Open for Business Marketing Performance Report April 13, 2015 Prepared by ESD Marketing Attached please find an analysis of Open for Business (OFB) Marketing Performance, commissioned by ESD and done by Russell Research, an outside, independent market research organization. Overview For much of the 20th century, New York State led the nation. With a diverse economy, abundant natural resources, a highly skilled workforce, and world-renowned academic and research institutions, New York State was the place where success happened. But the world changed and New York did not. By 2010, statewide unemployment had reached record levels at 9.6%, with long-term unemployment at a historic high. Meanwhile, virtually every other State in the Union was focused on economic development, with aggressive marketing to position themselves as the best places to relocate Companies or take a vacation. For 10+ years, Florida, Michigan, California and others consistently outspent New York on the tourism front, while Texas and Louisiana, among others, are extremely aggressive with business expansion and attraction marketing. These efforts helped propel economic development for these States, creating worldwide visibility while repositioning an under-marketed New York as a poor State to do business, a forgotten destination for tourists From day one, the Cuomo administration has been committed to job growth across the State. Soon after taking office, the Governor launched a transformational agenda that included:         Creating on-time budgets Creating a State spending cap Reducing taxes for the middle class Establishing a property tax cap Improving the State’s bond ratings Creation of the Regional Economic Development Councils Recognizing the power of tourism as an economic driver throughout the State Engaging the State’s premiere academic institutions in economic development initiatives through the creation of Start Up NY While changes were taking hold, deeply entrenched perceptions lagged. To attract and retain jobs, the world needed to understand a new New York was taking shape. After so many years on the sidelines, we are now relentless in our quest to tell New York’s story, making sure the world understands the State’s assets and the momentum that has been created by a robust economic development agenda. And it is working. Advertising is driving huge increases in website visits, we have measured a +62% increase in positive perceptions of New York by business executives and more than half of all tourists in our marketing regions would consider upstate NY for their next vacation. More importantly, we believe shifts in perceptions is helping fuel the decline in unemployment, the increases in private sector jobs and the sustained growth of our tourism economy. Additional highlights are outlined below and the full report is attached. Open for Business Marketing The heart of our marketing strategy is simple: improve perceptions of New York State as a premiere site for business expansion, retention and relocation and increase consideration of New York as a great destination for tourists. Advertising performance is measured by three factors: 1. Build website traffic to encourage people to learn more about New York State 2. Change perceptions of New York State through improved ratings on the State as a tourism destination or a place to operate a business 3. Increase consideration of New York State as a place to visit or move/expand a business Tracking performance against these measures has been accomplished through a series of initiatives, including ongoing analysis of web traffic during advertised and non-advertised periods (using Google Analytics) as well as custom research, conducted by a well-respected, national research firm (Russell Research), to measure shifts in perceptions and consideration among both tourists and business executives inside and outside the State. As we approach the end of the original Open for Business contract, and contemplate a new RFP for marketing services effective November 30, 2015, ESD has asked Russell Research to summarize the results from our ongoing research in a single document. Highlights are as follows: Business Development       Marketing has been very successful at driving traffic to the website with a 530% increase compared to periods in the same year when New York State did not run advertising. ESD’s marketing efforts have successfully reached business executives with one-half of New York State-based executives (52%) and one-quarter from out-of-state (26%) recalled having seen one or more commercials from the StartUp NY campaign. There has been a strong positive shift in perceived momentum of New York State’s business climate. One-half of professionals (50%) believe the State is moving in the right direction, a 72% increase in just 12 months after the launch of the campaign. A majority of executives (55%) believe that New York State is an excellent or very good place to do business – a 62% increase since October 2013. This increase was more pronounced out-ofstate, with a 122% increase in the same time frame (23%  51%). More than three-fifths of NY State executives (63%) would consider New York as a place to do business, a finding that has not statistically changed over time. However, a slight majority of outof-state executives (51%) indicate they would consider opening or relocating a business to New York State, a 132% increase since October 2013 (22%), which is statistically significant. For most metrics, results are stronger among professionals who recall seeing StartUp NY television advertising. Tourism  Periods with a media campaign spend saw an average weekly website traffic increase of 48% compared to periods in the same year when the State did not run advertising.    New York State is the most top-of-mind destination for summer vacations and/or getaways as one-half of New York State residents (51%) and two-fifths who live outside the State (41%) named New York State as a vacation destination on an unprompted basis. Nearly four in five New York State residents (78%) would consider a New York State summer vacation in the future and nearly three-fifths (56%) of out-of-state residents would consider the state. This is higher than all neighboring states/regions among in-state residents and only trails New England among those who live out-of-state. A slight majority of New York State residents (52%) and nearly one-half from target non-NY markets (46%) recalled seeing or hearing an advertisement for the State in the three months prior to the study, by far higher than any other competing destination. The Russell Research report (attached) reaffirms the positive impact that our marketing efforts have had on the perceptions of New York State and the increased consideration to visit or locate a business here. Ultimately, we believe these perceptual improvements have helped drive job growth across the state as well as increases in tourism visitors and economic impact.   As a final note, this marketing data provides a strong baseline against which we can measure the impact of future marketing initiatives and for performance metrics associated with the new Marketing Services RFP that will be conducted later this year.   EXECUTIVE SUMMARY      Research Implications    Research conducted by Russell Research in 2013‐14 indicates that Empire State Development’s (ESD) marketing  efforts have positively impacted perceptions and consideration of New York State both as a place to do business  and visit for a vacation or getaway.  Business Development         Marketing has been very successful at driving traffic to the website with a 530% increase compared to  periods in the same year when New York State did not run advertising.   ESD’s marketing efforts have successfully reached business executives with one‐half of New York State‐based  executives (52%) and one‐quarter from out‐of‐state (26%) recalled having seen one or more commercials  from the StartUp NY campaign.  This has resulted in strong awareness of the StartUp NY program. Three in five New York State executives  (60%) are aware of the program, and while only three in ten outside of the state (30%) are aware of StartUp  NY, this includes two‐thirds of executives from large businesses (65%).  There has been a strong positive shift in perceived momentum of New York State’s business climate. One‐half  of professionals (50%) believe the state is moving in the right direction, a 72% increase in just 12 months  after the launch of the campaign.  A majority of executives (55%) believe that New York State is an excellent or very good place to do business –  a 62% increase since October 2013. This increase was more pronounced out‐of‐state, with a 122% increase in  the same time frame (23%  51%).   More than three‐fifths of NY State executives (63%) would consider New York as a place to do business, a  finding that has not statistically changed over time. However, a slight majority of out‐of‐state executives  (51%) indicate they would consider opening or relocating a business to New York State, a 132% increase since  October 2013 (22%), which is statistically significant.  For most metrics, results are stronger among professionals who recall seeing StartUp NY television  advertising.  Tourism       Periods with a media campaign spend saw an average weekly website traffic increase of 48% compared to  periods in the same year when the State did not run advertising.  New York State is the most top‐of‐mind destination for summer vacations and/or getaways as one‐half of  New York state residents (51%) and two‐fifths who live outside the state (41%) named New York State as a  vacation destination on an unprompted basis.  Nearly four in five New York State residents (78%) would consider a New York State summer vacation in the  future and nearly three‐fifths (56%) of out‐of‐state residents would consider the state. This is higher than all  neighboring states/regions among in‐state residents and only trails New England among those who live out‐ of‐state.  A slight majority of New York State residents (52%) and nearly one‐half from target non‐NY markets (46%)  recalled seeing or hearing an advertisement for the state in the three months prior to the study, by far higher  than any other competing destination.   More than two‐fifths of New York State residents (44%) and more than one‐third from out‐of‐state (36%)  recalled seeing one or more commercials from the 2014 summer tourism campaign. Across multiple  1        Research Implications    campaigns with a range of support levels from a budgetary and timing perspective, this is an above average  level of campaign recall.  BUSINESS DEVELOPMENT MARKETING  The stated objective of Empire State Development’s marketing efforts has been to create a compelling message  that would first drive traffic to the ESD website and ultimately begin the long‐term process of changing  entrenched perceptions that NY State is anti‐business.  Economic development advertising was directed to business leaders inside the State (to drive consideration for  retention and business expansion) and outside the State (to drive consideration for relocation). This advertising  was very successful at driving traffic to the website with a 530% increase compared to periods in the same year  when New York State did not run advertising (source: Google Analytics).  14000 12000 10000 8000 Campaign 6000 No Campaign 4000 2000 0 2011 2012 2013 2014 st th Source: Google Analytics, data January 1, 2012-November 29, 2014 (excluding August 31 -November 8 due to Google tagging issue)   Russell Research has conducted a series of research studies for Empire State Development which has assessed  perceptions of New York State among executives within the business community both inside and outside New  York State.  • Advertising Evaluation: October 2013   • Advertising Evaluation: March 2014  • Tracking Study: October 2014  A range of metrics captured over the course of the several research studies suggests marketing efforts have  been effective in improving perceptions of the New York State business climate. This is particularly evident when  examining perceptions and consideration of the state among large out‐of‐state businesses (a primary target for  2        Research Implications    relocation) and when results of most key metrics are compared between those who recall seeing one or more  advertisements versus those who had not – with the former having far more positive perceptions than the  latter.    3    Ressearch Im mplicatiions    Campaign n Reach    ESD’s marrketing effortts have been ssuccessful in reaching the  target audien nce of busineess executivess, particularly y  among the valuable larrge company segment (250 or more em mployees).  of New York SState‐based e executives (52 2%) and one‐‐quarter from m out‐of‐state (26%) recalleed having  One‐half o seen one or more com mmercials from m the StartUp p NY campaiggn. This includ des more than n three‐fifths of executives  in large bu usinesses locaated in New YYork State (63 3%) and one‐‐half headquaartered outsid de the State (52%).  Aw ware of adverttisement 100 1 90 80 70 60 50 40 30 20 10 ‐ 57  52  39  26  33  63  55  52  39  29  2 1 12  Total New York Non‐ Small New York Me edium Large Small Medium m Large 19   Sm mall  Medium  Large   This broad d advertising reach has ressulted in strong awarenes s of the StarttUp NY prograam.  Three in five New  York State e executives ((60%) are awaare of the pro ogram, and w while only threee in ten outsside of the staate (30%) are e  aware of SStartUp NY, tthis includes ttwo‐thirds of executives frrom large bussinesses (65% %).  Awaare of "StartUp New York" 100 90 80 70 60 50 40 30 20 10 ‐ 45  30  39  63  58  65  59  38 8  14  Total   62  60  6 New w York Non‐ Small New York Mediu um Large SSmall Medium m Large 19   SSmall  Medium m  Large     4    Ressearch Im mplicatiions        omentum  Brand Mo Momentu um is a key indicator of a b brand’s health h (with the Neew York Statee business clim mate being th he brand).   When the e first research was conduccted for ESD, less than thr ee in ten bussiness professsionals (29%) believed  New Yorkk State’s busin ness climate’ss momentum was moving  in a positive direction, witth the other sseven in ten  believing the state wass either holding its ground d (43%) or mooving in a neggative directio on (27%). Durring this same e  time perio od, Texas wass statistically significantly m more likely too be seen as h having positivve brand mom mentum  (48%).  100 90 80 70 60 50 40 30 20 10 ‐ 11  27  Worse 41  Stayed the same 43  Better 48  29  Neew York Texas     This dram matically changed by the Faall of 2014, with one‐half oof professionaals (50%) now w believing th he state is  moving in n the right direction, a 72% % increase in jjust 12 monthhs after the laaunch of the ccampaign. Th his includes  more than n double the percentage o of out of state e professiona ls (23%  488%) and nearlly tripling among  executives in large bussinesses locatted out‐of‐staate (25%  6 9%). Momentum was also o much higher among out‐ of‐state p professionals w who were aw ware of the StartUp advert ising (78%). 100 90 80 70 60 50 40 30 20 10 0 Fall 2013 Winteer 2014 Fall 2014 6 65 69  57  55 51  49 50  43 36 29 48  38 27 23 Total New YYork Non‐‐New York   5    Small 30  37 41 25 Medium m Laarge Ressearch Im mplicatiions      Profession nals aware off the StartUp advertising campaign werre more likelyy to believe th he State is mo oving in a  positive d direction.  100 90 80 70 60 50 40 30 20 10 ‐ Campaign Aware e 78  63  56  48  41  4 Total   Campaiign Unawaree 37  New Yoork   6    Non‐N New York   Ressearch Im mplicatiions    A Place To o Do Business    This increase in momentum has led d to a majorityy of executivees (55%) to beelieve that Neew York Statee is an  excellent or very good place to do b business – a 6 62% increase  since Octobeer 2013. This iincrease was more  pronouncced out‐of‐staate, with a 122% increase iin the same t ime frame (23%  51%), and includes three‐ quarters o of those out‐o of‐state who recalled the 2 2014 campaiggn (74%) ratin ng the state aas excellent o or very good. 100 90 80 70 60 50 40 30 20 10 ‐ Fall 2013 3 Winter 2014 59  55  44  Fall 20014 51  45  44  43  34  23  Total New YYork No on‐New York     10 00 90 9 80 8 70 7 60 6 50 5 40 4 30 3 20 2 10 1 ‐ Campaign Awaree Campaign Unawaree 74  67  63  56  48  4 Total 44  New Yoork       7    Non‐‐New York   Ressearch Im mplicatiions    Campaign n Impact on SState Imageryy    The Fall 2014 research exposed exe ecutives to a rrange of percceptual statem ments that co ould be used tto describe  New Yorkk State from aa business perrspective.   Executives who had se een the StartU Up NY advertiising campaiggn rated 10 off 13 attributees statisticallyy significantly  higher thaan those who o had not seen n the advertissing – furtherr pointing to tthe efficacy o of ESD marketting (boxes  below ind dicate statisticcally significant difference from unawa re profession nals).  Is open to growth Provvides a good infrasstructure for busin ness 77  56  Is d dedicated to bringging jobs to their sttate 77  60  Prrovides a quality w workforce for busin ness 75  6 64  Is open to innovattion 75  58  Prrovides good oppo ortunities for busin ness 73  55  Invests iin higher educatio on to provide a workforce with the skills… 71  52  Is friendly to busin ness 71  57  Has tax in ncentives which arre friendly to busin ness 70  41  Is good for my busin ness 70  50  Has a government H  that understandss what business neeeds 52  Is taking bo old steps for busin ness 51  Is an easy plaace to start a busin ness 52  ‐   78  66  10   8    20 30 40 50 60 Campaign C A Aware C Campaign U Unaware 67  66  2  62 7 70 80 90 100 Ressearch Im mplicatiions    Considera ation    The comb bination of inccreased mom mentum and aa perceived beetter businesss climate hass resulted in o out‐of‐state  executives being far m more likely to cconsider New w York State aas a place of b business.  g  Specifically, a slight maajority of out‐‐of‐state execcutives (51%)) indicate theyy would conssider opening or relocating 2% increase siince October 2013 (22%), which is statiistically signifficant.  a businesss to New Yorkk State, a 132 Further, three‐quarters of executive es who recall having seen  the StartUp N NY television campaign (74 4%) would  consider tthe state, com mpared to lesss than one‐half (44%) whoo haven’t seeen state adverrtising.  Consideraation of New York State as a place to do o business ha s always been strong amo ong New Yorkk State‐based  profession nals with no sstatistically significant diffe erences over  time. Meanw while, consideeration amon ng non‐New  York profe essionals has experienced significantly positive grow wth over timee.  100 90 80 70 60 50 40 30 20 10 ‐ Fall 2013 Winter 20014 Fall 22014 69  49  45  57  63  56  51  41  22  Total New YYork No on‐New York     100 90 80 70 60 50 40 30 20 10 ‐ Caampaign Awaare Camppaign Unawaare 74  68 8  65  60  0  50 Total 44  New Yoork 9    Non‐‐New York     TOURISM MARKETING    Research Implications    Marketing efforts in the area of tourism have a stated objective of creating awareness and enthusiasm for the  array of New York State destinations that will ultimately translate to consideration of the state as a vacation of  spot or weekend getaway.  The “I Love NY” campaign has been directed toward the leisure travel market including family vacationers and  other valuable audience segments. Recent campaigns have targeted state residents as well as potential  vacationers in surrounding markets.  Periods with a media campaign spend saw an average weekly website traffic increase of 48% compared to  periods in the same year when the State did not run advertising. In fact, organic average weekly traffic (defined  as traffic to the website during non‐promoted periods) has decreased in each of the last full two years (2012‐ 2013), underscoring the importance of paid media in keeping New York State top of mind for visitors (source:  Google Analytics).  40,000 35,000 30,000 25,000 20,000 Campaign 15,000 No Campaign 10,000 5,000 0 2012 2013 2014   Source: Google Analytics, data January 1, 2012-October 25, 2014  A tracking study was conducted in June 2014 to establish baseline metrics for New York State and assess the  impact of advertising on perceptions and consideration of the state as a tourist destination. A second wave to  further evaluate trends will be conducted in March 2015.        10    Unaided D Destination R Recall   Ressearch Im mplicatiions      The reseaarch indicatess the advertisiing campaign n has reached  the target au udience and iis motivating,, resulting in  New Yorkk State being w widely top‐off‐mind and co onsidered am ong target travelers.  Recent leaarnings in the e field of behaavioral econo omics concludde that consumers often taake “mental sshortcuts”  when makking a decisio on. Therefore, top‐of‐mind d associationss are particulaarly importan nt in travel plaanning as  consumerrs will often n not take the time to do the e research neeeded to find new travel deestinations, in nstead  investigatting / conside ering the destinations that come to minnd. From a maarket research h perspectivee, this results  in unaided d awareness being a very important me etric.  New Yorkk State is the m most top‐of‐m mind destinattion for summ mer vacationss and/or getaways as one‐half of New  York state e residents (51%) and two‐‐fifths who livve outside thee state (41%) named New York State ass a vacation  destinatio on on an unprrompted basis. Top‐of‐min nd recall was  significantly higher amongg all audiencees who  recalled the summer 2 2014 tourism campaign.  41  51  12  8  12  21  8  8  7  5  16  14  4 7  5  6  5 8  21  32  17  18  32  33  9  11  13  12  20  19  20  35  NYS (Other than NYC) New York City MA (Outside of Boston) Boston Connecticut Maine Ne ew Hampshire Rhode Island Vermont New Jersey Pennsylvania Florida Virginia South Carolina S Caribbean Canada ‐ 100 90 80 70 60 50 40 30 20 10 ‐ Campaiggn Aware 20 40 60 NY State Non‐NYS 80 100   Campaign U Unaware 62  57  42  40  Tottal New York 11    49  37  Non‐New YYork   Ressearch Im mplicatiions    Vacation Destination C Consideration    The strength of top‐of‐‐mind recall is reinforced w when examinning future co onsideration o of New York SState as a  summer vvacation destination. Nearrly four in five e New York Sttate residentss (78%) would d consider a N New York  State sum mmer vacation n in the future e and nearly tthree‐fifths (556%) of out‐o of‐state residents would co onsider the  state. Con nsideration off New York is higher than aall neighborinng states/regiions among in n‐state resideents and only  trails New w England among those wh ho live out‐off‐state.  Further, cconsideration of New York State for a su ummer vacattion is near eq qual among N New York Cityy residents  and those e who live in o other parts off the state.  74  New England 73  New Englandd 75  68  8  78 NYSS (Other than NYC) 56  58  Pennsylvania 77  N YS (Other thann NYC) 9  79 59  Pennsylvaniaa 55  57  50  New York City N 49  New York Cityy 54  51  50  New Jersey NY State N Non‐NYS N 51  ‐   20 40 0 60 80 58  New Jerseyy 38  100 ‐   12    20 40 0 60 NYC Rest of NY 80 100   Ressearch Im mplicatiions        ng Awareness  Advertisin The televiision advertissing has been very successful in reachinng the target aaudience.  A slight m majority of New York State residents (52 2%) and nearlly one‐half fro om target non‐NY marketss (46%)  recalled seeing or hearring an adverttisement for the state in t he three mon nths prior to tthe study, by far higher  than any o other competting destinatiion.     NYS (Other than NYC) 32  19  227  New York City 11  13  MA (Outside of Boston) 5  Boston 11  12  8  Connecticut 15  17  Maine 9  8  Ne ew Hampshire 4  6  Rhode Island 8  12  Vermont 31  229  New Jersey NY State 15  18  Pennsylvania ‐   46  20   13    Non‐NYS 40 60 80 100       Research Implications    Several destinations featured in Tourism advertising experienced increases in visitorship between 2013 and  2014 (source: New York State Tourism).     Baseball Hall of Fame  DIA: Beacon  Corning Museum of Glass  Olana State Historic site  Watkins Glen     Whiteface Mountain  Belleayre Mountain  Gore Mountain  Jones Beach State Park  Letchworth State Park  Minnewaska State Park  2014 Visitorship                   211,687                     85,425   416,000  est.                    84,679                   256,949                   218,348                   131,257                   202,718               2,303,067                   226,673                     96,737   2013 Visitorship               180,621                   75,002   400,000  est.                  75,794                212,720                192,427                118,509                198,211             2,019,613                221,331                   93,993   14      % Increase  17%      14%    4%  12%  21%  13%  11%  2%  14%  2%  3%    Ressearch Im mplicatiions        o recalled recent advertisin ng specificallyy remembereed seeing a nu umber of thesse  Target consumers who destinatio ons that have experienced increases in traffic betweeen 2013 and 2014.      When exp posed to commercials from m the 2014 su ummer tourissm campaign,, more than two‐fifths of N New York  State residents (44%) aand more thaan one‐third from out‐of‐sttate (36%) recalled seeingg one or moree  commercials. Across m multiple camp paigns with a range of suppport levels fro om a budgetaary and timingg perspective e,  this is an aabove averagge level of cam mpaign recall.    100 80 60 44  40 45  43  NYC Reest of NY 36  20 ‐ NY State Non‐NYS 15        Ressearch Im mplicatiions    Advertisin ng Quality    Exposure of the summer campaign to target travvelers confirm ms the adverttising is both appealing and motivating..  et audience (8 81%) indicate e they like thee I Love NY caampaign, inclu uding more th han four‐ Four‐fifths of the targe fifths of sttate residentss (85%) and three‐quarters from out‐off‐state (75%).. A study cond ducted by thee Advertising  Research Foundation h has suggested d that likeability is the singgle largest preedictor of a caampaign’s success.   100 1  90 80 16  70 60 20 10 0  12  2  11  2 22  Disliked d it very much Disliked d it somewhat 36  36  50 40 30 1  1  11  28  43  Neither liked nor disliked it Liked it somewhat 3 36  81 45  49  Total NY Statte 85 75 86 6 3 39  43  Non n‐NYS NYC 57  8 85 Liked it very much ‐ Rest of NY   Advertisin ng Motivation  More than three in five e New York State residents (63%) and oone‐half from m out‐of‐statee (50%) indicaate they  would be more likely to visit New York State in the summer bbased on the ccampaign.  100 1  1  41  36  1  1 ‐ 1  Much leess likely to consider 90 80 49  70 31  40  Somewh hat less likely to consiider Neither more nor less o consider likely to 60 50 40 35  57 34  63 50 58 6 67 36  30 20 10 35  32  22  29  Total NY Statee 26  14  32  ‐ NYC Non‐‐NYS 16    Rest of NY Somewh hat more likely to consiider Much m more likely to consider visiting NYS mer in summ