OCEAN CITY — Resort officials this week renewed the contract with the town’s advertising agency, sparking a debate about the demographics Ocean City should be targeting including median household income.
The Mayor and Council on Monday exercised an option to renew Ocean City’s contract with the advertising agency MGH for another three years. The town’s most recent contract with MGH was set to expire at the end of the year, but the council voted unanimously to renew it for another three years. In exchange for the contract renewal approval, MGH agreed to lock in the rate at just under $23,000 per month for the life of the new contract. It’s important to note the town’s advertising budget is fueled largely by a percentage of the room tax dedicated for marketing.
In that way, the marketing budget is funded largely by the visitors to Ocean City through a contribution to the room tax and not from the town’s general fund. Tourism Director Donna Abbott told the Mayor and Council the Tourism Committee had given a favorable recommendation for renewing the contract with MGH.
“We have a great working relationship with MGH,” she said. “Our numbers have been trending very favorably in recent years.”
While the council ultimately approved the contract renewal with MGH, it did spark a discussion about more research into Ocean City’s desired marketing efforts. Councilman Wayne Hartman asked if there had been any recent market research to determine if the town’s advertising efforts were reaching the desired demographics.
“I know there have been conversations about making sure we’re reaching our target audience,” he said. “When was the last time we did any market research to see what families are looking for when they pick a place? If they picked Ocean City, why did they pick Ocean City, or why did they pick somewhere else?”
Hartman said the resort has changed and evolved with new amenities and it could be time to redirect some of the marketing efforts to different demographics.
“We have a lot of new amenities in town and we have a lot of new hotels that could help us attract a different audience,” he said. “What makes people choose Ocean City or not choose Ocean City? Is it too much alcohol or not enough of something else? You hear we’re losing families, but when was the last time we did any market research?”
Abbott said there was comprehensive research into Ocean City’s target audience a few years back. In the meantime, the tourism department does yearly surveys of visitors with a variety of questions including home zip codes, how often visitors come and how long they stay, what they like most about the resort and what they believe is lacking and even median household income, for example. Abbott said if the council desired, a deeper dive into market research could be accomplished.
“We did an advertising effectiveness study about six years ago,” she said. “It’s not something you would do every year. Based on the numbers we’ve been seeing, it’s been very favorable for us. We can certainly find some money in the budget to do an advertising assessment if that’s what the council desires.”
Hartman agreed the number of visitors to Ocean City remained solid, but seemed to suggest the marketing efforts could be directed at a different target audience.
“There is no doubt we’re getting people here, but are we getting the right people?” he said. “What direction should we give our advertising agency? Should we be emphasizing certain amenities we have or are we lacking certain amenities? It might be time for a reality check.”
Abbott said MGH is given broad parameters including the median household income for the desired target audience which has doubled in the last year or so.
“We do give them parameters for the audience we’re seeking,” she said. “At one time, the median household income for our target audience was lowered to $50,000 by the then-council. That’s pretty low. As the economy has improved, we’ve raised the median household income target to $100,000-plus.”
Abbott explained some of the other parameters given to MGH for the target audience. For example, the target includes adults ages 25 to 49 and families with children under the age of 18. The marketing efforts are also directed to the females of the households because they are generally the decision makers. Abbott explained much of the marketing effort is targeted at the major metropolitan areas in the mid-Atlantic region including Baltimore, Washington, D.C., Philadelphia, Central Pennsylvania, and the New Jersey-New York corridor.
However, based on those marketed areas it could be difficult, generally speaking, to find the target audience that meets the new $100,000-plus median household income. According to the most recent data available from the 2014 Census, the median household income in Maryland is $70,000. New Jersey is also around $70,000, but Washington, D.C. is $65,000, New York is $55,000 and Pennsylvania is $50,000.
Of course, it goes without saying the median household income in each of the states to which the town directs its marketing efforts varies greatly from county to county and even neighborhood to neighborhood. In Maryland, for example, just six of the 24 jurisdictions had median household incomes of $100,000 or more including Howard County at the highest at $129,000 and Montgomery County at $117,000. Worcester County, by way of comparison, is right at the state average of $70,000. Eight counties in Maryland fell below the state average of $70,000 with the lowest being neighboring Somerset County at around $47,000.
Hartman seemed to be suggesting targeting areas with higher median household incomes could be accomplished with creative marketing strategies. It goes without saying a broad television or radio campaign reaches demographics up and down and all over the median income scale, but it could be possible to direct some efforts to areas with higher median incomes.
“That’s a good start,” he said. “Maybe we can have smaller billboards in smaller communities where the desired demographics exist. Does anybody else feel there is a need to find out why people are coming here or why they aren’t coming here?”
Council Secretary and Tourism Committee chair Mary Knight said the desired target audience needed further discussion and suggested it begin at the Tourism Committee level.
“I will make sure this gets on the next Tourism Committee agenda because this is an important discussion,” she said. “A couple of years ago, we did a little survey to ask people why they like to come to Ocean City and how often they come, for example, and it gave us some great information.”
Abbott explained each year surveys are taken from visitors at various locations around the resort to gather the information desired including the home zip codes of visitors. However, it has been challenging to get responders to share their household income information.
“People are hesitant to respond with income information even on an anonymous survey,” she said. “It’s really amazing to see the hesitancy from people who don’t want to share information about their household income.”