Government markets differently
Quebec's tourism spending demonstrates public sector's strengths/weaknesses

Defining which areas of the economy should be run by government and which should be handled by the private sector is hard. The primary goal of most companies is to make money and that of governments is to serve the public.

So how do you measure the success of say a hospital? By the number of patients it serves, or by the amount of money that is costs to run? One area that offers interesting insights into both government's strengths and weaknesses is tourism marketing.

Tourism is big business. According to Richard Legendre, Quebec's minister of tourism, sport and recreation, the sector generated $2.3 billion in revenues for the province last year, almost double that from the 1993/ 1994 season.

And it's growing. "About 1.6 billion people will travel outside their country in 2020, double this year's total," Legendre told a marketing industry conference last week. "And for many of those people Quebec is a well kept secret."

To help get the word out, one of Legendre's first acts when he took over the portfolio earlier this year was to get his department's marketing budget hiked. Spending will jump from $24 million two years ago, to $35 million a year for the next five.

That's a lot of money. And right of the bat, one of the key advantages of government becomes apparent. Many businesses such as hotels, restaurants and entertainment companies - and the employees that work in them -- benefit from tourism. But it is highly unlikely thee industries would have ever been able to pitch in to put together a budget that big. On the other hand, private sector advertisers probably would not have spent the money the same way that the Quebec government did.

For one, it is widely acknowledged in the advertising community that when you want to market to an audience, the most effective way to do so is to use a local agency, since is likely to be more attuned to the preferences of its audience. That's why Pepsi-Cola for example, uses a Quebec agency -- PNMD Communication -- to market to Quebecers, and another agency to market to Americans.

On the other hand, the Quebec government used a Quebec agency -- Palm Publicité Marketing -- to produce all four of its summer tourism ads, even those destined to be broadcast in the U.S. and in Europe. The Canadian government also favors Canadian owned agencies, regardless of whether a foreign firm is better qualified or cheaper.

By restricting itself to local firms for its international advertising the province is undoubtedly paying more money, for less effective ads, something unlikely be tolerated in the private sector.

Another big difference is that in the private sector, companies mostly push their winning products, and they let their dogs die. But -driven by political pressure - governments often take a different course.

For example the Quebec government is devoting a considerable portion of its budgets to developing the tourist potential of regions hit by high unemployment such as the Gaspé. In effect, this mixes regional development subsidies into the marketing budget, making it difficult to assess how well the money is being spent.

A private sector marketer would target the lion's share of money toward promoting the Montreal region, with its festivals, attractions and international flavor. But in the four ads of Quebec's summer television campaign, Montreal is barely mentioned. There is a shot of the skyline, but most of the rest of the ads are filled with shots of regional and country scenery.

That's unlikely a coincidence. The vast majority of the Parti Québécois's MNAs come from Quebec's regions, and they have consistently favored regional interests over those of the Montreal island. It's thus no surprise that this is also reflected in the province's tourism marketing.

Although a government spokesman denies it, political factors may also be behind the fact that the government also paid for a separate television ad for the Saguenay/ Lac St-Jean region, site of former premier Lucien Bouchard's old riding.

The problem is that politically driven spending, the appearance of favoring certain sectors and the inability of governments to set appropriate targets so the public can judge their effectiveness, are features of almost all public sector programs. But with marketing budgets - since private sector advertising offers a good point of comparison - these weaknesses are more readily apparent.

 

E-mail can be sent to Diekmeyer at: peter@peterdiekmeyer.com

-30-

Home | Gazette articles | Eye on Ottawa | Book reviews

peter@peterdiekmeyer.com
  © 1998 Peter Diekmeyer Communications Inc.