AUTHORIZATION TO ENTER INTO A LINKING AGREEMENT WITH ON ADVERTISING, INC., UNDER THE STATE OF ARIZONA COOPERATIVE PURCHASING AGREEMENT FOR MARKETING AND ADVERTISING SERVICES FOR THE PUBLIC FACILITIES, RECREATION AND SPECIAL EVENTS DEPARTMENT
Staff Contact: Erik Strunk, Director, Public Facilities, Recreation and Special Events
Purpose and Recommended Action
This is a request for City Council to authorize the City Manager to enter into a linking agreement with On Advertising, Inc., under the State of Arizona Cooperative Purchasing Agreement for Marketing and Advertising Services for the Public Facilities, Recreation and Special Events (PFRSE) Department in an amount not to exceed $300,000 annually. If approved, the term of the contract would be a period of one year, with the administrative option to annually renew it up to four additional years.
Background
In July 2016, the City was re-organized to create the new Public Facilities, Recreation and Special Events Department. As established, this City department consists of all Parks and Recreation programs and services; the Glendale Civic Center; the Office of Special Events; and the Glendale Convention & Visitors Bureau (CVB). In order to effectively market and promote programs and services offered by each of these divisions and to promote the City as a major destination for tourism, conventions, and visitors, the department is responsible for a variety of marketing and advertising initiatives on a local, national and international scale. These initiatives are primarily utilized to promote patronage at Glendale’s hotels and many fee-based facilities, programs and services such as the Civic Center, aquatics programs, the Glendale Adult Center, Special Interest Classes, etc. Examples these promotional and marketing initiatives would include the annual publication of Visit Glendale; ad purchases and articles about Glendale in a variety of national and international travel magazines such as Arizona Highways, Sports Destination Management, Arizona Business Magazine, El Imparcial (Sonora, Mexico), Travel Professional, etc.; local, quarterly publications such as Glendale @ Play, the use of radio, television, and social media to promote the City’s special events such as Glendale Glitters, Touch-a-Truck, the Chocolate Affaire, Glitter and Glow, and the Folk and Heritage Festival; social media and search engine optimization; and new efforts to increase business and patronage of the Glendale Civic Center.
Each of these respective divisions has been responsible for its own marketing and promotional efforts, which takes away from the core functions of certain employee, which is not an optimal use of their time. In an effort to better consolidate and coordinate these efforts, the new department worked with the Procurement Division to explore the potential outsourcing of these functions. As a result, it was recommended to enter into a linking agreement with On Advertising, Inc., to allow for a more enhanced, strategic marketing and advertising program, with an emphasis on metrics-driven results.
If approved, the department will better be able to coordinate interactive media and marketing strategies to increase tourism, participation and visibility of Glendale’s special events, recreation programs and services, and further establish the City as a regional, national and international destination.
Analysis
As previously mentioned, there are four divisions that will benefit from this agreement with On Advertising, Inc., if approved:
1. CVB. The Tourism Division, which was established in 1997 and renamed the Glendale Convention & Visitors Bureau (CVB) in 2010, is responsible for developing and implementing the city's tourism and visitor services programs to both in-state, out-of-state, and international visitors to Glendale and the West Valley. Through the CVB’s efforts, Glendale’s hoteliers generated approximately $47.26 million in gross hotel sales in calendar year 2016, which in turn generated additional revenue to the city in the form of the bed tax - approximately $1,004,903. In fact, the City’s current “Average Daily Rate” (ADR) earned by Glendale hotels in 2016 was $125.65 per night, which is also the highest ever.
In addition, the CVB serves over 115 West Valley businesses, and features Glendale in approximately 200 ads annually. The CVB, which has a staff of 2.5 FTEs and two temporary contractual workers, currently manages an integrated marketing and advertising program that focuses on three core initiatives in national, international and regional markets: meetings & conferences, travel & trade, and leisure visitors. The marketing program spans multiple platforms including print, online, out of home, television and interactive cutting-edge technologies such as digital ad targeting, retargeting and search engine marketing, with an emphasis on lead-driven placements to increase hotel occupancy in Glendale. Of the annual contract amount requested, approximately $200,000 will be supported by the CVB’s existing budget for marketing.
2. Glendale Civic Center. The Glendale Civic Center, a 40,000 square foot facility that books approximately 195 events and draws over 56,000 persons annually to the downtown/Centerline area, does not have a dedicated marketing budget. As a result, staff has traditionally relied on websites offering free online listings to generate leads and book business. Since the City re-organization, the CVB has partnered with the Civic Center utilizing several local trade publications to increase its exposure in the marketplace to visitors. Additionally, in FY 16-17 and as a part of the City’s agreement with the Tohono O’odham Nation, the CVB began receiving a $100,000 payment specifically for CVB-related marketing and tourism activities. Of this amount and as presented to the City Council at workshop in October 2016, $30,000 of this annual payment has been earmarked for Civic Center marketing and advertising. As a result, this new marketing bud will be used for the Civic Center with regard to advertising purchases, market research, and/or market analysis performed via the linking agreement with On Advertising, Inc.
3. Office of Special Events. Similar to the CVB and the Civic Center, the Office of Special Events relies on marketing and advertising to leverage its budget and to increase attendance at signature and community events. In FY16-17, an estimated 350,000 persons attended the six free signature events which spanned from November 2016 through February 2017. With a budget of $105,000 for marketing, Special Events received 4,946,810 audience views on marketing ads during the event season. The primary platform used by Special Events includes radio, newspaper, TV, internet advertising and social media engagement. A linking agreement with On Advertising, Inc., will better enable Special Events the opportunity to identify potential media partners and media purchases that will maximize the division’s marketing budget.
4. Parks and Recreation. Each year, the Parks and Recreation Division generates approximately $2,422,090 in revenue and continually seeks new ways to grow both revenue and patronage at its facilities. To accomplish this, the division markets its programs and community events via quarterly magazines, flyers, the Parks and Recreation webpage and social media. While this division’s marketing efforts are traditionally more grassroots and do not require as many media buys as the other divisions within the department, a linking agreement with On Advertising, Inc., will provide the opportunity for needed market research and analysis to evaluate current marketing and outreach initiatives. These efforts will compliment the City’s broader efforts to locally, nationally and internationally promote assets such as the Historic Sahuaro Ranch Park, the Thunderbird Conservation Park, and the Paseo-Racquet Center.
Utilizing the state of Arizona Purchasing Cooperative Marketing-Statewide Linking Agreement ensures that industry best practices, processes and procedures are applied and allows the city to make cost-effective purchases utilizing On Advertising, Inc., diverse set of industry skills, insight and purchasing power resulting in the most effective use of available funding.
Community Benefit/Public Involvement
Tourism is the largest export-industry in Arizona. According to the Arizona Office of Tourism, 42.1 million people visited Arizona in 2015 that collectively spent $21 billion. Additionally, recreation opportunities and special events attract visitors and improve residents’ quality of life through the collection of sales tax. All of these activities are impacted by the department’s ability to effectively market and advertise programs and events, and the results are tangible; effective marketing increases attendance at Glendale Signature Events, it promotes recreation programs and services, generates leads for and interest in the Civic Center, and increases hotel occupancy, gross hotel room sales and tourism spending in Glendale and the West Valley. Through enhanced marketing and advertising, a continued focus will be placed on business and leisure travel ranging from conferences, meetings groups and international and domestic visitors. In addition, a comprehensive promotional campaign is a critical step in attracting new residents, entrepreneurs and businesses to move to Glendale.
Additionally, the use of an outside vendor to provide coordinated and strategic marketing and media services will result in a more efficient use of staff time that will allow for the additional focus on generating more tourism, convention business, and facility use, which in turn will generate revenue to Glendale.
(See next page for Budget and Financial Impacts)
Budget and Financial Impacts
Approval of this agreement will not exceed $300,000 in total annual expenses, all of which is budgeted within the department.
|
Cost |
Fund-Department-Account |
|
$300,000 annually |
1000-14130-518200, Bed Tax/Tourism Professional Contractual - $95,000; 1000-14100-518200, City Sales Tax-Bed Tax Professional Contractual - $40,000; 1840-32108-518200, Maricopa County Proposition 302 Grant - $95,000; 1000-14109-518200, Special Events Professional Contractual - $40,000; 1000-14610-529600 Promotion and Publicity - $30,000. |
Capital Expense? No
Budgeted? Yes
Requesting Budget or Appropriation Transfer? Yes