KELO-TV reports that the Department of Tourism has released its big new deals to attract visitors to South Dakota. All four contracts go to out-of-state companies:
After a competitive request for proposals (RFP) process, the South Dakota Department of Tourism has chosen to partner with four advertising and public relations firms beginning July 1, 2022. The following four agencies have been selected as part of the RFP process:
- Karsh Hagan for creative branding, traditional and digital media and activations
- communication of love to facilitate cooperative marketing strategy and consumer insights
- Lou Hammond Group for public relations
- two by four for social media, email marketing and website development
…The duration of each contract is three years, with the possibility of two (2) one-year renewals [SD Department of Tourism, press release, 2022.05.19].
Karsh Hagen is a Denver company. Love’s HQ is in Salt Lake City. LHG is based in New York and has offices in Atlanta, Charleston, Denver, Houston and Tampa. Two by Four works in Chicago.
Rapid City marketer Robert Sharp told KEVN-TV he finds (in the reporter’s words) “baffling that the state can’t find marketing talent within its own borders to promote what South Dakota has to offer”. But According to Senator Linda Duba (D-15/Sioux Falls), the state hasn’t generated much interest in the state: Only one South Dakota company responded to RFP #2475, the current contract holder Lawrence and Schiller of Sioux Falls.
This isn’t the first time the state has contracted outside companies to market South Dakota’s tourism opportunities. When the state last offered its top tourism marketing jobs in 2017, it selected three companies out of ten applicants. Three South Dakota companies applied; one, Lawrence and Schiller, were chosen, along with MMGY Global of Kansas City, Missouri, and Miles Partnership of Lakewood, Colorado.
Contract amounts for Lawrence and Schiller rose from $4,885,750 in fiscal year 2018 to $5,000,000 this fiscal year, but federal coronavirus relief funds increased the amount of the fiscal year 2021 at $16,900,000. MMGY’s contract went from $4,615,000 in year one to $4,400,000 in years two and three, and up to $4,770,000 last year, with the coronavirus increase to $8,084,275 the last year. Miles’ contract was relatively small: $400,000 a year for five years, except for fiscal year 2021, when CRF increased its take to $425,000.
Lawrence and Schiller have many other state contracts – Public Safety, Labor and Regulatory, Board of Regents, Governor’s Office of Economic Development… – but none of them are the eight-figure, multi-year deals that are tourist contracts. Lawrence and Schiller’s only current seven-figure state contract is this five-year, $6,050,000 contract with Public Safety to remind us not to jerk off and drive en route to death on Mars.
You could argue that the best people to tell the world what’s so great about South Dakota are the people who love it enough to live here every day. But here again, our market is people from elsewhere. These people may be looking for different things than what South Dakotans would expect or grasp. Perhaps people outside of South Dakota can better understand the mindset of tourists elsewhere and help them connect those diverse desires with what they can find in South Dakota. The Ministry of Tourism has taken this outside eyes approach with half of its marketing budget over the past five years; we’ll see what happens starting next July when they hand over full responsibility for South Dakota tourism advertising to outside eyes.
Related Economic Calculation: Hiring out-of-state businesses, like Governor Kristi Noem did to tell the world that South Dakota is on meth, exports some of our taxes and robs us of the opportunity to use our own advertising spend to boost local businesses on Phillips Avenue and around the Main Street Plaza. But an advertising ROI study commissioned by SD Tourism from Longwoods International claims that the $4.3 million South Dakota spent on an advertising campaign in 2018 generated 1.3 million trips, $176 million in visitor spending and $13.2 million in state and local taxes. So every advertising dollar, even if sent to New York, can bring in $3 in taxes and $41 in commercial activity.