BY RICK HAGLUND
When Sally Laukitis visited Mississippi over the recent holidays, her friends and family there couldn’t stop talking about the award-winning Pure Michigan tourism promotion campaign.
“They kept saying, ‘What is it with Michigan and those ads?’” said Laukitis, executive director of the Holland Area Convention & Visitors Bureau. “When you create that kind of buzz in other markets and people are remembering it, that’s amazing.”
In a state that has had little to crow about over the past decade, the lush, emotional Pure Michigan advertisements have captured the hearts and dollars of travelers like no other media campaign in the state’s history.
“I can still watch those ads and I’ll tear up,” said Steve Yencich, president of the Michigan Lodging and Tourism Association in Lansing.
Pure Michigan is a television and radio advertising campaign that showcases Michigan’s natural resources and tourism attractions. The ads, which mainly run on cable television stations such as the Golf Channel and Food Network, went national in 2009.
Forbes magazine has ranked Pure Michigan as the sixth-best state travel promotion campaigns of all time. Travel Michigan, the state’s tourism promotion arm, says the Pure Michigan campaign is a key reason its website is perennially the most visited state tourism website in the country.
And a study commissioned by Travel Michigan found that Pure Michigan’s first national advertising campaign in 2009 attracted 680,000 new visitors to the state and generated $17.5 million in tax revenue.
Now, Gov. Rick Snyder wants to spread the Pure Michigan magic to the state’s business attraction efforts. His administration has decided to end the Upper Hand business advertising campaign, which featured Michigan-born actor Jeff Daniels as its spokesman, and develop all its marketing efforts under the Pure Michigan brand.
“With the Upper Hand, to be frank, we just could not get our arms around a (return on investment) that said this is the best way to spend our money,” Finney said.
Michigan had been spending about $10 million a year on the Upper Hand campaign, funded by the 21st Century Jobs Fund, money the state received by securitizing its share of the settlement of federal tobacco litigation.
Finney said the MEDC will spend about half that amount this year on a new business-attraction campaign that depends heavily on public relations work and using business executives to promote the state by word of mouth.
Snyder has said every budget program will be scrutinized for performance and investment return, a process he calls “value for money.”
But the future of the Pure Michigan tourism campaign is about as clear as a fog-enshrouded early morning on Mackinac Island.
Funding for Travel Michigan has been cut from a record $28 million last year to $15.4 million in the current fiscal year. With the state facing a $1.8 billion projected deficit, funding could be slashed significantly in the next budget year, beginning Oct. 1.
Snyder also wants to cut business taxes by as much as $1.5 billion, which could balloon the projected deficit to more than $3 billion.
“We’re optimistic given what’s transpired,” said George Zimmermann, vice president at Travel Michigan. “But if we go back to $5. 4 million, we’re out of business.”
The Legislature originally appropriated just $5.4 million to Travel Michigan this year. The steep funding cut resulted in the agency canceling its planned fall advertising.
But lawmakers agreed in December to transfer an additional $10 million to the agency from the 21st Century Jobs Fund, allowing it to fund the critical, upcoming spring national campaign.
Yencich said a consistent level of funding is crucial to establishing the Pure Michigan brand and attracting a significant number of travelers to the state on a regular basis.
“The essence of good marketing is consistency. It takes time and repetition to move the mindset of the consumer from ignorance, to recognition to the point of purchase,” Yencich said. “It doesn’t matter if you’re marketing cars or a destination like Michigan.”
Finney said the Snyder administration hasn’t decided on its budget recommendation for Travel Michigan for next year. The governor must submit a state budget to the Legislature by mid-March.
Many lawmakers who won their seats in last November’s election promised in their election campaigns to support funding for tourism marketing. Among them were Sen. Goeff Hansen, R-Hart, and Rep. Frank Foster, R-Pellston, chairs of the Senate and House tourism committees.
But Michigan Manufacturers Association President Charles Hadden, who backs funding for the Pure Michigan tourism and business marketing campaigns, said it’s too early to get a read on whether lawmakers will support the programs.
“My sense is that they’re not sure,” he said. “They’re still wandering around a bit.”
And although the Pure Michigan ads have been immensely popular, taxpayers seem to have mixed feelings about funding them.
An EPIC-MRA poll in November for the Detroit Free Press and WXYZ-TV in Detroit found 67 percent of state residents supported continued funding of the Pure Michigan campaign.
The 600 people polled by the Lansing firm were told that the state spends $28 million a year in tax dollars on tourism promotion and asked if they favored or opposed continued funding of the Pure Michigan campaign.
But a poll in December for the Detroit News by Chicago-based Glengariff Group Inc. found that 58 percent of Michigan residents opposed increasing annual Pure Michigan funding from the $10 million approved by the Legislature in December to the $30 million that the state tourism industry has sought.
Glengariff Chief Executive Officer Richard Czuba said the survey results from the 600 people polled show they regard tourism promotion as “a frill” and want their tax dollars spent only on essential government services.
“This is not a surprise,” said Czuba, who headed Travel Michigan from 1996 to 1998. “The reality is the voters in the last three or four years have been ahead of public officials on the need to balance the budget.”
Michael LaFaive, director of fiscal policy at the Mackinac Center for Public Policy, said the state shouldn’t be in the business of promoting the travel industry.
“This is an unfair program,” said LaFaive, whose organization promotes free market solutions to public policy issues and does not think government should support one industry over another. “A fair field and no favors is the best approach to economic development.”
Nevertheless, LaFaive said he’s resigned to continued taxpayer spending on the Pure Michigan campaign because it’s so popular and is supported by Snyder and many other Republicans who control state government.
“The advantage of Pure Michigan is beautiful imagery,” he said. “There is no amount of statistical studies I could present that would trump the good feelings Pure Michigan produces among the Lansing political class and its supporters.”
State officials say the Pure Michigan campaign more than pays for itself and has polished Michigan’s tarnished national image.
A recent study for Travel Michigan by research firm Longwoods International in Toronto found the $31.6 million spent on Pure Michigan’s summer advertising since 2006 has generated $2.94 in new tax revenue for every dollar spent on the campaign.
“Pure Michigan is perfect example of Gov. Snyder’s value for money philosophy,” the tourism and lodging association’s Yencich said.
LaFaive said he’s dubious of the claims of positive investment returns, noting that many states have produced similar rosy research to justify spending on tourism promotion.
Finney defended Michigan’s findings as being based on “very solid data.”
Michigan also subsidizes many other industries, including the film and auto businesses, with billions of dollars in tax credits, Zimmermann and Yencich said. And the state’s food industry has the Department of Agriculture devoted to it.
Zimmermann said the Michigan’s investment in travel promotion supplements private advertising expenditures of the state’s hotels, restaurants and tourist attractions.
The state’s contribution is important, he said, because it gives travelers an overview of the Michigan’s assets that tourism-related businesses can’t do on their own.
“People are not going to come here unless we can show them what we have to offer,” Zimmermann said.
But faced with severe budget problems, many states are struggling with how to pay for their travel promotion efforts. Wisconsin, Illinois and Indiana have all faced cuts in general fund appropriations to their tourism agencies in the past several years.
Zimmermann, who chairs the National Council of State Tourism Directors, said Illinois, Florida and other big-spending states also benefit from tourism-related taxes.
Those include statewide taxes on car rentals, hotels and entertainment tickets. Some states, including Missouri, dedicate sales taxes from travel-related spending to tourism promotion efforts.
Efforts to enact similar taxes in Michigan have failed in recent years. Zimmermann said he sees no possibility of those proposals being reintroduced in the current political climate.
“Raising taxes–how popular is that going to be?” he said.
But he and others say the Pure Michigan campaign is too valuable to be scrapped. It has transcended tourism promotion and become a symbol of pride for a state that has more to offer than many realize, they say.
“It’s a brand that tugs at your heartstrings and speaks to the beauty of Michigan as a place to live and play,” said Laukitis of the Holland Convention & Visitors Bureau. “People want to live in a beautiful area. Pure Michigan is that.”