Co-op Strategy and RestructureMay 19, 2008

CA Travel & Tourism Commission

Co-op Strategy & Restructure

• History– Heavy reliance on contractors to create, promote and implement

programs due to limited CTTC funding– Programs tended to operate in a silo– Programs could be more effective if in line with CA brand strategies

• Research– Surveys: Fun Spots/Treasure Hunt, DMO, CMG and Wine & Food– Anecdotal feedback from Rurals, CWC’s, Marketing Reps and Sunset

• Environmental shifts– Budgetary factors

• Increase in funding• Increased opportunity due to funding

Co-op Hierarchy

Co-op Structure

Definition

Examples

Policy Programming Policy Programming

Financial commitment ($500K/yr,) brand

alignment and development, supported by

research findings

Quantitative in nature; must be state-wide; long-

range (multi-year;) can extend into marketing

partnership (e.g. LOWAF)

Contribution ratio 3:1 (industry:CTTC); statewide; turnkey operation; proven track record; aligns with

current brand pillars/ initiatives

Integrated communication platform, tiered offerings; has a combo of breadth of

participation and high satisfaction; domestic & international offerings

Measurements

Partner Opportunities

Criteria

Apple, Levi's International (J apan)

SMARI Advertising Effectiveness & ROI studies; tracking analytics of alliance organization(s); SMARI Attitudinal &

Awareness research; earned media coverage

Partners satisfaction; specific campaign measures (web traffic, leads, media equivalency)

Strategic Alliances Marketing Partnerships

A cooperative relationship entered into for mutual benefit between the CTTC and another organization(s) and which directly supports CTTC’s mission and strategic

marketing plan

A cooperative marketing relationship between the CTTC and designated contractors who create, manage and sell

marketing programs that supports CTTC Brand Advertising pillars and initiatives and/or supports the state’s hospitality and tourism industry’s needs and

objectives

CALIFORNIA TRAVEL & TOURISM CO-OP RESTRUCTURE

Southwest Airlines, CA Wine Institute, Snow Resort Coalition

CMG, Culture, Drives Guide, Fun Spots/Attractions. Golf, Park Visitor, Shop, Wine & Food

Criteria #1: Financial Commitment

Strategic Alliance programs must be funded by a minimum cash contribution of $500,000 a year* (or in-kind media equivalent^) for a minimum of three years

*Current programs will be grandfathered in and subject to criteria after the end of the current contract^ In-kind media will be evaluated by the ad/co-op committee and may be higher than $500K/yr

Criteria #2: Brand Development

Strategic Alliance programs must extend the California brand, reinforcing the “California Attitude” and expanding reach and influence among leisure travelers

Criteria #3: Research-driven

Strategic Alliance programs must be supported by research findings that demonstrate a designated area of need and/or opportunity for CTTC

Criteria #4: Scope

Strategic Alliance programs must be statewide, providing broad promotional coverageStrategic Alliance programs must be long-range (multi-year)

Strategic Alliance Criteria

Mktg Partnerships - Criteria

Criteria #1: Program Contribution

Must be funded by a 3:1 industry to CTTC contribution*Turnkey operation – all sales, promotion and implementation is primarily the responsibility of the contractorProven track record of success of no less than two years* Non-assessed industries currently receive no funding from the CTTC. All funding requests will be evaluated for approval by the ad/co-op committee

Criteria #2: Brand Alignment

Programs must align with current brand pillars/initiatives and/or support specific assessed tourism industry segments not already supported by CTTCPrograms must meet industry objectives, expanding reach and influence among leisure travelers domestically and/or internationally

Criteria #3: Integrated Communications

Programs must be multimedia (to include print, online, travel trade, PR, direct mail, etc.)Messaging should reflect the CA brand

Criteria #4: Scope

Must be statewideMust have tiered offerings so that it is viable for all levels of participationPartnerships can include DMO’s assessed and non-assessed businesses

Co-op Restructure Process

• Exploratory• Screening– Does it meet all criteria?– Does CTTC have appropriate resources to implement

(time/staff/budget)?

• Vetting – Marketing Committee level• Approval – Commission level• Implementation• Evaluation

APPENDIX

Strategic Alliance Example

Southwest Airlines

Criteria #1: Financial Commitment

Program is based on a 50/50 match; since inception (2005) Southwest Airlines has contributed $1.89M

Criteria #2: Brand Development

Extends California’s brand cachet through an unprecedented association with one of America’s leading travel providers

Criteria #3: Research-driven

Opportunistic alliance that provides additional support in California’s key primary domestic and national opportunity markets

Criteria #4: Scope

The initiative supports key destinations throughout the state with a strong, retail message

Strategic Alliance Example: Southwest Airlines

Southwest Airlines

• Program Objectives– Promote California as a dynamic travel destination– Extend the reach of California’s brand advertising– Stimulate incremental travel to California using Southwest

Airlines

• Program Metrics– Spot aired in Chicago, Dallas, San Antonio, Houston,

Denver and Phoenix promoting discounted fares– In Mar, passengers increased by 50K (up 11.1% YOY)

• The biggest gains were seen in OAK & SJO where traffic increased 10.1% and 11.9% respectively

– Campaign helped to launch a new city (SFO) and new non-stop city pairs from Denver to CA

Southwest Airlines

• Program Components– TV• :20 California + :10 Southwest Airlines tag

• Apple– The Apple brand is about imagination, design and

innovation, and like California is an archetypal emotional brand

• Levi’s – The Levi’s brand embodies freedom and

individuality; young at heart, strong and adaptable they are a symbol of independence, social change and fun, qualities right in line with the California brand

Strategic Alliances:Potential Non-endemic Targets

Marketing Partnership Example

CMG – Inside Scoop

Inside Scoop (CMG)

Criteria #1: Program Contribution

The 2007 Fall Insert was one of the most successful programs implemented by CMG for CTTC with a 5:1 industry to CTTC contribution (Industry $600K/20pg; CTTC $120K/4pgs)

Criteria #2: Brand Alignment

The initiative is modeled around the Inside Scoop brand messaging pillar. A template was designed to create a cohesive look and feel. The final product unified a mix of advertorial and display ads

Criteria #3: Integrated Communications

The program includes print, online exposure and direct mail to qualified American Express members

Criteria #4: Scope

2007 participants included a mix of DMO’s, attractions, restaurants, hotels, shops and golf courses from across the state

• Program Objectives– Target: upscale consumer travelers in the Western US– Content reflects California’s abundance

• Written from an insiders perspective• Vacation ideas designed to inspire travelers familiar with CA

• Program Metrics – Total Partners: 40 (vs. 23 in 2006)– Total pages: 24 (vs. 16 in 2006)– Results from American Express mailer due Sept ’08– CMG Online survey results

• Positive overall; interest in continuation of the program• Online mentioned as more efficient, measureable

Inside Scoop (CMG)

Inside Scoop (CMG)

• Program Components– Print (total circ: 850,000)

• National Geographic Traveler

• Travel & Leisure• Food & Wine

– Direct Mail (dist: 50,000)• American Express

– Online • visitcalifornia.com• sogonow.com

Marketing Partnerships: Potential Programming

• Expansion opportunities– Extend current programs• Additional insertions/events for shoulder or off-peak

seasons

– Opportunities in niche markets• Families, ethnic, gay travel

– International • Integrated opportunities within current offerings

– Example: Japan Trade Mission

For More Information:

Antonette EckertAdvertising & Co-op Marketing Manager916.319.5405 aeckert@visitcalifornia.com Tammy HaugheyMering Carson750.754.0800 x2thaughey@meringcarson.com