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HomeMy WebLinkAboutMINUTES Advertising and Public Relations Committee 1972-10-24RECORD OF PROCEEDINGS Advertising and Public Relations Committee October 24, 1972 Committee: Chairman Wagner; Trustees Prosser and Dannels Attending: Chairman Wagner; Trustees Prosser and Dannels Also Attending: Town Administrator Dale G. Hill Mr. Ronald J. Reiland, Manager, and Mr. Ward Crowley, President of the Estes Park Chamber of Commerce appeared before the Committee and sub- mitted the attached recommendations for the 1973 Advertising Agreement. The Advertising and Public Relations Committee recommends the following changes in the proposed 1973 Advertising Agreement between the Town and the Chamber: 1. Paragraph One - The payment schedule should be changed as per Chamber of Commerce request. 2. Paragraph Eight - "The Chamber shall expend, during the year of 1973, at least one half of all sums collected by it from the sale of advertising in any of its brochures. This ex- penditure shall be in addition to the sums paid by the Town as herein provided." 3. Paragraph two D - The first sentence shall read, "The Chamber shall spend at least $3,850.00 for promoting of conventions, seminars and similar, group business in the Town of Estes Park." 4. Paragraph two A - "Production costs of advertising are an allowable cost." The Committee recommends that no changes be made in paragraph six re- lating to regional advertising boundaries. The Committee also recommends that no changes be made in the contract as it relates to postage costs. The Town Advertising and Public Relations Committee discussed the con- vention gross receipts fee proposal at length. There being no further business, the meeting adjourned. i,irjv 1 ;5 1972 j 101 ri di- L•ii S f'r,iii� DO=.iD 0 F T?,U�TEES Shall include the following sentence, Dale G. Hill, Town Administrator TO: TOWN OF ESTES PARK, ADVERTISING COMMITTEE FROM: ESTES PARK AREA CHAMBER OF COMMERCE DATE: OCTOBER 24, 1972 SUi3JECT: 1973 ADVERTISING CONTRACT BETWEEN TOWN AND CHAMBER GENTLEMAN: We have received a copy of the September 1, 1972, report from the advertising committee to the Board of Trustees regarding the coming year's advertising contract between the town and chamber. Based on this report and a copy of the 1973 advertising contract furnished by Mr. Dale Hill, we would like to suggest your considering the following proposed changes. 1. Page 1, Section 1, Paragraph 2. (suggest change to read as follows). $3,375.00 on January 15, 1973, $3,500.00 on February. 15, 1973, $3,500.00 on April 15, 1973, $3,500.00 on June 15, 1973, and $1,541.67 on the 15th day of August, October and December, 1973. The amount of these payments are subject to the provision that the Estes Park Area Chamber of Commerce provide $3,500.00 from its own sources and that any reduction in the Chamber of Commerce funds shall proportionately reduce the Town of Estes Park funds. JUSTIFICATION If the film expense of $3,500.00 is not allowed under seperate allocation then we would request your consideration in allowing payment to the Chamber according to our suggested schedule so that we may meet our obligation to the producer shortly after the first of the year. We can fulfill this obligation without the "stepped -up" payment schedule but do not want to take any chance in jeopardizing our regular advertising efforts early in the year. Most of our advertising expenditures come before summer and following the proposed schedule will insure adequate funding during the early part of the year to meet any advertising requirements. 2. Page 3, Section 6. (suggest change to read as follows) The Chamber shall spend a minimum of $2,750.00 for regional advertising. This regional advertising area is to consist of any area located within a 600 mile radius of Estes Park. JUSTIFICATION It is our feeling that the region within a 600 mile area would be more logical than that outlined in the contract. The con- tract definition of regional appears too small and although we cannot underestimate the importance of our advertising for the Colorado market we do feel that a 600 mile radius offers more effective potential than strictly limiting efforts to the narrower geographical area. 3. Page 3, Section 8. The advertising committee of the Estes Park Area Chamber of Commerce would suggest that this section be removed from the advertising contract. However, in the event the town advertising committee wishes to have a proportionate amount of the directory income specifically allocated we would suggest your consideration at permanently maintaining that amount at one/half of all sums collected from the sale of advertising in the directory. JUSTIFICATION At this time the only publication of the Chamber of Commerce which yields any income to the Chamber is our directory. We plan no other publication which would result in any form of income and will assure the town advertising committee that none will be implemented without their knowledge and approval. It is ourimpression that this restriction was originally implemented as a result of the possibility of the Chamber applying the cost of the directory to the town advertising funds and then taking the income and using it for administra- tive expenses. Certainly this could be a possibility. How- ever, we feel that we have made sincere efforts at increasing our advertising program and have not abused the guidelines set down for us by the town. Our 1972 advertising expenses considerably exceed the amount outlined in our 1972 contract. In fact‘ we will spend over $28,000.00 for direct, allowable advertising before this year is over. That— s clear evidence that we are not robbing our advertising effort for administra- tive overhead. Our membership income this year was over $30,000.00. Up about $6,000.00 from last year. We feel that our membership income will take care of our administrative burden. It logically follows that if we do not require this directory income for our administration then why do we desire our removing it from the contract. Well, in order to assure sound management of our advertising and administrative pro- grams we must plan and then implement. In examining the directory you will find that roughly half of the directory is devoted to cover, map, information and statistics which are not of an advertising or income nature. Certainly, if we were to exclude the advertising from the directory it would cost more than half of the present amount to produce. This would then be a complete cost that could be applied against town advertising income with no question as no income from member- ship advertising would be included. We need the directory - regardless of its content and the income generated from selling ads within certainly result in increased income for the Chamber and a better publication. -2- r In addition to this, the directory by its very nature creates a great deal of expense in handling. It is heavy. Postage is expensive. It encourages inquiries which would not have resulted without its use. Therefore, we feel that although we have not been in a position to use any of the directory income for non -advertising purposes we can, and may some day need, to use some of these funds in supporting the directory use. By placing the restriction of eventually guaranteeing that the full amount of income from directory advertising be placed back into only direct advertising we may be in a future position of requiring a variance from the contract to allow us more freedom. We do not wish to violate any good manage- ment of our funds but do feel that a portion of the income generated should logically apply to the handling burden of the directory itself. We will also be printing an additional 10,000 directories this year - which will be distributed by the National Park - and our burden of support will be further increased. 4. Page 2, Number 2, Section d, Last Sentence. (suggest change to read as follows) The maximum amount that may be spent for mileage shall be less than twenty (20) percent of the total spent for group and convention business. JUSTIFICATION Due to the contract allowing summer and winter advertising funds to be spent for the pursuit of convention business we may spend more than the amount presently stated in the contract. As it now stands we may spend more than "the above amount" and if we do we would perhaps require more travel. If this is the case we would appreciate your consideration in being able to apply the percentage to the total amount spent in case we require it. ADDITIONAL CONSIDERATIONS AND CLARIFICATION: 1. Although the "record of Proceedings" from the Advertising Committee of the town of September 1, 1972, specificallymakes mention of the disapproval of the "national image" advertising funds in amount of $7,000.00, there is no specific mention of the $3,500.00 requested by the Chamber for the motion picture being produced. Are we correct in assuming that this amount requested has not been treated as a seperate amount and that the cost of the film is to come from the normal advertising funds to be received in the contract?ie.The $18,500.00 to be spent by the Chamber according to the terms of the contract includes paying for the film from these funds. r 2. We would also appreciate a ruling by the advertising committee of the town regarding their consideration of allowable advertising expenses. If, in the course of our advertising efforts, a direct mail advertising piece from our office is mailed may the Chamber include the cost of postage in mailing said advertising piece as an advertising expense? If these direct mail advertisements result in a reeponse from the receiver may the Chamber consider the cost of reply (including postage) as an advertising expense? If, as a result of a specific coded advertisement, we receive an inquiry replying to the coded advertisement may the Chamber consider the cost incurred in replying to that soli- cited advertisement as an advertising cost? ? In the advertising report of September 1, 1972, to the Board cf Trustees the paragraph following Section 5 specifically refers to the committee recommending to the Chamber that "serious consideration be given to a ten percent gross receipts fee being charged to all facilities receiving conventions from the Chamber of Commerce program." A program of this nature has been considered by the Chamber in the recent past and it is the opinion of our Board of Directors that such a plan is not feasible at this time for several reasons. First, our approach on solicitation of group business ;:as been to work with the group representative in selling the area - the things to do and see, etc. Then, to work with the representative in finding a suitable facility for their headquarters, lodging, etc. We usually have several from which to choose and rather than get involved in making direct arrangements we prefer to take the representative to the various locations and have them choose and work out for themselves their decision as to the lodging. This method eliminates possible friction between the Chamber and our accommodations members due to the fact that the group repre- sentative has made the decision. If we were to book direct there would be a difficulty in justifying to other accommoda- tions owners why we did not book the group into their facility. The Chamber of Commerce is not a travel agency. If we were to assume the position of an agent the only feasible way we can see of insuring a minimum of difficulty is to collect all funds in advance from the group or convention and then reimburse the accommodation less our 10%. Thiswould not only greatly increase the difficulty of our task but directly involve l +1,4. Chamber (gets us in the middle, so to speak) and 'r'_..ates our handling funds - something we have avoided in the past. Acting as an agent would also involve another consideration. Does the fee also apply to food when booking a group? Some facilities have food service capability and they will not appreciate being forced to relinquish any percentage for this service when other accommodations cannot offer the service. Also, it does not seem reasonable to try to collect a fee when booking groups into a restaurant oper- ation with no lodging involved. Yet, if we do not, -4- r the accommodations members will feel that if we are to collect from them we should also collect from the restaurants. The present managerial responsibilities are quite involved and this type of program would both increase the time involved and appear to be better suited to an operation in which a full time representative works on booking groups. If the Chamber were to justify the expenditure of a full time sales person to devote all his efforts to this program it may be more feasible that this program could be implemented. However, when considering the time that can reasonably be spent by the Chamber in this effort it does not appear that a "fee" structure is as desirable as first imagined. Also, initially this personnel would have to be subsidized and small accommodations not receiving group business - and summer operators - would object to funds being taken from advertising to help big accommodation owners. The Area Accommodations Association is divided on this approach. Some do feel that it is a means of the Chamber realizing additional funds. Others feel quite strongly that booking groups is a part of our job and should be done as a procedural effort and included in the membership. One of their directors has stated "I think this percentage idea is fine - so long as the town can assure me that all the people I send to restau- rants, to the golf course, to the hardware store, to the barber, etc., will result in my getting 10% that I should have for sending my guests to them, then I am for it." Although this is not being realistic it does point out that the Chamber stands a grave risk in reducing its effective membership to receive questionable additional income from acting as an agency. In a recent effort to determine other Chamber involvement in a "booking" fee setup we can find no substantiated record of any Colorado Chamber presently engaged in this type of program. Most Chambers have found implementation of funds available to them from sales tax, or a head or bed tax is the best means of financially supplementing their programs. A call to the U. S. Chamber resulted in the suggestion that the only realistic means of implementing this type of pro- gram is by having an independent division of the Chamber acting as a booking staff with the financial support for their efforts coming from the fees collected. However, in their opinion, the only way that this could be realistically done was in a large chamber where there could be clear cut distinction between normal Chamber functions and a booking division. The Chamber of Commerce thanks you for your consideration and appreciates the opportunity of working closely with you in mutually satisfying our advertising reeds. We will present an advertising budget for your review before January 1, 1973. Preside =5-