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HomeMy WebLinkAboutCR 15-15 City °ie - Report to Executive Committee PICKERING Report Number: CR 15-15 Date: September 14, 2015 From: Marisa Carpino Director, Culture & Recreation Subject: Marketing Partnership and Advertising Policy - File: A-1440 Recommendation: 1. That Council approve the Marketing Partnership and Advertising Policy; and 2. That appropriate City of Pickering officials be authorized to take the necessary action to implement this Policy. Executive Summary: City of Pickering staff have prepared a Marketing Partnership and Advertising Policy that identifies a process to solicit, evaluate and make determinations regarding marketing partnership and advertising opportunities that safeguard the corporate values, images, assets and interests while increasing the opportunities for revenue generation. More specifically, the Policy establishes the principles and conditions under which the City will pursue and enter into marketing partnerships and advertising agreements and sets out the responsibilities and delegated authorities to ensure consistency with the City's vision and core values. The Policy applies to the following types of marketing partnerships and advertising opportunities over a specific period of time: 1. Program and special event marketing partnerships 2. Naming/renaming of City,property, buildings, and structures 3. Branding of City assets 4. Pouring rights 5. Paid advertising on City property, at City events, and in City publications The Policy is particularly beneficial to the City as it establishes a comprehensive and coordinated staff approach to more effectively build community partnerships, maximize city resources, enhance visitor experiences and minimize tax payer dollars. The purpose of this report is to seek Council's approval of the Marketing Partnership and Advertising Policy. . CR 15-15 September 14, 2015 Subject: Marketing Partnership and Advertising Policy Page 2 Financial Implications: The City's existing Marketing Partnership &Advertising Program generates approximately $50,000 in revenues and $10,000 in in-kind contributions annually. These partnerships are most often branding and activation opportunities at City events, services and programs such as Canada Day, Tree Lighting, Artfest, Sustainable Pickering Days, and Environmental Discovery Days. In addition, the Culture & Recreation Leisure Guide generates approximately $19,000 annually in advertising revenues. As per Council Resolution #247/14, the City also has an Advertising Licence Agreement which generates approximately $33,000 annually primarily through arena advertising. In total, the City of Pickering generates over $100,000 annually in advertising and sponsorship revenues. The annual cost to operate the City's existing Marketing Partnership &Advertising Program is approximately $50,000 in staff resources and miscellaneous program materials, which are reflected in the approved 2015 Current Budget. Culture & Recreation Department staff (and City Development, Library staff to a lesser degree) incorporate the operation of the Marketing Partnership &Advertising Program within their existing work portfolio, so funds for a single dedicated staff person are currently not incurred. Within the existing program framework, the City of Pickering has not yet captured revenue opportunities with respect to naming rights. These assets include five arenas at the Pickering Recreation Complex and Don Beer Arena, with associated change rooms and meeting rooms; indoor pools at the Pickering Recreation Complex and Dunbarton Indoor Pool; and, a variety of facility assets such as the Pickering Recreation Complex which includes the fitness room(s), weight rooms, squash, tennis and racquetball courts, children's program room, meeting rooms, art room and banquet hall. Other assets available for consideration also include City Parks and Trails, Sports Fields, Benches and Plantings and City events such as Adopt-a-Park, Pickering Blooms and National Youth Week. In this way, the City has many assets still available with the potential to increase revenue. The estimated value of the available marketing partnership and advertising opportunities (based on the City's assets) is approximately $825,000 annually. With current advertising and sponsorships sales of approximately $100,000 annually, the City is currently earning 8% of potential revenues. With the support of a dedicated staff person and the implementation of this policy, staff project to earn 20% of potential revenues (or $165,000) by the year 2017. CORP0227-07/01 revised CR 15-15 September 14, 2015 Subject: Marketing Partnership and Advertising Policy Page 3 The cost to operate the Marketing Partnership & Advertising Program within the proposed Policy is approximately $55,000 in 2016 and approximately $100,000 annually thereafter. These costs are primarily for one dedicated staff person to work full time, effective July 1, 2016, and for Marketing Partnership &Advertising Program costs such as program brochures and sponsors recognition events. Financial commitments to operate the Marketing Partnership &Advertising Program fully, as outlined in this Policy, will be brought back to Council for their information and consideration in the 2016 budget year. Discussion: City of Pickering staff have been pursuing marketing and advertising opportunities within our community for the past several years. These opportunities most often involve branding and activation opportunities at various City of Pickering events, programs and services such as Canada Day, Artfest, Celebrate Winter, Sustainable Pickering Days, and Environmental Discovery Days. The effort of staff results in approximately $50,000 in revenues and $10,000 in in-kind contributions annually. City of Pickering generates additional advertising revenues through the Culture & Recreation Leisure Guide (approximately $19,000 annually) and through an existing Advertising Licence Agreement for primarily arena advertising (approximately $33,000 annually). These partnerships have proven to be quite effective in building community partnerships, maximizing City resources, enhancing visitor experiences and minimizing reliance on tax payer dollars. As part of Pickering's Bicentennial Celebrations in 2011, City staff developed a comprehensive Sponsorship Program that was coordinated through the Culture & Recreation Department. This program was extremely successful in generating over $130,000 in revenues and in-kind contributions, which offset all costs associated with the Bicentennial Celebration activities. This experience highlighted to staff the potential of such a comprehensive and coordinated approach. As a result, City staff began to investigate the opportunity to develop a corporate wide Marketing & Advertising Program much like other municipalities which includes Naming Rights. During this review, staff found various challenges with the City's current Marketing Partnership and Advertising process which limits revenue potential such as: • A lack of a coordinated approach to solicit potential marketing partnerships and advertisers. • A lack of a comprehensive and coordinated corporate strategy to maximize revenues. • A lack of a centralized database to record, track, analyze and report on marketing partnerships and advertising activities resulting in donor fatigue due to multiple departments contacting the same sponsors. CORP0227-07/01 revised CR 15-15 September 14, 2015 Subject: Marketing Partnership and Advertising Policy Page 4 • A lack of a comprehensive asset inventory to market opportunities. • A lack of consistent valuations of similar marketing partnerships and advertising opportunities from one program to another. • A lack of information sharing regarding successes and lessons learned across departments. As such, City staff have worked collaboratively to develop the City's first ever Marketing Partnership and Advertising Policy. The purpose of the Policy is to identify a process to evaluate and make determinations regarding marketing partnership and advertising opportunities that safeguard the corporate values, assets and interests while increasing the opportunities for revenue generation. More specifically, the Policy establishes the principles and conditions under which the City will pursue and enter into marketing partnerships and advertising agreements, and sets out the responsibilities and delegated authorities to ensure consistency with the City's vision and core values. The Policy applies to the following types of marketing partnership and advertising opportunities, over a specific period of time: 1. Program and special event marketing partnerships 2. Naming/renaming of City property, buildings, and structures 3. Branding of City assets 4. Pouring rights 5. Paid advertising on City property, at City events, and in City publications As a result, the purpose of this report is to seek Council's approval of the Marketing Partnership and Advertising Policy. The Marketing Partnership &Advertising Program will not be fully implemented until mid-year of 2016, pending 2016 budget approval for associated costs. Attachments: 1. Marketing Partnership and Advertising Policy. CORP0227-07/01 revised CR 15-15 September 14, 2015 Subject: Marketing Partnership and Advertising Policy Page 5 Prepared/Approved/Endorsed By: Approved/Endorsed By: • Marisa Carpino Ri and Holborn Director, Culture & Recreation 'rector, Engineering & Public Works 1421(" To►- -lymuk 2 Di -ctor City Development Paul :ig '•�ni Direc •r, Coro orate Services & City Solicitor 1,25- J r agg Fire Chief Cathy Grant Chief Executive Officer, Pickering Public Library :mc Recommended for the consideration of Pickering City Council sir Acz6 . 3/, 20 5 Tony Prevedel, P.Eng. Chief Administrative Officer CORP0227-07/01 revised ( • ATTACHMENT#. TO REPORT# OR (6- Clty o City Policy PICKERIN Policy Title: Marketing Partnership and Advertising Policy Policy Number ADM 150 Reference Date Originated (m/d/y) Date Revised (m Idly) Pages FIN 030 . July 30, 2015 7 FIN 040 Approval: Chief Administrative Officer Point of Contact Director, Culture & Recreation Policy Objective The Corporation of the City of Pickering welcomes and encourages marketing partnerships and advertising to assist in the provision of City programs, services, events, projects and facilities. This policy provides guidelines to maximize revenue opportunities while safeguarding the City's vision, mission, values, interests, and public image. Index 01 Purpose 02 Scope 03 Application 04 Definitions • 05 Principles and Conditions 06 Administrative Requirements and Authorities Solicitation and Allocation Marketing Partnerships and Advertising 07 Delegation of Authority • 01 Purpose The purpose of this policy is to establish a process to evaluate and make determinations regarding marketing partnership and advertising opportunities in a manner that safeguards the City's corporate values, image, assets and interests while increasing the opportunities to neutralize costs and/or generate revenue. This policy does not pertain to funding received from other levels of government through formal grant programs. 02 Scope This policy applies to all relationships between the City and businesses, organizations, and individuals that contribute either financially or in-kind to City programs, services, events, projects, or facilities in return for recognition, public acknowledgement or other promotional considerations subject to a specific period of time. This policy applies to the following: • program and special event marketing partnerships • naming/renaming of City properties, buildings and structures • branding of City assets • pouring rights • paid advertising on City property, at City events, and in City publications 03 Application This policy applies to all City employees. This policy does not apply to the City's elected officials. • 04 Definitions 04.01 Advertising — denotes the sale or lease of advertising or signage space on City-owned property. Unlike marketing partnership, it involves the use of public advertising contracted at pre-determined rates for a set period of time. Advertising does not imply any reciprocal partnership arrangement since the advertiser is not entitled to any additional benefits beyond access to the space. 04.02 Marketing Partnership — is a mutually beneficial business arrangement wherein an external party, whether for profit or otherwise, provides cash and/or in-kind services to the City in return for commercial advantage. This payback may take the form of publicity, promotional consideration, merchandise activation opportunities, etc. Because of these marketing benefits, a marketing partnership does not qualify for a tax receipt. Policy Title: Marketing Partnership and Advertising Policy Page 2 of 7 Policy Number: ADM 150 04.03 Donations — is a gift or contribution of cash, goods or service given voluntarily toward an event, project, program or corporate asset as a philanthropic act. Donations do not constitute a business relationship since no reciprocal consideration is sought. Refer to the City's Financial Control Policy FIN 030 for rules that govern donations. 04.04 In-Kind Contributions — are non-monetary donations in the form of either goods or services rather than cash. The City is not required to provide marketing partnership benefits for in-kind contributions. In-kind contributions do not qualify for a tax receipt. 04.05 Naming Rights — are a type of marketing partnership in which an external company, organization, enterprise, association or individual purchases the exclusive right to name an asset or venue (e.g. a library building, sports facility or part of a facility, an ice pad in a multi-pad facility, etc.) for a fixed period of time. Usually naming rights are considered in a commercial context, which is that the naming right is sold or exchanged for significant cash and/or other considerations under a long-term arrangement. This arrangement is documented in a written agreement signed by the interested parties and has a specified end date to the contractual obligations. 04.06 Properties — refer to City assets. These include, but are not limited to events, services, programs, activities, real property, facilities, intellectual property, parks, features (e.g. rooms, ice pads, etc.) and other assets, but not including streets. 04.07 Pouring Rights — are a type of marketing partnership in which a corporation, an organization or an individual purchases the exclusive right to supply beverages at a City facility in exchange for cash and/or other considerations over a long-term agreement. • 05 Principles and Conditions General Requirements 05.01 Marketing partnerships and advertising must comply with federal and provincial statutes, municipal by-laws and the standards set out by the Canadian Advertising Standards Council. 05.02 Marketing partnerships and advertising opportunities will be considered and determined based on, but not limited to, the following criteria: • The value of the product, service and cash provided to the City; • The relationship is mutually beneficial to both parties; Policy Title: Marketing Partnership and Advertising Policy Page 3 of 7 Policy Number: ADM 150 • The opportunity enhances the development, awareness and sustainability of one or more City programs, services or facilities; and • The opportunity optimizes revenue opportunities and results in a net financial benefit to the City. 05.03 The following conditions apply when establishing marketing partnerships and advertising relationships: • The City will maintain control over the planning and delivery of marketing partnership activities; • Agreements shall not in any way invoke future consideration, influence, or be perceived to influence the day-to-day business of the City; • Advertising devices must not impact the quality and integrity of the City's properties, buildings, streetscape, and provide no added risks to safety; • The advertisement of a product or service does not act as the City's endorsement of any one product or service over another; and • The marketing partnership and advertising opportunity should be appropriate to the target audience. Restrictions for Marketing Partnerships &Advertising 05.04 The City will not solicit or accept marketing partnership or advertising from companies whose reputation could prove detrimental to the City's public image and/or whose main business is derived from: • The sale of tobacco; • Pornography; and • The support of, or involvement in the production, distribution, and sale of weapons and other life-threatening products. • 05.05 The City will not allow marketing partnerships or advertising, either directly or through third party arrangements, that: • Violate any City policy; • Convey a negative religious message that might be deemed prejudicial to religious groups; Policy Title: Marketing Partnership and Advertising Policy Page 4 of 7 Policy Number: ADM 150 • Promote alcohol and other addictive substances, at venues geared primarily to children; • Present demeaning or derogatory portrayals of individuals or groups or contain anything, which in light of generally prevailing community standards, is likely to cause deep or widespread offence; or • Is in direct competition with City of Pickering services, programs or initiatives. 05.06 The City reserves the right to reject any unsolicited marketing partnership or advertising that have been offered to the City and to refuse to enter into agreements for any marketing partnership or advertising that originally may have been openly solicited by the City. 05.07 The City may, at its discretion, bring any proposals to Council for their approval even if they do not meet the guidelines of this policy. 06 Administrative Requirements and Authorities Solicitation and Allocation Marketing Partnerships and Advertising 06.01 Marketing partnership activities and advertising should continue to be the result of direct solicitation by the City to marketing partners and advertisers. 06.02 As a general rule, the following marketing partnership and advertising opportunities should be competed: • O pp ortunities that will offer a significant corporate profile; • Agreements of a lengthy duration (over 5 years); and • Agreements that allow for exclusive benefits and recognition. 06.03 Non-competitive arrangements may be considered for the following opportunities when: • An unlimited number of marketing partners and advertisers are being sought; • It is a unique, innovative or experimental marketing partnership opportunity; • Only one suitable marketing partner can be identified; • The value of the marketing partnership or advertising opportunity is less than $50,000; Policy Title: Marketing Partnership and Advertising Policy Page 5 of 7 Policy Number: ADM 150 • The value of an in-kind media marketing partnership is less than $100,000; and • The need is justified in a business case, approved by the Chief Administrative Officer and Division Head, Finance & Treasurer. 06.04 Unsolicited marketing partnerships and advertising received by the City will be reviewed and evaluated by the relevant program staff as per the provisions of this policy. 06.05 The selection of a preferred supplier will be consistent with the City's procurement policy. There will be no requirement to obtain quotes or undertake a proposal and staff can initiate opportunities without the requirement to test the market further. 06.06 All marketing partnerships and advertising shall be evaluated on an annual basis to determine continued benefit. The term of all agreements shall not exceed ten years, unless authorized by City Council. 06.07 The City reserves the rights to terminate an existing marketing partnership or advertising agreement should conditions arise that make it no longer in the best interests of the City. Accordingly, the City reserves the absolute right to order the immediate removal of advertising on its property at any time. 07 Delegation of Authority City staff is authorized to enter into marketing partnerships and advertising that do not exceed the following pre-authorized limits. Agreements that exceed these pre- authorized limits will require City Council approval. 07.01 Supervisors: Supervisors are responsible for approving all agreements with a total contract value of up to $15,000 provided they satisfy all provisions of this policy. 07.02 Managers: Managers are responsible for approving all agreements with a total contract value of up to $30,000 provided they satisfy all provisions of this policy. 07.03 Directors: Directors are responsible for approving all agreements with a total contract value of up to $100,000 provided they satisfy all provisions of this policy. 07.04 Chief Administrative Officer and the Division Head, Finance & Treasurer: The Chief Administrative Officer and the Division Head, Finance & Treasurer are responsible for approving all agreements with a Policy Title: Marketing Partnership and Advertising Policy Page 6 of 7 Policy Number: ADM 150 total contract value of over $125,000 and/or with a financial expenditure required by the City to fulfill the sponsorship request of over $5,000. 07.05 City Council: City Council approval is required for any contract that does not satisfy the provision of this policy and for opportunities involving the naming/renaming of City property, buildings and structures for a specific period of time. City Council approval is required for all proposals that include billboard advertising. Please refer to all associated Procedures and Standard Operating Procedures, if applicable, for detailed processes regarding this Policy. Policy Title: Marketing Partnership and Advertising Policy Page 7 of 7 Policy Number: ADM 150