2015 Global Economic Impact and ROI. April 2016

Transcription

1 2015 Global Economic Impact and ROI April 2016

2 Research Design An online survey was conducted in each country, with actual advertising shown to measure advertising recall. The travel behavior of those with advertising recall was compared to those with no recall to determine the level of incremental travel by market. The level of incremental travel was applied to the number of aware households by market to determine the number of incremental trips. Average trip expenditures were used to calculate the total incremental visitor spend. This was divided by the media expenditures to determine ROI. U.S. Domestic 3,022 surveys Geography: 602 in California, 1,000 in surrounding Western states and 1,420 in remaining U.S. Leisure traveler involved in travel decision making, household income over $50K UK 2,126 surveys Geography: 671 London, 1,455 remaining UK Travel decision maker and have taken trip to U.S. in past 2 years, or would consider trip to U.S. Canada 1,584 surveys Geography: 468 in Western Canada, 473 in Toronto, 643 in rest of Canada Travel decision maker and have taken trip to U.S. in past 2 years, or would consider trip to U.S. China 2,018 surveys Geography: 724 in Beijing, 723 in Shanghai, 571 in Guangzhou Travel decision maker, and have taken trip to U.S. in past 2 years, or would consider trip to U.S. 2

3 VCA is in the midst of implementing the Dream Big initiative, with a major increase in marketing dollars, and this was reflected in spending during During 2015, VCA began to ramp up expenditures in the US and China, while maintaining expenditures in Canada and the UK. Spring and fall flights were used in the US and Canada, with single flights in the UK and China. The strategy across markets was to use television to establish the branding and to augment with a much stronger digital campaign, extending longer than the television effort. The Dream365 YouTube Channel was utilized to promote content. In addition to a strong brand television effort, the family-focused initiative continued with Kids at Play. Both television spots (Dreamers and Kids) were updated for the fall advertising flights in the US and Canada. Specific content initiatives were utilized in 2015, including the new Dream Eater series and a continuation of the Always in Season program. Domestic $21.5 million TV, Digital, 365TV YouTube channel Content: Dream Eater & Always in Season Food & Wine initiative Canada $1.9 million TV, Digital, YouTube UK $3.2 million TV, Digital, YouTube, Outdoor China $3.6 million TV, Digital 2015 Media Summary by Country 3

4 DREAM BIG 4

5 Marketing Overview Reach & Impact 5

6 All markets saw gains in awareness. Domestic and China saw the biggest increases with corresponding increases in spending. Ad Recall by Year 75% 70% 69% 73% 67% 68% 81% 85% Domestic Canada UK China

7 Increased usage of digital has driven up recall of that media and helped extend the overall reach of the campaign in each country. In the past, television has generated most of the recall for VCA, with digital providing support. But the expansion of the digital efforts has led to an overall increase in ad recall, as well as a significant number of households that have only seen the digital ads. In China, digital is even more important and drives overall recall. Recall TV & Digital 85% 75% 73% 68% 56% 59% 61% 64% 58% 35% 37% 25% Domestic Canada UK China TV Digital Total 7

8 Media overlap was strong across all markets, especially China, where the brand campaign was complemented with a co-op buy. With a media strategy that utilized a significant television presence, increased digital, Dream 365 TV, as well as partnerships and other content initiatives, there was significant overlap in media recall. Level of Media Overlap China 27% 5% 6% 62% UK 37% 35% 11% 17% Canada 35% 34% 13% 19% Domestic 37% 32% 13% 17% No Ad Recall One Two Three+ 8

9 Overlap is important because travel to California was higher among people with recall of multiple media. For most markets the level of travel continued to rise with exposure to different types of media. In the US, the trend leveled off after three media. The layered media strategy and more usage of digital, other media and content have a positive impact on travel to California. Level of Travel by # of Media Recalled 34.8% 26.6% 28.2% 30.4% 18.8% 15.7% 13.6% 11.5% 12.1% 12% 10% 9.9% 6.6% 6% 5.4% 5% No ads One medium Two media Three + Domestic Canada UK China 9

10 Return on Investment 10

11 2015 ROI Summary The 2015 media buy in the ROI markets increased more than 40% over the previous year, with most of the increase allocated to the domestic market. This returned more than $10 billion to California in visitor spending, for an ROI of $330 for every dollar Visit California invested in media. The tax rate was slightly lower at 6.4%, resulting in $21 returned to the state s General Fund for every dollar spent on paid media Impact & ROI Domestic Canada UK China Total Trips 4,299, ,665 97, ,802 4,715,510 Average Expenditures $2,090 $2,411 $3,797 $3,688 $2,184 Visitor Spending $9 billion $484 million $371 million $457 million $10.3 billion Tax Revenue $575 million $31 million $24 million $29 million $659 million Campaign Expenditures $21.5 million $1.9 million $3,242,118 $4,647,318 $31.3 million ROI $418 $254 $114 $98 $330 General Fund ROI $27 $16 $7 $6 $21 11

12 2015 Domestic Marketing & ROI 12

13 Domestic Historical ROI Domestically, the number of impacted trips increased and generated $2 billion more in visitor spending than in But with $8 million more in media expenditures, the ROI fell slightly. Domestic % Change Trips 3,543,427 3,586,621 3,818,640 3,955,920 3,737,816 4,299,735 15% Average Expenditures $1,569 $1,675 $1,726 $1,790 $1,877 $2,090 11% Visitor Spending $5.6 billion $6.0 billion $6.6 billion $7.1 billion $7.0 billion $9 billion 29% Tax Revenue $354.6 million $348.3 million $454 million $488 million $484 million $575 million 19% Campaign Expenditures $16.2 million $18.3 million $14 million $16.4 million $13.5 million $21.5 million 59% ROI $343 $328 $472 $431 $521 $418-20% General Fund ROI $22 $23 $33 $30 $36 $27-25% 13

14 The flights of TV prompt high recall, supported by digital. Digital seems to have less ability to generate long-term recall. At the end of the year, 45% of overall consumers reported recall of multiple media/campaigns. At the same time, there are now significant groups of people exposed to only television or only digital. This will allow more analysis of the impact of each medium. For the first time, during the August wave there were more people who only recalled the digital campaign than recalled television. But with the fall television wave, and the postponement of some of the digital efforts, this reversed by the end of the year. The key takeaway is the ability of the digital to maintain high levels of VCA ad awareness between television flights. It is also critical to consider how the different media impact travel to the state. Type of Recall 41% 41% 37% 32% 27% 22% 45% 44% 11% May August ROI Television Only Digital Only Both 14

15 In the national domestic market, TV has the strongest impact on visitation, supported by digital. Outside of California and nearby markets, brand is critical, and television delivers the brand message that puts California into the consideration set. A review of visitation based on the type of recall shows that digital alone doesn t have a strong impact on visitation probably in part because it can t deliver the same depth of message. But those aware of only TV or both TV and digital show a higher rate of travel. Travel by Media Recall 15% 15% 12% 13% None TV only Digital only Both 15

16 In the nearby markets and in-state, television alone doesn t increase travel. In these markets, where familiarity is high, the added layer of digital advertising provides new information to add to existing brand perceptions. While television is critical in the national market, this is not necessarily the case in the nearby and more established markets. In these markets, those who saw only television did not travel at a higher rate than those with no recall it took digital or a mix of TV and digital to generate incremental travel. While the level of travel is highest among those who only saw the digital ads this is a smaller group. In the nearby markets, the combination of TV and digital has wide reach and strong impact. Travel to California by Type of Media Recall 61.5% 60.9% 55.6% 48.2% 43.3% 37.9% 36.9% 37.7% 12.3% 12.5% 15.1% 15.4% No recall Digital only TV only TV & Digital National Market Western In-state 16

17 Culinary Awareness & Influence 17

18 Those aware of the culinary campaigns have a higher rate of travel than those with other recall. Visit California placed two specific culinary campaigns in the domestic market. Overall, 20% of households were aware of either Dream Eater or Always in Season. Those aware of these campaigns had a higher rate of visitation than those aware of other components of the Visit California marketing. Domestic Awareness of Culinary Media Domestic Travel by Culinary Awareness 17% 20% 31% 37% 42% 41% 36% 9% Dream Eater Always in Season Any Culinary Aware Unaware Dream Eater Aware Always in Season Aware Any Culinary Aware Any Awareness 18

19 Awareness of VCA media improves the image of and visitation to culinary activities. There is an improved image of the state s culinary product when there is any recall of Visit California media. The association of these products is further improved when exposed to culinary-specific marketing. In addition, those aware with recall include culinary-based activities in their California trips. Domestic Influence of Culinary Marketing No Recall Any VCA Recall Culinary Recall Influence Wineries Fine dining Local cuisine Farmers markets Breweries Farm tours California-grown crops Culinary Trip activities No Recall Any Culinary Recall Recall Visiting a winery or wine regions 17% 24% 27% Visiting a microbrewery 7% 11% 12% Exploring farm tours or farm trails 2% 2% 3% Going to a farmers market 16% 17% 20% Attending a culinary festival or event 3% 4% 8% Dining at a unique local restaurant(s) 44% 47% 47% Dining at a celebrity/notable chef's restaurant 7% 8% 12% 19

20 2015 Canadian Marketing & ROI 20

21 Canada Historical ROI The Canadian economy struggled in 2015, teetering on the verge of recession until mid-year. Combined with a weak Canadian dollar, the result, as explored, was both less overall travel and fewer incremental trips Since media spending in Canada increased 15%, the net result was a decrease in the ROI and General Fund ROI. Canada % Change Trips 83, , , , ,665-24% Average Expenditures $1,836 $1,998 $1,883 $2,298 $2,411 5% Visitor Spending $153 million $252 million $435 million $609 million $484 million -21% Tax Revenue $9 million $17.4 million $30 million $42 million $31 million -26% Media Expenditures $1,768,157 $1,242,314 $1,162,844 $1,649,936 $1,903,793 15% ROI $86 $143 $374 $369 $254-31% General Fund ROI $5 $14 $26 $25 $16-35% 21

22 TV builds the brand while digital gives specific reasons to visit. The two combined generate the most influenced trips. Not only did awareness grow, but there also was more media overlap. As has been seen previously, TV fulfills the role of building the brand, while digital provides specific reasons to visit and closes the deal. Those that recall TV alone did not generate incremental travel. But when combined with digital, there is good influence. Media Overlap Travel by Media Recall % 39% % 37% % 22% 12% 10% 20% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% One Two or more None TV Only Digital Only Both 22

23 2015 UK Marketing & ROI 23

24 UK Historical ROI The UK weathered the global economic slowdown of 2015 well, with a modest increase in growth. With this, there was an increase in travel to California and incremental travel. With slightly less media spending, this was the only market to see a significant increase in ROI. UK % Change Trips 61,723 50,122 66,484 85,713 97,610 14% Average Expenditures $2,977 $2,534 $3,103 $3,887 $3,797-2% Visitor Spending $184 million $127 million $206 million $333 million $371 million 11% Tax Revenue $11.7 million $8.1 million $13.2 million $23 million $24 million 3% Media Expenditures $3,609,000 $3,600,000 $3,400,000 $3,335,557 $3,242,118-3% ROI $51 $35 $61 $100 $114 14% General Fund ROI $3 $2 $4 $7 $7 0% 24

25 Out-of-home unique to the UK market adds to the overlap opportunities, generating additional travel. As in other markets, recall of just the TV does not generate additional visitation. However, TV recall drives awareness, so there are few households aware of only digital or outdoor. But when TV is combined with these other media, California travel is significantly impacted. Media Overlap Travel by Media Recall % 14% 20% 14% % 20% 22% 11% % 23% 19% 7% 5% % 10% 2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% One Two Three None TV Only Digital or TV & Digital or Outdoor Only Outdoor 25

26 2015 China Marketing & ROI 26

27 China Historical ROI While China continued to report strong economic growth, a devaluation of the country s currency in 2015 suggested otherwise. Even so, there were slight increases in influenced trips and visitor spending. But with media expenditures up a third, the ROI was relatively unchanged. China % Change Trips 109, ,802 13% Average Expenditures $3,050 $3,688 21% Visitor Spending $334 million $457 million 37% Tax Revenue $23 million $29 million 27% Media Expenditures $3,500,331 $4,647,318 33% ROI $95 $98 3% General Fund ROI $7 $6-10% 27

28 There is significant overlap given the multiple forms of media placed in the China market. Visit California placed brand TV and digital, but the co-op marketing program with Brand USA also included out-of-home and print. The inclusion of these other media contributes to significant media overlap, with nearly two-thirds of the market recalling both TV and another form of Visit California media. This overlap is what contributes to incremental travel for the market, given those aware of only TV or the other components of the campaign had less travel to California than those with no recall. Media Overlap Travel by Media Recall 13% % 18% 64% 10% 5% % 17% 55% 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% TV Only Digital/OOH/Print Only TV & Other None TV Only Digital/OOH/Print Only TV & Other 28

29 Trip Characteristics 29

30 Visitors are using a variety of lodging sources. While most California visitors are using a hotel at some point during their trip, many are splitting their stay through a variety of lodging types. Given visitors from the UK stay the longest, it is not surprising that they have higher usage of homeshare sources such as Airbnb, HomeAway, etc. But with nearly a third of Chinese visitors saying they used this source, as well as 89% saying they used a bed and breakfast, it appears this doesn t translate well and was confusing to respondents. 100% 80% 60% 40% 20% 0% Number of Lodging Types 6% 8% 15% 23% 15% 16% 71% 77% 69% 27% 20% 53% Domestic Canada UK China One Two Three or more Type of Lodging Domestic Canada UK China Hotel/Bed and Breakfast 78% 83% 89% 93% Friends & Family 34% 22% 26% 13% Homeshare 10% 9% 20% 30% Other Lodging 8% 8% 14% 18% 30

31 Although international visitors fly, there is significant usage of other transportation, especially rental cars. Visit California has been able to make tremendous inroads with building its budget and marketing through dedicated funding sources. While funding comes from a variety of sources, rental car charges make up more than half of the $100 million marketing budget based on the passage of the Dream Big Dividend. Because of this, usage of rental cars is especially important for Visit California to maintain funding levels. Primary Transportation Domestic Canada UK China Airplane 39% 65% 59% 84% Personal car/truck 46% 13% 4% 0% Rental car 11% 12% 22% 7% Uber/Lyft/other shared service 1% 2% 5% 0% Taxi 0% 2% 4% 4% Train above ground 0% 2% 2% 1% Public bus 0% 1% 1% 1% Boat/ship 0% 1% 0% 0% Limousine/private car 1% 0% 1% 1% Private bus/tour bus 0% 0% 0% 2% Total transportation used Getting to CA and during trip Domestic Canada UK China Airplane 55% 79% 84% 92% Personal car/truck 57% 19% 25% 23% Rental car 40% 55% 69% 35% Uber/Lyft/other shared service 14% 11% 25% 13% Taxi 7% 29% 48% 51% Train above ground 6% 8% 30% 23% Public bus 6% 13% 36% 35% Boat/ship 6% 8% 16% 23% Limousine/private car 4% 3% 8% 10% Private bus/tour bus 5% 11% 17% 30% 31

32 All regions are being visited by ad aware visitors. While San Francisco and Los Angeles receive the most visitation across all markets, other regions are more often visited by various markets:» San Diego and Orange County have significant visitation from the Domestic market.» Visitors from the UK are more often in the eastern part of the state than other visitors. This is likely a function of their trip length. They are spending significantly longer on their trips and can see far more of the state than visitors from other markets.» Chinese visitors are more like to spend time in the Central Coast and Central Valley. Ad Aware Visitors Domestic Canada UK China San Francisco Bay 38% 38% 40% 48% Los Angeles County 35% 58% 50% 42% San Diego 31% 21% 19% 24% Orange County 23% 11% 15% 8% Central Coast 18% 16% 27% 36% Central Valley 14% 15% 29% 33% Desert Area 10% 11% 17% 8% High Sierra 10% 3% 12% 14% Inland Empire 8% 3% 5% 14% Gold Country 7% 2% 15% 15% North Coast 6% 4% 7% 18% Shasta Cascade 6% 4% 11% 13% 32

33 San Francisco and Los Angeles see similar levels of overall travel, given the level of regional visitation. International trips, especially those from the UK, are longer than Domestic trips, so these visitors are able to see more of the state in a single trip. Domestic trips certainly dominate visitation, but international visitors make up more than a quarter of visitors to Los Angeles County, Central Valley, North Coast and Shasta Cascade. San Francisco Bay Los Angeles County San Diego Orange County Central Coast Central Valley Desert Area High Sierra Inland Empire Gold Country North Coast Shasta Cascade Domestic 1,615,297 1,493,182 1,332,613 1,000, , , , , , , , ,134 Canada 75, ,348 42,734 22,390 32,353 30,975 22,447 6,117 6,782 4,514 8,325 8,991 UK 38,724 49,126 18,830 14,295 26,514 28,433 16,323 11,310 5,013 14,882 6,454 11,201 China 59,091 51,462 29,619 9,989 44,214 40,427 10,365 17,039 17,139 18,153 22,060 16,678 Total 1,788,972 1,711,118 1,423,796 1,047, , , , , , , , ,003 % Domestic 90% 87% 94% 96% 88% 86% 90% 93% 92% 89% 88% 88% % International 10% 13% 6% 4% 12% 14% 10% 7% 8% 11% 12% 12% 33

34 The total incremental spend can also be allocated by region The VCA advertising generates trips to all regions and the spending this represents ranges from a high of $2.3 billion in the San Francisco Bay region to $189 million in Gold Country. Domestic 1,138 cases Canada cases UK cases China-222 cases Overall Regional Incremental Regional Incremental Regional Incremental Regional Incremental Regional Distribution Spending Distribution Spending Distribution Spending Distribution Spending Distribution Total Region % $ % $ % $ % $ % Central Coast 8.00% $719,814, % $23,222, % $32,022, % $64,423, % $839,482,599 Desert Area 4.50% $404,390, % $28,157, % $31,799, % $9,496, % $473,843,970 Inland Empire 3.30% $292,059, % $3,580, % $926, % $9,816, % $306,382,716 North Coast 2.70% $238,140, % $4,838, % $4,744, % $45,155, % $292,878,796 High Sierra 4.10% $369,342, % $4,354, % $19,457, % $25,751, % $418,906,200 San Francisco Bay 23.40% $2,101,031, % $107,355, % $80,017, % $90,814, % $2,379,219,155 Central Valley 5.50% $495,153, % $35,994, % $45,401, % $68,806, % $645,356,606 Gold Country 1.60% $145,580, % $4,886, % $14,676, % $24,472, % $189,616,381 Los Angeles County 17.60% $1,578,019, % $197,391, % $95,843, % $53,922, % $1,925,177,673 Orange County 10.90% $976,826, % $21,771, % $10,155, % $10,592, % $1,019,345,673 San Diego 16.60% $1,492,648, % $45,332, % $21,273, % $41,001, % $1,600,256,004 Shasta Cascade 1.90% $173,438, % $7,015, % $14,269, % $12,327, % $207,050,336 Total $8,986,446,150 $483,900,076 $370,588,107 $456,581, % 10,297,516,109 34

35 The incremental spending can also be considered by spending category Incremental & Repeat Lodging/Accommod Meals/Food/Groceries ations Attractions Shopping Entertainment In-state Travel Other Total US $3,603,177,930 $1,745,692,410 $1,130,830,305 $1,019,037,195 $322,480,125 $627,761,310 $537,466,875 $8,986,446,150 Canada $165,069,335 $76,058,840 $62,329,152 $83,638,693 $31,352,376 $40,138,447 $25,216,472 $483,803,315 UK $125,526,330 $50,925,278 $44,290,472 $58,074,806 $30,068,378 $35,321,452 $26,418,454 $370,625,170 China $78,795,724 $49,831,868 $40,013,920 $155,547,169 $31,079,487 $71,412,822 $29,900,785 $456,581,776 Total $3,972,569,319 $1,922,508,395 $1,277,463,850 $1,316,297,863 $414,980,366 $774,634,032 $619,002,586 $10,297,456,411 % of Total Incremental Spending Generated 39% 19% 12% 13% 4% 8% 6% 35