1. Co-op Strategy and Restructure May 19, 2008 CA Travel & Tourism Commission

2. Co-op Strategy & Restructure History – Heavy reliance on contractors to create, promote and implement programs due to limited CTTC funding – Programs tended to operate in a silo – Programs could be more effective if in line with CA brand strategies Research – Surveys: Fun Spots/Treasure Hunt, DMO, CMG and Wine & Food – Anecdotal feedback from Rurals, CWC’s, Marketing Reps and Sunset Environmental shifts – Budgetary factors Increase in funding Increased opportunity due to funding

3. Co-op Hierarchy

4. Criteria #1: Financial Commitment Strategic Alliance programs must be funded by a minimum cash contribution of $500,000 a year* (or in-kind media equivalent^) for a minimum of three years *Current programs will be grandfathered in and subject to criteria after the end of the current contract ^ In-kind media will be evaluated by the ad/co-op committee and may be higher than $500K/yr Criteria #2: Brand Development Strategic Alliance programs must extend the California brand, reinforcing the “California Attitude” and expanding reach and influence among leisure travelers Criteria #3: Research-driven Strategic Alliance programs must be supported by research findings that demonstrate a designated area of need and/or opportunity for CTTC Criteria #4: Scope Strategic Alliance programs must be statewide, providing broad promotional coverage Strategic Alliance programs must be long- range (multi-year) Strategic Alliance Criteria

5. Mktg Partnerships - Criteria Criteria #1: Program Contribution Must be funded by a 3:1 industry to CTTC contribution* Turnkey operation – all sales, promotion and implementation is primarily the responsibility of the contractor Proven track record of success of no less than two years * Non-assessed industries currently receive no funding from the CTTC. All funding requests will be evaluated for approval by the ad/co-op committee Criteria #2: Brand Alignment Programs must align with current brand pillars/initiatives and/or support specific assessed tourism industry segments not already supported by CTTC Programs must meet industry objectives, expanding reach and influence among leisure travelers domestically and/or internationally Criteria #3: Integrated Communications Programs must be multimedia (to include print, online, travel trade, PR, direct mail, etc.) Messaging should reflect the CA brand Criteria #4: Scope Must be statewide Must have tiered offerings so that it is viable for all levels of participation Partnerships can include DMO’s assessed and non-assessed businesses

6. Co-op Restructure Process Exploratory Screening – Does it meet all criteria? – Does CTTC have appropriate resources to implement (time/staff/budget)? Vetting – Marketing Committee level Approval – Commission level Implementation Evaluation

7. APPENDIX

8. Strategic Alliance Example Southwest Airlines

9. Criteria #1: Financial Commitment Program is based on a 50/50 match; since inception (2005) Southwest Airlines has contributed $1.89M Criteria #2: Brand Development Extends California’s brand cachet through an unprecedented association with one of America’s leading travel providers Criteria #3: Research-driven Opportunistic alliance that provides additional support in California’s key primary domestic and national opportunity markets Criteria #4: Scope The initiative supports key destinations throughout the state with a strong, retail message Strategic Alliance Example: Southwest Airlines

10. Southwest Airlines Program Objectives – Promote California as a dynamic travel destination – Extend the reach of California’s brand advertising – Stimulate incremental travel to California using Southwest Airlines Program Metrics – Spot aired in Chicago, Dallas, San Antonio, Houston, Denver and Phoenix promoting discounted fares – In Mar, passengers increased by 50K (up 11.1% YOY) The biggest gains were seen in OAK & SJO where traffic increased 10.1% and 11.9% respectively – Campaign helped to launch a new city (SFO) and new non- stop city pairs from Denver to CA

11. Southwest Airlines Program Components – TV :20 California + :10 Southwest Airlines tag

12. Apple – The Apple brand is about imagination, design and innovation, and like California is an archetypal emotional brand Levi’s – The Levi’s brand embodies freedom and individuality; young at heart, strong and adaptable they are a symbol of independence, social change and fun, qualities right in line with the California brand Strategic Alliances: Potential Non-endemic Targets

13. Marketing Partnership Example CMG – Inside Scoop

14. Inside Scoop (CMG) Criteria #1: Program Contribution The 2007 Fall Insert was one of the most successful programs implemented by CMG for CTTC with a 5:1 industry to CTTC contribution (Industry $600K/20pg; CTTC $120K/4pgs) Criteria #2: Brand Alignment The initiative is modeled around the Inside Scoop brand messaging pillar. A template was designed to create a cohesive look and feel. The final product unified a mix of advertorial and display ads Criteria #3: Integrated Communications The program includes print, online exposure and direct mail to qualified American Express members Criteria #4: Scope 2007 participants included a mix of DMO’s, attractions, restaurants, hotels, shops and golf courses from across the state

15. Program Objectives – Target: upscale consumer travelers in the Western US – Content reflects California’s abundance Written from an insiders perspective Vacation ideas designed to inspire travelers familiar with CA Program Metrics – Total Partners: 40 (vs. 23 in 2006) – Total pages: 24 (vs. 16 in 2006) – Results from American Express mailer due Sept ’08 – CMG Online survey results Positive overall; interest in continuation of the program Online mentioned as more efficient, measureable Inside Scoop (CMG)

16. Program Components – Print (total circ: 850,000) National Geographic Traveler Travel & Leisure Food & Wine – Direct Mail (dist: 50,000) American Express – Online visitcalifornia.com sogonow.com

17. Marketing Partnerships: Potential Programming Expansion opportunities – Extend current programs Additional insertions/events for shoulder or off-peak seasons – Opportunities in niche markets Families, ethnic, gay travel – International Integrated opportunities within current offerings – Example: Japan Trade Mission

18. For More Information: Antonette Eckert Advertising & Co-op Marketing Manager 916.319.5405 aeckert@visitcalifornia.com Tammy Haughey Mering Carson 750.754.0800 x2 thaughey@meringcarson.com