For all its images of scenic rivers, brooks and waterfalls, the most striking new feature on the state’s overhauled tourism website may be a revenue stream.
The Arkansas Department of Parks & Tourism is for the first time selling advertising on the site, Arkansas.com, and it is promoting the ads aggressively to travel businesses and tourism organizations.
The new website had its official debut last week, and in another first, the site and its venerable print counterpart, the Arkansas Travel Guide, are being handled by the same advertising agency, CJRW of Little Rock.
The state’s cooperative advertising plan for the site, which was produced by digital subcontractor Miles Partnership LLLP of Sarasota, Florida, has generated enthusiasm but also some concerns about fairness to companies that can’t afford to advertise online.
Promotional content on the site has been free through its two-decade history.
Arkansas Parks & Tourism Department Director Kane Webb said the renovated site will still offer free listings for all hotels, restaurants and other attractions, and he said he’d heard no industry complaints since the site was quietly launched in late July.
“So far, so good,” Webb told Arkansas Business last week.
Joe Jacobs, his marketing and revenue manager for Arkansas State Parks, echoed the thought. “I haven’t heard a single bad thing from the people who are actually using the sites,” he said, referring to Arkansas.com and the state park system’s separate but also revamped site, ArkansasStateParks.com.
Arkansas.com missed its launching goal of the end of last year, but Webb said that tentative date was unrealistic in the face of rebuilding a 30,000-page web behemoth.
He and CJRW CEO Darin Gray were clearly pleased with their project last week, showing off the site’s user-friendly features and enhanced imagery from Parks & Tourism’s vast film archive and from visitors who posted snapshots on social media sites like Instagram.
$7.6 Billion Industry
The website’s redesign mission was to sweep out old data, install new technology and give a renewed jolt to the $7.6 billion tourism economy in Arkansas.
Webb also wanted a laser focus on digital marketing, which some observers say suffered when digital and “traditional” marketing chores were handled by different ad firms. “For a long time, digital advertising was seen by the marketing teams as a passing fad, like the CB radio craze,” one former state official said. Webb was determined to end that mindset.
Decades of marketing by CJRW, not to mention 20 years of groundbreaking internet development by previous digital partner Aristotle Inc. of Little Rock, helped grow tourism into the state’s second-largest industry, after agriculture. The state’s pitch relied heavily on parks and “Natural State” attractions like fishing holes, rivers, trails, mountains and forests.
Some 29 million visitors spent money in Arkansas in 2017, the state says, thanks in part to a $7.1 million annual media marketing budget and 4.2 million visits to the Arkansas.com site.
Parks & Tourism awarded CJRW a fiercely competitive $15.2 million-a-year ad contract last year, the state government’s richest marketing account. Under the previous contract, the work was split with Aristotle, which had a $1.4 million annual contract with the state.
Now CJRW is shouldering unspecified upfront costs for the site relaunch and will reap all the ad revenue until those costs are repaid, officials said. Afterward, CJRW and Miles, the Florida firm, will not receive a commission for the digital cooperative feature, Webb said, though some proceeds will pay for running and refining the sites.
Webb did not directly answer questions about how much CJRW is owed or when the online advertising proceeds will likely repay the debt. The overall contract calls for CJRW to reap a 13 percent media commission for ad placement, which amounts to $923,000 per year under the $7.1 million in paid media program allotted from the $15.2 million contract. Arkansas also budgeted about $610,000 to get the new sites up and running.
Ad deals on the new Arkansas.com include placement packages and website-generated leads at rates that Gray called “substantially less than what that marketing would cost on traditional sites like Expedia.” A featured business listing on Arkansas.com will go for $995 a year.
Webb, who made the tourism site renovation a chief priority immediately after he was hired by Gov. Asa Hutchinson nearly three years ago, explained the arrangement. “All aspects of website development are managed under the CJRW master contract, and they work with Miles as a vendor/subcontractor,” Webb said. “The funds generated from the new digital cooperative efforts will be used to optimize and promote the site as well as maintain and manage all aspects of Arkansas.com and ArkansasStateParks.com.
“The intent is to make the digital cooperative plan self-supportive, and any money beyond that will go toward marketing and promoting Arkansas, which is what the department and CJRW are charged with.”
CJRW’s contract covers a maximum of seven years, rolling over annually with approval of the State Parks, Recreation & Travel Commission, which endorsed the website renovation and its new advertising. The contract, already in its second year, derives $13.2 million a year (87 percent) from the 2 percent state tax on things like hotel room and canoe rentals, campground fees and amusement park admissions.
Other funding sources are $1.4 million from the state for advertising the parks system and $617,888 in general revenue dollars. Webb pointed out that the 2 percent tax was established for the express purpose of promoting tourism.
Proceeds from the tax, which the state sees as a surefire measure of marketing success, have risen from about $10.4 million in 2006 to well over $15 million last year. Revenue for 2017 was up about 4 percent.
Regional tourism officials and some travel businesses have hailed the new ad opportunities. Russ Jester of the Fort Smith Convention & Visitors Bureau said that for “a local tourism bureau, there really isn’t a better digital investment to be made.” Bill Ott, director of marketing for the 1886 Crescent Hotel & Spa in Eureka Springs, told Talk Business & Politics that the hotel has long advertised in the print Travel Guide and “wouldn’t think of a marketing plan without including this.”
Promotional literature features banner advertising, native ads and lead-generation packages, as well as featured articles and videos that go for $2,500 and $10,000 each, respectively.
Grumbles arose after the state sold out a limited run of $5,000 video ad spots on Arkansas.com, locking out some potential advertisers. The pilot videos were created by Waymack & Crew, the production company directly across Main Street from CJRW and a favored agency partner.
“There’s nothing wrong or improper about the website’s co-op approach,” said one industry insider with a long history with Parks & Tourism marketing, countering several marketing pros and former state officials who questioned the selling of advertising on a state-subsidized website.
“It may be good business for the state and for CJRW and Miles,” the insider said, speaking on the condition of anonymity. “But people should be reminded of how what used to be a free taxpayer-subsidized resource is now another profit center. We [as taxpayers] paid for all that extra web design.”
Webb responded by saying “the industry wanted this, and some businesses specifically asked for it.”
Aristotle Interactive President Jennifer Peper agreed that there is nothing inherently unsuitable about what she called a “pay to play” advertising model, “provided that resources are not being diverted from non-advertising partners.”
“In 2016, which is the last year Aristotle was responsible for the website, 6.1 million visitors came to Arkansas.com, an increase over the previous year,” Peper told Arkansas Business. “The website delivered over 2.1 million sales leads to partners that year at no charge to them.
“That’s an average of over 5,700 leads a day to the mom-and-pop businesses that are the backbone of the Arkansas tourism economy,” she added. “The risk to this co-op advertising model is that those who can’t afford to advertise will see a decline in their business leads.”
CJRW’s Gray and State Tourism Director Jim Dailey said businesses had clamored for advertising opportunities. “Really this industry for a while has wanted their own marketing opportunity,” he said. “They thought why not put money right back into what serves our industry vs. Expedia or some other national chain? For one thing, Expedia’s gonna cost you more, and two, the returns are going to go to someone other than you.”
State officials, along with CJRW and Miles leaders, held seven meetings across the state in July to detail the ad approach for travel marketers, hoteliers and other businesses. “Reactions were overwhelmingly positive,” Webb said.
Questions about the ads arose at the Governor’s Conference on Tourism in March, Gray said, “but when we explained there were opportunities for all sizes of budgets, down to just $500 for an entire year, the people were satisfied.”
Gray, Webb and Dailey likened the new web advertising to the print ads that have appeared in the Travel Guide since its debut in 1967. The print guide, which CJRW Chairman Emeritus Shelby Woods has helped to oversee for more than 50 years, is read by 350,000 people a year, the state says.
Nearly half the 50 states’ tourism marketers sell co-op advertising on their websites, including states bordering Arkansas, Webb said.
He added that sales leads for travel-related businesses will still be counted and reported, but he doesn’t dispute that those who pay to advertise will gain advantages. After all, he said, that’s the point of advertising.
Richard Davies, Webb’s predecessor as director of the Department of Parks & Tourism, told Arkansas Business that he resisted selling ads on Arkansas.com during his long tenure.
Arkansas.com experienced a dip in visitor traffic in fiscal year 2018 to 4.3 million visitor sessions, down from the 6.1 million figure from 2016 reported to the parks commission in spring 2017, according to CJRW and state tourism officials.
Webb addressed that subject in an email to Arkansas Business. “The total number of ‘users’ to Arkansas.com has been trending slightly down for the past three years,” he wrote, citing changes in his department’s paid media strategy and in Google’s algorithm. (Forty percent of all Google searches nowadays do not result in a click to a website, he said.)
The Department of Parks & Tourism, Webb said, has moved from a direct-response marketing approach to what he called “improved awareness of Arkansas’s brand.”