At the conclusion of this study we were asked to comment on the probable return on advertising investment that the State of Michigan might expect assuming that Travel Michigan’s funding were increased to the following funding levels:
- $20 million
- $30 million
- $40 million
- $50 million
In order to do this we make the assumption that Travel Michigan will be able to maintain its current level of performance in terms of the success of its 2005 advertising campaign. To be specific, we assume that as the advertising budgets are increased Travel Michigan will be able to generate short term travel to the state at the rate of .26 trips for every media dollar spent. We believe this to be a conservative and achievable assumption in that:
- The 2005 campaign had a significant focus in Chicago, a media market that is exceedingly competitive. It is assumed that enhanced campaigns would be somewhat more broadly focused. And should be able to generate even stronger results in terms of trips per dollar of media investment.
- Longwoods’ International has norms data accumulated from numerous tourism advertising campaign evaluations that suggest that even stronger results than Michigan achieved in 2005 would possible in a more broadly based advertising campaign.
Based, therefore, on .26 trips for every media dollar spent and on data provided by Travel Michigan with regard to average visitor spending in Michigan and the relationship between visitor spending and state taxes, we project the following impacts from increased tourism funding:
