Though maddening in its lack of clarity (likely because the reporter is just as confused as his sources), an article in the Ottawa KS Herald is a case study for why those with a lack of experience in the Destination Marketing world should just STFU.
The headline for yesterday's story screams "Visitors Bureau Spending 89% on Overhead."
Are you shocked? Some members of the Bureau Board seem to be. Of course, if a Board Member doesn't know how the funds over which they preside are being deployed, they shouldn't be on the Board, But, that is a completely different rant for another time.
I'm not shocked or dismayed in the least at an 89% "overhead" figure…and here's why: A lot of non-profit organizations have no more idea how to design their budgets and financial statements than Somali pirates know how to build a starship. Overhead ends up being rent, utilities, salaries, benefits, taxes, letterhead, copy paper, software…just about everything that is considered a sunk cost.
"Programming" for a DMO, on the other hand, is typically advertising purchased, trade shows attended, etc.
There are two problems here. If non-profits handled their financial reporting like for-profit corporations, a significant percentage of those "overhead" costs would be assigned to a functional area of the enterprise. The salary and benefits (and phones, computer, internet connection, stationary, business cards, etc.) of the person in charge of the website and Social Media would be assigned to Marketing, where those costs belong. After all, you wouldn't hire and equip a person for this role if they couldn't market.
The only portion of salaries that should be assigned to "overhead" or "Administration" would be that of the Director…and then, only the amount of time that person devotes to running the operation. Indeed, most CEOs should have their salary/benefit costs spread over several functional areas such as Community Relations, Event Support, Fundraising, etc.
So, part of this non-story is that the Visitors Bureau Board isn't sophisticated enough to run their books in a way that breaks down the true cost of Destination Marketing in the right functional areas.
The other issue, however, is even deeper. As online, mobile and social are increasingly becoming the way destinations lure visitors, successful DMOs are staffing up and cutting "programming" costs because it takes people on the ground with real time understanding of the destination to move the needle and increase visitation and spending.
If I had a limited amount of resources (as I'm guessing Ottawa KS possesses), I'd put it all on digital. Not just 89%.
But, here is the most telling quote in the article: The County Administrator questions the viability of the Visitor Information Center, saying, "Quite honestly, I’m asking myself a very simple question: If I was running a business, could I exist on only one visitor or customer an hour?"
Mr. Holmes? You are running a business. And that only one person an hour visits Franklin County? I'd start investing a lot more into advertising.
I'd start investing a lot more in your Visitors Bureau.