boating or other water activities 2% 2% 1% www.smari.com 31
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APPENDIX QUESTIONNAIRE www.smari.com 36
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