Thursday, January 28, 2010

Running the State Like a Business: Pure Michigan Advertising Edition

We've often heard that we need to run this state "like a business". Ignoring the vast differences between the goals of government vs. the goals of for-profit businesses, let's play along for a moment. Tell me, what smart business cans its advertising campaign, especially when that campaign has been a roaring success? Does that sound like a smart "business" move?

As you may or may not remember, the Pure Michigan campaign was drastically slashed in the Bishop-Dillon budget agreement, dropping from $30 million in funding back down to $5.4 million - and the winter ad buy was canceled. This came after reports in the summer showed that our tourism industry had some "surprising increases" that were attributed to the campaign, with many vacation areas and events reporting a surge in visitors, growing during the height of the "Great Recession". Yesterday, Comerica released the 4th quarter Michigan Tourism Index, and it showed another uptick in the formula that uses equally weighted data from lodging, entertainment and travel reports.

Comerica Bank’s Michigan Tourism Index jumped six points in the fourth quarter last year to a level of 94, which is the highest level since the second quarter of 2008.

The index averaged 90 last year and 92 in 2008.

The index took a dive in '08, starting with the high gas prices and continuing though the national crash in the economy that happened in the third and fourth quarter, but ever since then it has been slowly back on the rise. Without the boost in national advertising, would we have seen the relatively good results for tourism that we saw in '09? Chances are, no.

Another indication of the success of the campaign, for the third year in a row, was the No. 1 tourism website in the country.

The web page garnered more than 12.6 million hits in 2009, nearly a 8 percent increase over 2008. received more visits than any other state tourism Web site in 2009, according to Hitwise, an online measurement company.

"Our Pure Michigan marketing effort is driving a record number of potential visitors to," said George Zimmermann, vice president of Travel Michigan, a business unit of the Michigan Economic Development Corporation.

Michigan tourism is an $18 billion-a-year industry, employing 192,000 and generating $874 million in annual state tax revenues.

Web-based marketing has done very well, even generating a new spin-off site called "", which lists job openings and carries positive stories about people and businesses that have moved to Michigan. This looks to be a great recruiting tool, as long as we can get some TV behind it. The web goes a long way, but television is still the place to be for maximum exposure.

So here we are at the beginning of '10, and tourism based Michigan businesses are left in the lurch at this point, waiting for our legislature to get its act together and fund this campaign so they can make their advertising plans for the year. Many of them "piggyback" off of state advertising - and inaction is threatening the summer tourism season. Cable TV buys need lead time, and the longer we wait, the more expensive it will be.

The campaign promoting Michigan's travel destinations to a nationwide audience won't be able to make a summer advertising splash unless it gets substantially more money approved within the next few weeks, organizers say. Reduced advertising would be a significant blow to a Michigan tourism industry already struggling to weather the state's long-running economic slump.

"We need this resolved soon," said George Zimmermann of Travel Michigan, the agency that created and launched the Pure Michigan campaign. "We need to be on the air in March. And you've got to buy it before you're on the air, so we need a little bit of lead time to make the buys."

Local tourism officials said uncertainty over the state's funding issues is throwing a wrench into their seasonal advertising plans. Brad Van Dommelen, president of the Traverse City Convention & Visitors Bureau, said the local CVB "piggybacked" its advertising push in recent years with the state's Pure Michigan campaign in several Midwest markets.

The House passed a measure in December that, of course, went nowhere with the Senate, and Republican Jason Allen tells the Traverse City Record-Eagle that they are looking for "an equitable, bipartisan solution". Fine. But do it fast.

For all the talk of running the state "like a business", this is no way to run a business. Dropping a wildly successful campaign that is bringing people in the door shows a remarkable lack of business sense, and if that's the case, we should we trust them on any other "business" rhetoric they care to utter?