Rosy Study of Tourism Campaign Expected

Gov. Susana Martinez wants to double the advertising budget of the state Tourism Department to $5 million so it can expand its “New Mexico True” ad campaign to additional cities.

To help justify the increase, the Tourism Department points to a study on a $1.2 million New Mexico True ad campaign last spring and summer in six metro areas in neighboring states.

The study by Longwoods International, a tourism research firm, found that the campaign caused 264,000 adults to visit New Mexico and spend $35.1 million while they were here.

The methodology at the heart of the study is secret, but more on that later.

“The results of this research demonstrate that our new campaign has been very effective in motivating people to visit our state,” Tourism Secretary Monique Jacobson said in releasing the study in December. “Our investment is paying off – every visit results in jobs, tax revenue and a strong economy for New Mexico.”

It’s hard to believe the results of the Longwoods study were a surprise to Jacobson.

Longwoods studies generally paint rosy pictures of tourism ad campaigns, and it is something of a go-to company for government tourism officials seeking to justify or increase their spending on advertising.

The Tourism Department said it paid Longwoods $60,000 for the study, part of a $119,500 contract with the company. Longwoods also provides the state with data from its annual survey of travelers nationwide.

If the study is correct, the additional visitor spending caused by the New Mexico True ad campaign generated $3.6 million in state and local taxes. That’s a 3-to-1 return on investment for the $1.2 million campaign, according to Longwoods, which calculates return based solely on taxes generated and not the broader economic impact of tourism advertising, including such things as jobs created by the spending of additional visitors.

“In our experience, advertising works,” said Tom Curtis, senior vice president of Longwoods, which is based in Toronto but has offices in the United States. “Good advertising works every time.”

He said Longwoods has on occasion found some tourism ad campaigns not to be very effective. “We have been fired more than once,” Curtis said.

Because Longwoods is in the business of tourism research, more money spent on tourism advertising means more money spent on studies by Longwoods and others to evaluate it.

As for that being a potential conflict of interest, Curtis said, “We like to take some pride in being ethical.”

The Tourism Department could have hired market researchers outside the tourism industry to conduct the study.

James Petrick, a professor in the department of recreation, parks and tourism sciences at Texas A&M University, described Longwoods as a credible company that produces prudent studies.

For the study on the New Mexico True campaign, Longwoods conducted an online survey of 1,384 adults in six so-called drive market areas: Lubbock, Amarillo, Midland/Odessa and El Paso in Texas, Tucson in Arizona and Colorado Springs/Pueblo in Colorado.

First, Longwoods weeded out respondents who hadn’t taken day trips or overnight vacation trips in the past three years and those who didn’t plan to take trips in the next two years.

It asked the remaining respondents whether they had made recent leisure trips to New Mexico or planned trips in the next 12 months.

Longwoods then showed the respondents New Mexico True ads that appeared in print and on the Internet, billboards and TV and asked whether they recalled seeing the ads.

The company used its secret “R.O.EYE” method to analyze the answers and determine that 140,000 adults made overnight trips to New Mexico as a result of the ad campaign and another 120,000 made day trips. The total of 260,000 visitors represents more than 10 percent of the adult population of the drive market areas.

AnnDee Johnson, vice president of Longwoods, said the company came up with the trip numbers by essentially comparing the respondents who didn’t see the New Mexico True ads and visited the state to those respondents who saw the ads and visited.

“Our methodology is proprietary,” Johnson said. “So I can’t tell you how it really works.”

To come up with the number of $35.1 million spent by the tourists who came here because of the New Mexico True ad campaign, Longwoods figured an overnight visitor spent an average of just over $184 and a day tripper nearly $62.

Slightly more than 10 percent of the $35.1 million, or $3.6 million, went to state and local taxes, generating the 3-to-1 return on investment in the $1.2 million campaign, the study said.

It is tricky to compare returns on investment of tourism ad campaigns, because campaigns differ in duration, cost and other factors. But Longwoods studies from 2004 to 2008 of ad campaigns in seven other states found returns on investment ranging from 3.5-to-1 to nearly 15-to-1, according to a University of Minnesota study.

Here’s another way to look at New Mexico’s return on investment.

According to Longwoods’ annual survey of adults nationwide, 31.2 million people visited New Mexico in 2011 and spent $5.5 billion.

If those numbers are correct, as well, then the New Mexico True ad campaign increased our number of tourists and what they spent here by less than 1 percent.

To try to significantly increase tourism, New Mexico would have to spend a lot more on advertising – and a lot more on Longwoods to evaluate it.

UpFront is a daily front-page news and opinion column. Comment directly to Thom Cole at tcole@abqjournal.com or 505-992-6280 in Santa Fe. Go to www.abqjournal.com/letters/new to submit a letter to the editor.
— This article appeared on page A1 of the Albuquerque Journal