2008 International Advertising

California Tourism Canada Advertising ROI Research November 2008

Prepared by Strategic Marketing & Research, Inc.

2008 International Advertising

Table of Contents Background & Objectives Review of Phase 1 Findings Detailed Phase 2 Findings Individual Market Analysis Calgary Edmonton Vancouver Toronto

3 9 12 27 28 31 34 37

Conclusions & Recommendations Appendix

40 42

Calculations without Projected Trips Calculations with Projected Trips Questionnaire

43 45 47

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2008 International Advertising

Background & Methodology •

California has a strong public/private partnership that works to promote and market the state as a preferred travel destination. The California Travel and Tourism Commission (CTTC), a privately funded, non-profit corporation, works in concert with the Division of Tourism to implement these marketing efforts. These include domestic and international marketing programs. A key international market is Canada.

•

During the spring of 2007, advertising was implemented in three Western Canadian markets – Vancouver, Calgary, and Edmonton. In 2008, advertising aired in Toronto in addition to the three Western Canadian markets. Toronto is a large market, but it is much farther from California than the other markets. The new creative aired in Toronto from October 2007 to December 2007 and then aired in all four markets during February and March 2008. This research evaluates the effectiveness of those efforts.

•

This research was conducted in two waves; the first was reported in July 2008 and covered objectives primarily related to evaluating the appeal, influence, and impact of the advertising’s creative elements. It also measured awareness of the advertising and the cost to reach an aware U.S. visitor.

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2008 International Advertising

Background & Methodology • This second wave of research measured the level of incremental travel and return on investment. This research was conducted in October 2008 to allow time for consumers to visit the state after the conclusion of the spring advertising. • In 2007, the Canadian marketing efforts focused on the markets of Calgary, Edmonton, and Vancouver. In 2008, Toronto was added. Because Toronto is a new market and is located in eastern Canada, findings are reported by individual market, in aggregate, and also for the aggregate of the Western Canadian markets. The Western Canadian aggregate allows for direct comparisons to the 2007 results. • As measured by Statistics Canada in 2006, 49% of Canadian residents visit the U.S. We will use this number to estimate the number of U.S. visitors from each market. • Canada’s economy shrank in Quarter 1 of 2008 – its first quarterly decline since 2003, due to Canadian exporters taking a hit from a weakening U.S. economy. Canada’s economic growth is projected to be 1% for all of 2008, its slowest rate since 1992. It is important to consider Canada’s economic situation, as travel tends to decline during a slow economy.

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2008 International Advertising

Background & Methodology • This advertising effectiveness research was based on the methodology that has been used in evaluating California’s marketing and advertising efforts since 2003. It employs an online methodology to measure levels of travel and trip specifics within the target markets for comparison between those aware of the advertising and those not aware. The questionnaire, a copy of which appears in the Appendix, focused on state visitation, activities and cities included in the California trip, trip expenditures and duration, travel party composition, and the influence of activities in choosing California as the trip destination. • Data collection was conducted during October 2008 in the markets of Vancouver, Calgary, Edmonton, and Toronto with a goal of 400 completed surveys in each market. The final sample size was 1,687 (Calgary – 406, Edmonton – 393, Vancouver – 407, and Toronto – 481). • Respondents were screened to ensure that they have either visited the United States in the past two years or indicate that they are likely to visit in the next two years. They were also qualified to confirm their status as leisure travelers and as travel decision-makers for their households. • Upon completion of the survey process, the resultant data were compiled, analyzed, and weighted to be representative of the sampled populations. • The following report summarizes the key findings from this research and provides conclusions and recommendations for consideration. Strategic Marketing & Research, Inc.

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2008 International Advertising

Methodology • 1,687 completed interviews – Data collection in October/November 2008

• Web-based data collection methodology – Sample from selected targeted markets – Show ads to accurately measure recall – Target of households who had visited the US in past 2 years or were likely to visit in next 2 years

Market Calgary

406

Edmonton

393

Vancouver

407

Toronto

481

Total

1,687

• Surveyed by market, and weighted to be representative

Page 6

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2008 International Advertising

Market Geography & Population • We must consider the distance to California from each target market, especially with the current slow economy and likely reductions in travel spending. • Toronto is by far the most populous market, but it is almost twice as far from California as the next farthest market (Edmonton). • It is also meaningful to consider how much closer Toronto is than the Western Canada markets to New York and Florida. (San Francisco was chosen as the California location for this calculation)

. .

Vancouver

.

.

Edmonton

Calgary

.

Toronto

San Francisco

. Market Vancouver Calgary Edmonton Toronto

Miles to San Francisco 793 1,002 1,172 2,268

Miles to Orlando 2,618 2,300 2,370 1,048

Miles to New York City 2,433 2,031 2,030 340

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Orlando

Population 2,116,581 1,034,945 1,079,310 5,000,000 7

2008 International Advertising

The Advertising Campaign • The total 2008 media cost was $1,177,274. These expenditures were divided among the markets -$370,285 to Vancouver, $230,834 to Calgary, $199,871 to Edmonton and $376,284 to Toronto. • The 2008 media costs in the Western Canadian markets were similar to those in 2007. • New creative, which also aired in the U.S., uses several celebrities to market the state based on consumers’ desire to enjoy the relaxed California lifestyle.

2007 Media Costs

2008 Media Costs

$400,000.00

$300,000.00

$200,000.00

$100,000.00 Vancouver

Calgary

Edmonton

Toronto

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2008 International Advertising

Review of Phase 1 Findings

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2008 International Advertising

Phase 1 Findings Review As reported in the Phase I results, ad awareness hovers just below 70% in each market except Toronto, which is below 60%. Comparing just the western markets, awareness is down somewhat from 2007. By projecting this to the 49% of the Canadians who are US travelers and dividing by the money spent, it is possible to see both the number of aware households and cost per aware household. The advertising reached a wide audience with somewhat lower impact in the new market (Toronto). The cost to reach an aware household is a bit higher domestically, except for Toronto.

Ad Recall & Cost Per Aware Household

Calvary Edmonton Vancouver Toronto Western Canada 2007 Western Canada 2008 CTTC Domestic National SMARI Benchmark

Aware 69% 66% 68% 57% 73% 68%

Aware HHs 365,972 333,180 705,245 1,396,500

Cost Per Aware $0.63 $0.60 $0.53 $0.27

$0.39 $0.50 Strategic Marketing & Research, Inc.

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2008 International Advertising

Detailed Phase 2 Findings

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2008 International Advertising

Overall Travel • California captures a fair percentage of travel from the Canadian markets targeted by the advertising. But it is the incremental travel and not overall travel that is used to determine the economic impact of the campaign. • As might be expected, the level of travel from the closer markets is much higher. But the size of Toronto makes it an important market. Overall Level of Travel to California Calvary Edmonton Vancouver Toronto

27% 36% 32% 9%

137,000 190,000 332,000 220,000

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2008 International Advertising

Incremental Travel • The incremental travel is the difference in the level of travel to California between those aware and not aware of the advertising. Vancouver shows the greatest incremental travel among these markets. Although it had the highest overall travel, Edmonton has no incremental travel.

Incremental Travel by Market Incremental Ad Aware Not Aware Travel Calvary 22.6% 20.8% 1.7% Edmonton 28.1% 38.9% 0.0% Vancouver 31.0% 22.9% 8.1% Toronto 8.5% 8.1% 0.4%

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2008 International Advertising

Incremental Travel • Those who mention that they are already planning a trip to California are considered in the economic impact in a similar fashion to those who have already traveled. Here again, Vancouver has the greatest increment between those aware and not aware of the advertising while Edmonton shows none.

Potential Additional Incremental Travel Incremental Ad Aware Not Aware Travel Calvary 7.1% 4.1% 3.0% Edmonton 9.5% 11.1% 0.0% Vancouver 8.3% 4.2% 4.1% Toronto 4.1% 2.5% 1.6%

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2008 International Advertising

Incremental Travel • When both travel increments are applied to Canadians who are U.S. travelers and were exposed to the California advertising, we see the number of trips impacted by the campaign. The projected trips are first discounted to 80%* to account for those who will not actually follow through on their plans to visit California.

Incremental and Projected Trips by Market Additional Incremental Trips Projected Trips Calvary 6,323 8,772 Edmonton 0 0 Vancouver 57,297 22,947 Toronto 5,261 17,503

* Previously conducted research indicates that 80% of those planning a trip will actually visit California. Strategic Marketing & Research, Inc.

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2008 International Advertising

Incremental Travel • The 2007 campaign included three cities in western Canada, while 2008 included Toronto as well. The 2008 campaign resulted in many more trips than 2007 when comparing the same markets, and even more trips when Toronto is included. Incremental and Projected Trips Overall Comparison

Western Canada 2007 Western Canada 2008 Overall 2008

Incremental Trips 10,023 63,620 68,881

Additional Projected Trips 29,225 31,719 49,222

Strategic Marketing & Research, Inc.

Total 38,248 95,339 118,103

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2008 International Advertising

Trip Expenditures • After calculating the number of trips, trip spending is applied to get the economic impact. As shown, spending among ad aware visitors is higher than among those not aware. Trip Expenditures

Lodging Meals/Food Entertainment/Attractions Shopping Other Entertainment Transportation Other Total

Not Aware Ad Aware $889 $817 $457 $504 $313 $414 $398 $557 $119 $118 $782 $933 $115 $159 $3,073 $3,503

Strategic Marketing & Research, Inc.

Total $842 $488 $380 $504 $118 $882 $144 $3,358

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2008 International Advertising

Economic Impact and ROI • After multiplying trip expenditures by the number of influenced trips, the economic impact is $241 million, and projects to $414 million when additional future trips are included. Vancouver had the greatest incremental travel among the markets and the greatest economic impact. $500

Economic Impact by Market and Overall

$414

Millions

$400 $281

$300 $200 $100

$241

$201

$22

$80

$53

$18

$0 Calgary

Vancouver

Without Projected Trips

Toronto

Overall 2008

With Projected Trips

Note: Edmonton had no incremental travel or incremental projected trips, and therefore no economic impact. Strategic Marketing & Research, Inc.

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2008 International Advertising

Economic Impact and ROI • The total economic impact of the 2008 campaign is much greater than 2007, both with and without projected trips or Toronto. $500

Economic Impact Overall Comparison

Millions

$400

$414

$334

$300

$241

$223

$200 $100

$99 $25

$0 Western Canada 2007

Western Canada 2008

Without Projected Trips

Overall 2008

With Projected Trips

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2008 International Advertising

Economic Impact and ROI • Once the economic impact is determined, it is divided by the advertising expenditures to arrive at the return on investment. The result for the campaign as a whole is $205 returned for every $1 spent on advertising. When the projected trips are included, the result increases 70% to $351. ROI by Market and Overall No With Projected Trips Projected Trips Calgary Vancouver Toronto Overall 2008

$96

$229

$542

$759

$49

$212

$205

$351

Note: Edmonton had no incremental travel or incremental projected trips, and therefore no economic impact or ROI. Strategic Marketing & Research, Inc.

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2008 International Advertising

Economic Impact and ROI • Comparing the same markets between the 2007 and 2008 campaigns, the 2008 return is eight times higher. When projected trips are included, the result is more than three times higher. Cumulative impact of the adveritsing took time to have an impact, and was much more effective in the second year.

ROI Overall Comparison No With Projected Trips Projected Trips Western Canada 2007

$32

$126

Western Canada 2008

$278

$417

Overall 2008

$205

$351

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2008 International Advertising

Economic Impact and ROI • From the economic impact, the tax rate is applied to provide the total tax revenue generated from trips influenced by the advertising. Even with no impact in Edmonton, the other markets generated more than $15 million in tax revenue. Tax Revenue by Market and Overall

Calgary Vancouver Toronto Overall 2008

No Projected Trips $1,433,115 $12,987,156 $1,192,510 $15,612,781

With Projected Trips $3,421,330 $18,188,377 $5,159,853 $26,769,559

Note: Edmonton had no incremental travel or incremental projected trips, and therefore no economic impact or ROI. Note: Tax rate used was 6.38% Strategic Marketing & Research, Inc.

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2008 International Advertising

Economic Impact and ROI • The 2008 campaign in total generated more than $15 million in tax revenue, and is projected to reach almost $27 million when additional trips are included. Comparing just the Western Canada markets (without Toronto), 2008 far exceeds the impact of 2007. Tax Revenue Overall Comparison

Western Canada 2007

No Projected With Projected Trips Trips $1,643,917 $6,437,077

Western Canada 2008

$14,424,387

$21,609,706

Overall 2008

$15,612,781

$26,769,559

Note: Tax rate used was 6.38% in 2008, and 6.47% in 2007. Strategic Marketing & Research, Inc.

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2008 International Advertising

Economic Impact and ROI • Vancouver had much greater incremental travel than the other markets, which resulted in greater economic impact and tax revenues. The advertising budget was 60% greater than Calgary, but still allowed for the highest tax ROI among the 2008 markets. Tax ROI by Market and Overall No Projected Trips Calgary Vancouver Toronto Overall 2008

$6 $35 $3 $13

With Projected Trips $15 $48 $14 $22

Note: Edmonton had no incremental travel or incremental projected trips, and therefore no economic impact or ROI. Note: Tax rate used was 6.47% Strategic Marketing & Research, Inc.

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2008 International Advertising

Economic Impact and ROI • Once again, the tax ROI in 2008 far exceeds that of 2007, both with and without projected trips. Tax ROI Overall Comparison No Projected Trips

With Projected Trips

Western Canada 2007

$2

$8

Western Canada 2008 Overall 2008

$18 $13

$27 $22

Note: Tax rate used was 6.47% Strategic Marketing & Research, Inc.

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2008 International Advertising

Individual Market Analysis

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2008 International Advertising

Calgary: States Visited in 2008

Within the market, California is as popular a destination as Nevada. While Los Angeles and San Francisco were the most frequently visited cities, Palm Springs was chosen more often by these travelers than by visitors from other markets. % Visiting

Share of Trips

Nevada

29%

20%

Los Angeles

46%

99

California

27%

19%

San Francisco

31%

87

Washington

16%

13%

Florida

15%

10%

Anaheim/ Orange County

21%

81

New York

13%

9%

San Diego

21%

90

Oregon

8%

6%

Palm Springs

21%

118

Utah

8%

7%

Sacramento

3%

52

Hawaii

8%

5%

Monterey

3%

62

Arizona

8%

6%

San Jose

2%

103

Texas

4%

4%

Lake Tahoe

2%

29

Colorado

4%

2%

Other

8%

None of these states

18%

California Cities % Visited Visiting

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Index

27

2008 International Advertising

Calgary:

The details of a California trip from Calgary visitors is fairly typical. The market does slightly more “family” trips, and fewer “couple” trips as compared to other markets. Also, trip spending is lower among this group than other markets. Top 2 Box Rating Motivation for Choosing California

California Trip Specifics People on trip

2.9

Children under 18 on trip

0.5

Travel party was "couple"

45%

Travel party was "family with kids"

30%

Nights spent

6.7

Drove to California

26%

Flew to California

74%

Used paid accommodations

85%

Stayed with friends or family

28%

Average trip expenditures

$3,020

Going somewhere with better weather

66%

Visiting a specific attraction or event

57%

Seeing something new and different

56%

Returning somewhere familiar that you enjoy

38%

Visiting friends and relatives

28%

Season of California Visit Spring

36%

Summer

23%

Winter

21%

Fall

20%

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2008 International Advertising

Calgary:

The table below shows the most frequently mentioned activities that California visitors participated in as part of their trip. From these activities, they were asked which were motivators for the trip. The indexes show the difference compared to the average response across the four markets. Among Calgary visitors, fine dining, natural scenery, and historical sites had strong participation and higher than average motivation. Participated

Participate Index

Motivated

Motivate Index

Fine dining or eating at a unique local restaurant

69%

107

20%

131

Shopping

62%

90

20%

92

Viewing and enjoying natural scenery such as mountains, oceans, etc.

52%

99

21%

117

Driving on scenic byways or roads

46%

110

10%

82

Visiting a theme or amusement park

44%

98

25%

88

Entertainment and nightlife

41%

103

8%

98

Go sightseeing or take tours

36%

85

16%

92

Going to the beach

34%

92

16%

96

Visit historical sites

30%

91

10%

203

Experiencing the unique culture of the area

30%

103

10%

96

Arts activities such as museums, theater performances

21%

89

10%

143

Calgary Market

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2008 International Advertising

Edmonton: States Visited in 2008

Within the Edmonton market, California and Nevada were the most frequently visited states. While Los Angeles was the most popular city visited, Orange County was also very popular, and was chosen more often than by visitors from other markets.

% Visiting

Share of Trips

California

36%

23%

Nevada

33%

20%

Washington

19%

11%

Arizona

18%

10%

Utah

13%

8%

New York

12%

7%

Florida

11%

6%

Oregon

9%

5%

Hawaii

8%

4%

Texas

4%

4%

Colorado

1%

1%

None of these states

8%

California Cities % Visited Visiting Los Angeles 45%

Index 98

Anaheim/ Orange County

36%

137

San Diego

28%

119

San Francisco

28%

78

Palm Springs

11%

61

Sacramento

3%

49

San Jose

2%

98

Monterey

0%

0

Lake Tahoe

0%

0

Other

19%

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2008 International Advertising

Edmonton:

California trips made by Edmonton consumers report slightly longer durations and less often include a stay with friends or family. This likely contributes to the greater trip expenditures reported. These visitors were equally likely to travel to California in the summer or spring.

California Trip Specifics

Motivation for Choosing California

People on trip

2.6

Children under 18 on trip

0.7

Travel party was "couple"

52%

Travel party was "family with kids"

27%

Nights spent

8.0

Drove to California

27%

Flew to California

73%

Season of California Visit

Used paid accommodations

84%

Spring

33%

Stayed with friends or family

20%

Summer

33%

Winter

22%

Fall

13%

Average trip expenditures

$3,779

Top 2 Box Rating

Going somewhere with better weather

69%

Seeing something new and different

63%

Visiting a specific attraction or event

58%

Returning somewhere familiar that you enjoy

41%

Visiting friends and relatives

30%

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2008 International Advertising

Edmonton:

Some of the top activities Edmonton visitors reported participating in are provided below. Amusement parks, gambling, and golf had higher than average participation and were stronger motivators among these visitors than average. Nightlife interestingly was not higher than average for participation, but was higher for motivating a California trip. Participated

Participate Index

Motivated

Motivate Index

Shopping

69%

99

22%

102

Visiting a theme or amusement park

58%

128

41%

146

Fine dining or eating at a unique local restaurant

50%

78

8%

52

Viewing and enjoying natural scenery such as mountains, oceans, etc.

42%

79

13%

69

Go sightseeing or take tours

39%

92

14%

79

Going to the beach

34%

92

17%

101

Visit historical sites

30%

92

3%

65

Entertainment and nightlife

25%

63

13%

150

Visiting a winery

19%

130

3%

68

Gambling

17%

125

5%

114

Golf

16%

123

8%

123

Edmonton Market

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2008 International Advertising

Vancouver: States Visited in 2008

Washington was the most popular state destination. But California exceeded Nevada and Oregon in percent visiting the state and share of trips. While Los Angeles and San Francisco were the most frequently visited cities, Sacramento was chosen more often by these travelers than by visitors from other markets.

% Visiting

Share of Trips

Washington

66%

53%

California Cities % Visited Visiting Los Angeles 40%

California

32%

13%

San Francisco

34%

95

Nevada

23%

9%

29%

110

Oregon

23%

10%

Anaheim/ Orange County

Hawaii

9%

3%

San Diego

23%

99

Florida

8%

3%

Palm Springs

21%

118

Arizona

7%

2%

Sacramento

10%

151

New York

6%

3%

Monterey

5%

101

Colorado

3%

1%

San Jose

3%

200

Utah

2%

1%

Lake Tahoe

2%

38

Texas

2%

1%

Other

11%

None of these states

4% Strategic Marketing & Research, Inc.

Index 88

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2008 International Advertising

Vancouver:

In addition to escaping the weather, Vancouver residents were motivated to visit California by a specific attraction or event. This may contribute to their slightly greater propensity for using paid accommodations.

California Trip Specifics

Motivation for Choosing California

People on trip

2.6

Children under 18 on trip

0.4

Travel party was "couple"

54%

Travel party was "family with kids"

22%

Nights spent

6.6

Drove to California

24%

Flew to California

71%

Used paid accommodations

91%

Spring

24%

Stayed with friends or family

20%

Summer

34%

Winter

17%

Fall

24%

Average trip expenditures

$3,181

Top 2 Box Rating

Visiting a specific attraction or event

68%

Going somewhere with better weather

67%

Seeing something new and different

61%

Returning somewhere familiar that you enjoy

46%

Visiting friends and relatives

26%

Season of California Visit

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2008 International Advertising

Vancouver:

The Vancouver market seems to have dichotomous interests. While they are motivated to visit California by wineries and gambling, they also mention activities for children and visiting small towns as motivators. This group also has a high level of interest in shopping as both an activity and a trip motivator. Participate Motivate Participated Index Motivated Index

Vancouver Market Shopping

81%

117

29%

134

Fine dining or eating at a unique local restaurant

73%

114

11%

71

Viewing and enjoying natural scenery such as mountains, oceans, etc.

59%

110

17%

94

Entertainment and nightlife

47%

117

10%

115

Driving on scenic byways or roads

44%

104

15%

124

Visit historical sites

30%

92

6%

132

Visiting small towns and rural areas

28%

116

6%

145

Visiting a national or state park

24%

101

9%

123

Arts activities such as museums, theater performances

23%

97

2%

31

Visiting a winery

18%

126

7%

161

Visiting activities that are fun for children

17%

139

6%

133

Gambling

17%

123

5%

130

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2008 International Advertising

Toronto: States Visited in 2008

Being farthest from California, the Toronto market is much more likely to visit New York or Florida. However, when visiting California, these travelers are much more likely than visitors from other markets to include Lake Tahoe or Monterey in their trip. % Visiting

Share of Trips

New York

48%

48%

Florida

34%

23%

Nevada

15%

9%

California

9%

7%

Texas

5%

4%

Arizona

5%

3%

Washington

4%

Hawaii

California Cities % Visited Visiting

Index

Los Angeles

53%

115

San Francisco

50%

140

San Diego

22%

92

Palm Springs

19%

104

Lake Tahoe

19%

333

2%

Anaheim/ Orange County

19%

72

3%

2%

Monterey

13%

237

Colorado

2%

1%

Sacramento

9%

148

Oregon

1%

1%

San Jose

0%

0

Utah

1%

0%

Other

0%

None of these states

14% Strategic Marketing & Research, Inc.

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2008 International Advertising

Toronto:

As compared to other markets, Toronto visitors do not go to California for better weather, as they likely visit Florida for that reason. Rather, it is the novelty of the state for these travelers which attracts them. They are also more likely than those in other markets to be visiting family in the state.

California Trip Specifics

Motivation for Choosing California

People on trip

2.3

Children under 18 on trip

0.3

Travel party was "couple"

52%

Travel party was "family with kids"

24%

Nights spent

7.2

Drove to California

6%

Flew to California

94%

Used paid accommodations

88%

Stayed with friends or family

25%

Average trip expenditures

$3,571

Top 2 Box Rating

Seeing something new and different

63%

Visiting a specific attraction or event

53%

Going somewhere with better weather

50%

Returning somewhere familiar that you enjoy

50%

Visiting friends and relatives

44%

Season of California Visit Spring

38%

Summer

25%

Winter

16%

Fall

22%

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2008 International Advertising

Toronto:

Visitors from Toronto report a high level of participation in a variety of activities. In addition, they indicate many of these activities also are important influences in choosing California as their U.S. destination. When compared to average across the four markets, sightseeing tours, experiencing area culture, fine arts activities, and spa visits are popular activities and strong motivators. Participate Motivate Participated Index Motivated Index

Toronto Market Fine dining or eating at a unique local restaurant

66%

102

22%

146

Viewing and enjoying natural scenery such as mountains, oceans, etc.

59%

112

22%

120

Go sightseeing or take tours

56%

133

28%

158

Driving on scenic byways or roads

50%

119

16%

130

Going to the beach

47%

125

22%

128

Experiencing the unique culture of the area

41%

142

16%

153

Arts activities such as museums, theater performances

38%

156

13%

181

Visiting a national or state park

34%

141

9%

136

Visiting a spa

22%

201

3%

400

Hiking or camping

19%

198

0%

0

Visiting a winery

13%

87

6%

135

Watching sporting events

13%

96

6%

226

Strategic Marketing & Research, Inc.

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2008 International Advertising

Conclusions & Recommendations • The economic impact of the 2008 campaign rose to $250 million versus $25 million in 2007. Since a large portion of trips to California take place during the fall and winter, including incremental travel among those who are “already planning” a trip to California accounts for influenced trips yet to be taken, and further increases the impact to $413.7 million (compared to $99.5 million in 2007). • While part of the major increase is due to the fact that CTTC began advertising in Toronto in 2008, there was also a major increase in incremental travel and economic impact among the three Western Canadian markets that were the same both years – from $99.t million to $334 million. • The tax ROI for this effort grew from $8 to $22 this year. This ROI is similar to that achieved by CTTC’s domestic advertising efforts. • Although advertising awareness was lower overall in 2008, the increased travel increment may suggest a residual impact from the advertising. Over time, exposure to California advertising may build awareness and consideration of California as part of the competitive set for U.S. travel destinations among these Canadian visitors. • Vancouver failed to produce a travel increment in 2007, but had the greatest increment in 2008. A large increment in a large market pushed the return on advertising investment far over that of 2007. Calgary remains a good producer, but Edmonton did not produce incremental travel. This is probably because the level of travel from that market is already higher than the other Western markets. Strategic Marketing & Research, Inc.

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Conclusions & Recommendations • The size of the Toronto market is twice that of Vancouver and this means that even a small travel increment can result in large economic impact. This year was the first year CTTC advertised in Toronto, and the advertising worked. The results from the other markets indicate that the impact in Toronto should be even stronger next year. • The Toronto market, being farthest from California and closer to Florida, is motivated to visit California by the offer of something new and different, and less so because of better weather.  The Edmonton market indicates high visitation to Orange County and a greater likelihood to visit amusement parks. Given the high level of overall visitation and lack of incremental visitation from this market, it may be hard to generate additional visitation if people are largely attracted by wellknown amusement parks.  Trips from the Vancouver market seem to include both family oriented and adult oriented trips. For the adult trips activities such as wineries and nightlife are popular. The key is convincing this market to bypass the nearer US markets (Washington and Oregon) and convincing them to come to California.  The Calgary market had the lowest spending and a greater percentage of trips described as “family trips.” This group was more inclined to visit historical places or enjoy the natural scenery. Palm Springs was visited more often than average by this group.

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Appendix

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2008 International Advertising

Calculations WITHOUT Projected Trips Market

Western Western Overall 2008 Canada 2008 Canada 2007

Calgary

Edmonton

Vancouver

Toronto

Population Level of U.S. Travel

1,079,310 49%

1,034,945 49%

2,116,581 49%

5,000,000 49%

9,230,836 49%

4,230,836 49%

4,230,836 49%

U.S. Visitors Ad Recall Ad Aware U.S. Travelers Incremental Travel

528,862 69.2%

507,123 65.7%

1,037,125 68.0%

2,450,000 57.0%

4,523,110 61.9%

2,073,110 67.7%

2,073,110 73.2%

365,972 1.7%

333,180 NA

705,245 8.1%

1,396,500 0.4%

2,800,897 2.5%

1,404,397 4.5%

1,517,516 0.7%

Incremental Trips

6,323

NA

57,297

5,261

68,881

63,620

10,023

Incremental Trips

Economic Impact Incremental Trips Average Trip Expenditures

6,323

NA

57,297

5,261

68,881

63,620

10,023

$3,503

$3,503

$3,503

$3,503

$3,503

$3,503

$2,535

Economic Impact

$22,150,152

NA

$200,728,844 $18,431,370 $241,310,366 $222,942,616 $25,408,305

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Calculations WITHOUT Projected Trips Calgary

Edmonton

Vancouver

Toronto

Overall 2008

Western Canada 2008

Western Canada 2007

Return on Investment Economic Impact

$22,150,152

NA

$200,728,844

$18,431,370

$241,310,366

$222,942,616

$25,408,305

Campaign Expenditures

$230,834

$199,871

$370,285

$376,284

$1,177,274

$800,990

$789,000

$96

$0

$542

$49

$205

$278

$32

Incremental Trips

6,323

NA

57,297

5,261

68,881

63,620

10,023

Average Trip Expenditures

$3,503

$3,503

$3,503

$3,503

$3,503

$3,504

$2,535

Economic Impact

$22,150,152

NA

$200,728,844

$18,431,370

$241,310,366

$222,942,616

$25,408,305

Tax Revenue (6.38%)

$1,413,180

NA

$12,806,500

$1,175,921

$15,395,601

$14,223,739

$1,643,917

$230,834

$199,871

$370,285

$376,284

$1,177,274

$800,990

$789,000

$6

NA

$35

$3

$13

$18

$2

Market

ROI General Fund ROI

Campaign Expenditures ROI

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Calculations WITH Projected Trips Market

Western Overall 2008 Canada 2008

Western Canada 2007

Calgary

Edmonton

Vancouver

Toronto

3.0%

NA

4.1%

1.6%

2.2%

2.8%

2.4%

80.0%

80.0%

80.0%

80.0%

80.0%

80.0%

80.0%

2.4%

NA

3.3%

1.3%

1.8%

2.3%

1.9%

365,972

333,180

705,245

1,396,500

2,800,897

1,404,397

1,517,516

8,772

NA

22,947

17,503

49,222

31,719

29,225

15,094

NA

80,244

22,765

118,103

95,339

39,247

$3,503

$3,503

$3,503

$3,503

$3,503

$3,503

$2,535

$52,879,900

NA

Projected Incremental Trips Additional Potential Incremental Travel Discount for potential travel Projected Additional Incremental Travel Ad Aware U.S. Travelers Projected Additional Trips

Economic Impact Total Incremental Trips (with projections) Average Trip Expenditures Economic Impact

$281,118,653 $79,750,426 $413,748,979 $333,998,552

Strategic Marketing & Research, Inc.

$99,491,145

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2008 International Advertising

Calculations WITH Projected Trips Market

Calgary

Edmonton Vancouver

Toronto

Western Western Overall 2008 Canada 2008 Canada 2007

Return on Investment Economic Impact Campaign Expenditures ROI

$52,879,900

NA

$281,118,653$79,750,426$413,748,979 $333,998,552

$99,491,145

$230,834 $229

$199,871 $0

$370,285 $759

$376,284 $212

$1,177,274 $351

$800,990 $417

$789,000 $126

15,094

NA

80,244

22,765

118,103

95,339

39,247

General Fund ROI Total Incremental Trips (with projections)

Average Trip Expenditures $3,503 $3,503 $3,503 $3,503 $3,503 $3,503 $281,118,653$79,750,426$413,748,979 $333,998,552 Economic Impact $52,879,900 NA Tax Revenue (6.38%) $3,373,738 NA $17,935,370 $5,088,077 $26,397,185 $21,309,108 Campaign Expenditures $230,834 $199,871 $370,285 $376,284 $1,177,274 $800,990 ROI $15 NA $48 $14 $22 $27

Strategic Marketing & Research, Inc.

$2,535 $99,491,145 $6,467,227 $789,000 $8

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