Phila. could learn promotion efficiency from Chicago

Souvenir magnets at the Willis Tower in Chicago show the city's tourist attractions. Local officials say merging the two promotion agencies has saved money that can be spent on outreach.
Souvenir magnets at the Willis Tower in Chicago show the city's tourist attractions. Local officials say merging the two promotion agencies has saved money that can be spent on outreach. (Bloomberg)
Posted: March 19, 2014

When Chicago Mayor Rahm Emanuel took office in 2011, he was confronted by what he saw as a dysfunctional and inefficient system for promoting the city.

In place - as there is now in Philadelphia - were two marketing agencies, one to bring conventions to Chicago, the other to woo leisure tourists.

Emanuel's solution: Merge them. The result: a reduction in overlapping staff and operational expenses that has created $2 million in annual savings. "The mayor's approach was to have a unified brand for Chicago," said David Spielfogel, senior adviser to the mayor, "and use every dollar saved in marketing the city."

Chicago's experience could be instructive, given the long-running debate over whether Philadelphia's current marketing structure is best for the region.

At present, Philadelphia is served by the Philadelphia Convention and Visitors Bureau (PHLCVB), the nonprofit marketing arm of the Convention Center, and Visit Philadelphia, formerly the Greater Philadelphia Tourism Marketing Corp., a nonprofit established in 1996 to lure tourists.

The two tax-supported agencies have an 18-year history of friction and less collaboration than desired. They maintain separate staffs, websites, even promotional slogans for the city.

That is much as it was in Chicago three years ago. At that time, the Chicago Convention and Tourism Bureau was tasked with luring conventions and the Chicago Office of Tourism and Culture was assigned leisure tourists. They, too, maintained separate staffs and websites.

"It was an outdated, antiquated model that I never understood," said Don Welsh, chief executive officer of Choose Chicago, the city's new, streamlined marketing agency. "A lot of times, though, something is so ingrained in a city that it is just how you do things."

In this instance, he said, it took a new mayor and a future candidate for governor to change it.

The setup was first questioned by Bruce Rauner, an investment banker who was chairman of the Chicago Convention and Tourism Bureau and now is a Republican candidate for Illinois governor.

"Just from a business standpoint, he was a little taken aback," Welsh said. "How can you have these multiple organizations? It did not make financial sense."

Rauner found a sympathetic ear in Emanuel, who pressed for a change. A six-month study of marketing practices nationwide identified Chicago as an outlier, like Philadelphia, in its reliance on two agencies.

(The study praised some of Philadelphia's efforts, including Visit Philadelphia's marketing campaigns and PHLCVB efforts at international sales.)

The study recommended a single entity. Choose Chicago was the result, with Welsh selected to run it. The new organization has 88 full-time employees, down from the 140 staffers employed before the merger.

Welsh said he is paid "in the $400,000 range" to manage Choose Chicago, which has an annual budget of $27 million.

(In Philadelphia, PHLCVB has a $17 million budget and about 60 employees. Its chief executive officer, Jack Ferguson, had a compensation package of $356,471 in 2012, according to PHLCVB's most recent IRS filings. Visit Philadelphia has a $12 million budget and about 48 employees. Its chief executive, Meryl Levitz, had a compensation package of $424,982 in 2012, according to tax files.)

The changes in Chicago also created a more unified and accountable marketing operation.

The chair of the Choose Chicago board is appointed by the mayor. The board's executive committee serves at the pleasure of the chair. As a result, the mayor has control and oversight of marketing in Chicago.

"We believe very strongly that agencies we run, we should be held accountable for," Spielfogel said. "The structure of Choose Chicago certainly makes the mayor accountable."

In Philadelphia, the mayor is represented on the board of each marketing organization, but is just one voice among many. PHLCVB and Visit Philadelphia share many board members, but ultimately are independent of each other and of any overarching management entity. That independence and lack of broader oversight has contributed to conflicts over the years.

It also means Mayor Nutter cannot do what Emanuel has done: set measurable goals for his tourism team.

Emanuel has told Welsh he wants Chicago to raise its annual influx of tourists from a current 48 million to 55 million by 2020. Welsh was also asked to move Chicago from No. 10 to No. 5 in the nation for international tourists.

"I don't think with separate organizations you can have these types of goals," Welsh said. "I think it is hard to hold multiple organizations accountable. I don't know how you would maintain the integrity of the brand when you have two separate organizations."

Michelle Boone, Chicago's commissioner for cultural affairs, says the change has been a boost all around.

"It is really about having one unified voice in terms of the identity of the city," she said. "It enables us to be very clear with the audiences we are targeting, regionally, nationally and internationally.


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