11 Mar 2010

Economic Development Marketing: Present and Future

Mr. Monzon co-founded GIS Planning Inc., one of the fastest-growing 5,000 private companies in the United States, according to Inc Magazine. As developer of the first GIS-based website for economic development, Mr. Monzon is an entrepreneur, innovator and technology professional. With over 15 years of experience developing location-based applications and GIS based websites, he has received multiple awards in both the field of Economic Development and Geographic Information Systems. His work has appeared in The Wall Street Journal, CNN, NBC News, and numerous GIS-related publications. Mr. Monzon has lectured about Internet GIS in Europe, the United States, and Latin America. Prior to GIS Planning, Mr. Monzon worked for Vectiv, an online GIS site selection company focused on the retail industry.

Economic developers must be adept at implementing marketing strategies to promote their communities and grow their local economies. They must know how to communicate with businesses to be successful in this pursuit. Recent changes in communication, especially the rise of the Internet, are profoundly altering how business communication and research takes place, and are influencing how businesses engage in the process of site selection and interact with economic development organizations.

Many economic development agencies are responding to these changes through the way they market their communities and provide their services. Others have been left scrambling to make sense of how their industry is changing. Economic development organizations and local governments often do not match the speed of the private sector when it comes to restructuring business practices to respond to new challenges and opportunities. At the same time, benchmarking the success of economic development marketing efforts is difficult, as there are no typical “sales” data to point to as is the case with typical marketing.

There is limited long-term research about economic development marketing strategies’ efficacy or the different ways of measuring success. This is further complicated by the lack of industry-standardized or easily-measurable metrics economic developers use to evaluate their own marketing programs. Technology advances and globalization changes have only increased the dynamic nature of marketing, so economic developers are now reevaluating how to most effectively communicate with businesses. As the paths of communication between communities and business have broadened and the business demands for rapid information communication have increased, the necessity of effective marketing communication has become more crucial.

Economic Development Marketing 2008

This book, through analysis of a nationwide survey of economic development practitioners, examines how economic developers are using strategies to market their communities and their services. The book investigates changes in marketing over time and the effectiveness of the strategies used. Results from a separate survey of site selection consultants and corporate real estate professionals were brought in to determine how the marketing practices of economic development practitioners compare to the behavior and preferences of those involved in corporate site selection.

This study has resulted in several key findings:
• Economic development organizations’ budget allocations for marketing strategies do not always correlate with the effectiveness of each strategy. This indicates a lag between awareness and action. For example, print advertising, which received very low effectiveness ratings, receives the second highest average budget allocation.
• The most effective marketing strategy for economic development is the organization’s website. This was consistently reported by both economic developers and site selectors. Face- to-face marketing strategies also received high marks.
• The website was reported by site selectors to be the first point of contact with an economic development organization during the site selection decision making process, rather than personal interaction with staff. 98% of site selectors visit websites of economic development organizations during the process of site selection.
• The majority of economic development organizations are marketing to a national or global audience of businesses.
• Lead generation is the top measure of marketing success for organizations, and the amount of jobs created is the top measure of success for organizations overall. However, manufacturing is the top industry target for economic developers even though it
is a declining employment industry. High-growth employment industries such as business services, information, and finance/ insurance were all significantly lower priorities for economic developers.
• Large, urban communities targeted industries that create jobs for those in the knowledge economy, such as finance, science, and high-tech. Smaller, rural communities, and to a lesser extent suburban communities, targeted industries that create amenities that attract visitors and provide quality of place for residents, such as retail, accommodation/food service, and arts/ entertainment/recreation.
• The industries most targeted by economic development organizations differ from those that are served by corporate real estate professionals and site selectors. Furthermore, the economic development organizations that reported effective marketing results and stronger local economies were those that had campaigns which were aligned more closely with the industry focus of corporate real estate professionals and site selectors.
• Effective marketing was found to be correlated with higher budgets and more staff time devoted to marketing.
• With a few exceptions, the marketing strategies that tend to be outsourced at a high rate also tend to be those strategies that are given low effectiveness ratings.
• Contrary to the larger trend in advertising, economic developers are investing relatively little into online advertising. Spending is scheduled to increase in the next five years.

This book demonstrates which marketing strategies are most and least effective, followed by a discussion of how economic development agencies allocate their budgets among these strategies and for marketing as a whole. It then examines geographic coverage of marketing as well as the industries targeted. At this point, the book pauses to highlight differences in marketing approaches based on organizational structure and characteristics of the communities served. The practices of organizations with effective marketing are then detailed to attain insights as to what leads to success.

The book continues on to highlight patterns in the outsourcing of marketing strategies to help determine the rationale behind the use of consultants. It then discusses the sources of information utilized by corporate real estate professionals during the site selection process. The focus then analyzes economic development websites, including which resources organizations typically provide on their websites and how they are maintained. The book wraps up its discussion of marketing strategies with a look at how organizations benchmark the success of the entire organization and of marketing in particular.

This book can be used by economic development practitioners to better understand the changes in the practice of economic development marketing on a national scale. In the instances where consensus is achieved regarding the merits of particular marketing strategies, this book can serve as a resource on best practices for economic development marketing.


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