Cash-strapped cities, take note: An untapped source of revenue may be right under your nose. Many private sector businesses are ready and willing to guarantee public funding in exchange for access to public sector assets.
The concept of municipal marketing is “as old as the hills,” according to Michael Riley, author of $ave Your City: How to Get Businesses to Help Cut Your Taxes, a new book that takes a prescriptive approach to the process. Sponsorship deals have ancient origins, he says. A sign advertising a business was found on a public facility’s wall in ancient Pompeii. “Hopefully, the City was paid for the space before a volcano erupted and buried the site.”
From the City of Huntingdon Beach, California to New York City’s Health and Hospital Corporation and Denver Public Schools, municipal marketing has benefited a variety of modern-day public sector entities.
Riley, the co-founder and former president of Public Enterprise Group, a consulting firm that specialized in municipal marketing, calls this strategy a win-win proposition, wherein governments negotiate contracts with corporations who pay for the right to use public assets in ways that will help promote their businesses. Of course, Riley says, successful municipal marketing programs are based on a set of best practices, as he explains in the interview that follows.
MuniNet: What is municipal marketing?
Riley: “Municipal marketing” is a disciplined method for securing the broadest possible range of marketing partnership agreements between all kinds of governing bodies and private enterprises. These partnerships contractually permit businesses to make specified, time-limited use of public assets for the distribution and sale, promotion, and/or advertising of their goods and services.
Signage has been the “great grandfather” – and most common type – of municipal marketing. Signage can range from corporate banners adjacent to high volume roadways to advertisements on municipal furniture (e.g., bus benches, trash cans, etc.) and on the interior and exterior of transit vehicles.
Naming rights to stadiums and other large public venues have also become quite popular over the past several decades. When corporate sponsors pay for the right to name a public venue, they not only increase brand awareness for fans in attendance, but also benefit from the publicity and exposure of televised coverage of the events, often reaching a national audience. While the better known examples – like the Staples Center in Los Angeles, the AT&T Stadium in Arlington, Texas and the United Center in Chicago, to name a few – are in large cities, the strategy has been imitated even at the local, and even down to the high school level. The Fort Atkinson (Wisconsin) High School basketball team, for example, plays its home games in the PremierBank gym.
MuniNet: What barriers have governments had to overcome in order to explore and/or adopt municipal marketing programs?
Riley: Most often, the anticipated resistance of citizens whom elected officials expect to oppose any visible commercial installations in public spaces presents an obstacle. Too often, government leaders fail to recognize that public behavior actually shows that people prefer to visit sites that have commercial amenities to those that don’t. In addition, many officials lack knowledge of the wide variety of ways in which revenue can be raised by these means. And, unfortunately, simple bureaucratic inertia also plays a role.
MuniNet: Does the public generally approve of these programs? (One might assume that anything that lightens the tax burden would be well received – is that true?)
Riley: When I was at Public Enterprise Group, we used to joke among ourselves about “NIMBYs” (Not in My Back Yard”) and “C.A.V.E. people” (“Citizens Against Virtually Everything”). These kinds of people are usually a highly motivated, small minority. Criticism by a vocal sector of the population does not equate to failure. The “silent majority” of residents show by their actions that they feel very differently.
A Rousseauian primitive natural environment may be more politically correct, but which locations attract more visitors? Times Square or Muir Woods? Las Vegas or Yosemite? Venice Beach or next door’s Santa Monica beach? People don’t inherently object to a commercial presence in their own neighborhoods, evidenced by our nation’s most densely populated areas, like New York City, where commercialism is everywhere. Even in residential areas with strict zoning ordinances that prohibit blatant or overwhelming signage, more subtle opportunities exist; how many residents would really object to a corporate sponsor’s logo on their recycle bins?
MuniNet: Can you point to three key “best practices” that successful municipal marketing arrangements employ?
Riley: First, one needs to comprehensively and imaginatively audit the client’s properties, to better identify marketing revenue opportunities that might interest corporate sponsors.
Second, those assets need to be “sold” to prospective corporate partners as likely to provide highly profitable marketing investments for their products, services, and goals. To do so calls for aggregating as many useful assets as possible in the offering, providing extended contractual terms, and managing the partnership relationship in a responsive and proactive manner so that the partner will be likely to wish to renew their contract once its term has expired.
Third, the assets to be offered should be “packaged” in a specific and attractive manner, and publicly offered via issuance of a Request for Proposals. It may not be legally necessary to use such an extended process, since the government is not paying a vendor, but rather just receiving a partner’s funds in exchange for preferred or exclusive access to public assets. But use of the RFP process can help to prevent any risk of allegations of abusive or corrupt practice.
MuniNet: On the flip side, what are some “worst practices” that could lead to a failed municipal marketing experience?
Riley: Working with an abusive agency – i.e., one that demands (and often receives) rewards that are considered unethical and exploitive – can lead to trouble. Municipalities should carefully evaluate a consulting firm before hiring them to facilitate the process.
The public perception of abusive consequences can also cause problems. An epidemic of obesity among American youth quickly became attributed to excessive consumption of sweetened soft drinks and snacks. This conclusion has led school systems and even states to mandate that only healthy beverages and snacks may be marketed to students through on-campus vending machines.
Neglecting to observe industry procedures (like a formal competitive bidding process) or regulations can lead to scrutiny and/or failure. The Federal Aviation Association, for example, prohibits naming rights for airports. Awareness of regulatory standards is imperative before any proposal can be seriously considered.
Lastly, a firewall needs to be in place to prevent corruption – or the perception of unethical practices. It may not be legally necessary to use a Request for Proposal (“RFP”) process or the like (RFIQ, etc.) since the city will not be spending money, just collecting it. But by employing a non-preferential, open process, public sector entities avoid any misconceptions about single-source favoritism and even corrupt practices.
MuniNet: In $ave Your City, you provide several case studies of municipal marketing programs. Which would you identify as the most unique/innovative?
Riley: My personal favorite was suggested by a woman who attended my recent keynote speech to the Fall Conference of the GCCMA. Her idea: have Petco or PetSmart sponsor signs on top of municipal fire hydrants. The signs would simply say: “This Doggie Rest Stop is brought to you by (sponsor’s name goes here).”
From placing a corporate banner on the outside of a snow plow shovel to including ad inserts in public service mailers to new parents, the possibilities are wide in scope. Innovative leaders may need to shift from a mindset of “why?” to one of “why not?!” as they consider creative ways to increase revenues.
$ave Your City is available for purchase via Amazon.com.