DMOs are not Ad Agencies
If Destination Marketing Organizations were advertising agencies, what the Mayor and City Council of Duluth MN recently did would have made perfect sense. Don’t like the creative? Go to RFP and find a new agency. Happens all the time.
Except, DMOs are not ad agencies…and to replace a DMO with an agency (which happened this summer in Duluth) is akin to replacing an accomplished heart surgeon with a first year resident. Would you be willing to take that risk? Apparently, the City of Duluth is.
There are a number of lessons learned here with which anyone leading a DMO should familiarize themselves:
They still don’t understand what we do. Destinations International’s Jack Johnson has been using this example for the past few years as he speaks to audiences around the country (as he did last month at the Upper Midwest CVB Fall Conference). He notes that many of us joke that our families don’t even know what we do for a living. And then says, “that’s not funny.” Because, if our families don’t understand what DMOs do, how the hell do we expect those who are elected to lead our communities to understand?
And, that’s what happened in Duluth. Sort of. We’ll probably never know for sure…but my money is on the Mayor actually knowing what Visit Duluth is and does. But, she’s also smart enough to know that Joe and Jill Public don’t…and she could move on the agency with a minimum of pushback. And, when the Visitor Economy stumbles without a DMO, there will be few that point a finger at her.
Never mind that Duluth has had the most pronounced hotel comeback in Minnesota in the COVID era, running the highest hotel occupancy and average daily rate in the State. And, never mind that event planners that had booked future events with the Visit Duluth team are likely now having second thoughts because there may not be a fully functional DMO services team ready to assist when they arrive. That means nothing to Joe and Jill Public when the Mayor claims that the community's summer success was the result of pent up consumer demand, deftly sidestepping the role Visit Duluth played.
The imperative of the Community Shared Value proposition has never been greater. You can hear more from Jack and the Destinations International Team at the Advocacy Summit later this month.
Some ad agencies perpetuate the notion that DMOs are ad agencies. There’s a great line in the classic Newman-Redford film Butch Cassidy and the Sundance Kid where Butch suggests that if the owner of the train his gang keeps robbing would just pay him, he’d quit robbing him.
Well, here’s a novel thought. If ad agencies would quit responding to RFPs for DMO services, maybe Cities would quit sending them out. Hey…I understand it’s been rough out there for a lot of agencies and some are grasping at straws. And, maybe some didn't read the RFP as well as they should have. But when over 25 ad agencies respond to an RFP to replace an incumbent, full-service DMO (something they are utterly unprepared to do), somebody’s got some explaining to do.
Another reason that Membership is a bad idea. For over a decade, we’ve been extolling the virtues of switching from the old-school Membership model to what has been dubbed a Partnership model…and the advantages are several. “Membership” is when a business pays dues to an organization and, in return, receives a set of benefits. Those who join get the benefits; those who do not pay in do not.
In a DMO “Partnership” model, all tourism-related businesses receive a modest level of benefit at no charge (such as a listing on the website). But, those entities that are sophisticated enough to understand the value of enhanced listings, better online search placement and the ability to sell merchandise in the Information Center know that becoming a paid “partner” is a ticket to more business.
By the DMO listing all businesses, the destination benefits from looking more robust with more choices. Thus, the consumer is more likely to choose the destination for an upcoming visit, benefiting the entire community. And, Partnership DMOs often generate more revenue than Membership DMOs because the value of the model often commands a higher price point.
And now, there’s one more reason. While it’s pretty likely this wasn’t the primary reason the Mayor of Duluth orchestrated the move from DMO to ad agency in her community…she gave it as a rationale for her actions saying the DMO wasn’t representing all businesses fairly. And now, across the bay in Superior WI, the City has just amended the way it will allocate Room Tax revenues going forward. The Mayor there made the same comment…that it’s not fair for an organization that receives tax revenues to not market everyone.
It’s not the primary reason DMOs should move away from Membership, but public officials will beat us over the head with this seemingly rational argument, even when it wasn’t true in the case of Visit Duluth. They had transitioned to the Partnership model several years ago.
Replacing a DMO with an ad agency is a sensationally backward idea…a concept that should have been put to bed after our elected leaders witnessed DMOs spring into action to save business and jobs last year as the plague descended upon us all. How many businesses survived because of a DMO’s work? How many jobs were saved?
When the next existential crisis arrives, you’re going to entrust that role to an ad agency from 150 miles away? Yeah...good luck with that.
And, the RFPs keep coming. As former Visit Phoenix CEO Steve Moore said on a recent edition of the DMOU podcast, “you gotta smell the train coming; when you hear it, it’s too late.” If you smell an RFP in your future, call us so we can strategize your next move before the train gets too far down the track. Phone call’s free.