CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
1/8/2024
1 SUBJECT:
Resolution Authorizing a Contract Extension with Creative Digital Agency for Continuing Marketing Services
RECOMMENDED ACTION:
Move to adopt a Resolution approving a one year extension to consultant services agreement between the City and Creative Digital Agency (CDA) to continue providing marketing services and authorize City Manager to execute the necessary amendments not to exceed the budget authority of $75,000, with an option to extend for two additional years at City Manager's discretion.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
(650) 501-6004
[email protected]
Tara G. Schiff, Economic Development Manager
(650)501-6007
[email protected]
BACKGROUND:
On December 13, 2021, the City Council held a joint Study Session with the Economic Development Committee (EDC) on the Vision 2025 & Beyond study. This discussion included a presentation of the Pacifica Marketing Report & Gap Analysis and a review of the 14 Economic Development marketing opportunities in Pacifica identified in the report prepared by the Creative Digital Agency (CDA). CDA is a full-service marketing firm that provides marketing services to several Bay Area cities and counties to assist them in their economic development, marketing, and hospitality efforts.
City Council directed staff to proceed with the development of a 2-Year Marketing Plan with CDA to prioritize work on the Shop Pacifica and Workcations marketing opportunities identified in the study.
In February 2022, the City Council approved a two-year agreement with CDA, funded by the one-time ARPA funds for implementation of the economic development marketing plan. The following priority work areas (opportunities) were identified to be the initial focus of this engagement:
1. Shop Pacifica eGift Card Program to launch the shop local investments in Pacifica’s economy.
2. Workcations opportunity to bring additional visitors and revenue to hotels in Pacifica.
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3. Social Media opportunity with a focus on improving Pacifica’s social media reach to market the City, including better use of Instagram as well as blogs, newsletters, influencers, and other social media tools.
4. Banners opportunity to target residents and visitors at Palmetto Avenue, providing local foot traffic audience awareness for the Shop Pacifica program and upcoming events.
DISCUSSION:
The two-year contract will expire in February 2024 and staff is recommending an agreement renewal for one year at this time to continue services without interruption while staff is pursuing the alternative funding sources for an ongoing Marketing program.
To better track the progress of their work, CDA tracked the Key Performance Indicators (KPIs) over the two-year term and prepared a detailed analysis and explanation of performance measures (Attachments A and B).
Below is the summary of the key accomplishments of the Marketing Plan implementation:
1. Implementation of Shop Pacifica eGift Card Program, powered by Yiftee, the local Bay Area company based in Menlo Park launched in late 2021. All Pacifica businesses with a current business license were eligible to participate in the program to accept Shop Pacifica gift cards (backed by Visa card) from their customers. Local businesses and community organizations were also invited to promote the program by providing Shop Pacifica Gift Cards to their employees as holiday gifts, special recognitions and other incentives.
To date, 56 local businesses are registered for the program, and consumers have a diverse range of shopping options to utilize their Shop Pacifica cards from restaurants and cafes to spa salons and retail shops, injecting additional revenues in Pacifica’s local economy. In partnership with CDA, City staff successfully launched the program and ran a series of promotions throughout the year, including a “Buy One, Get One” (BOGO) program, Restaurant Week, Valentine’s Day promo, and Teacher’s appreciation campaign.
The Shop Pacifica Gift Cards can only be used in Pacifica at participating businesses, guaranteeing that the gift card funds stay in the community and benefit Pacifica's local businesses. Since the start of the Shop Pacifica program, the City distributed 2,340 egift cards, including 1,688 purchased cards and 652 bonus cards valued at $25,390 (funded by ARPA) that resulted in a total additional new revenue of $89,195 inserted into local economy directly benefitting the local business community.
2. Workcation - The Pacifica Workcations program was launched in the Summer of 2023 as a pilot program with a very limited budget of $3,500. The City’s hotels generally stay busy during the weekends and summer months, so the Workcation program focused on increasing revenues from midweek stays during the offseason. The rise of the remote work population provided an opportunity to generate additional mid-week one-plus-night stays at the local hotels. The idea of workcation was to build a campaign to inspire remote workers to escape the boundaries of their home office and instead work remotely with ocean views in one of Pacifica hotels, reinventing their lunch break by doing hiking or surfing, or taking advantage of everything Pacifica’s nature has to offer. The Pacifica City Council 3
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campaign also incorporated the Shop Pacifica program by incentivizing remote workers with a free $50 Shop Pacifica gift card (funded by ARPA) that they could spend in over 50 locations around the City when booking two or more nights Monday to Thursday.
Over three months of this pilot, the program resulted in 42 mid-week workcation reservations, injecting about $48,100 into the local economy, in the form of direct hotel rent revenues ($32,900) and projected visitor spending at local businesses ($15,200).
An estimated additional revenue (approx. $10,000) are included in the figure above to account for return visitors with remaining gift card balance, assuming they chose to come back for a one-night return visit. The pilot program has proven to successfully increase mid-week hotel occupancy in the City, resulting in the increase in Transient Occupancy Tax (TOT), and related increase in Sales Tax as a result of additional overnight visitors’ spending. The City has realized a return on investments of approximately $5,400 from this three-month pilot program in the form of additional TOT and Sales Tax revenues.
To help promote the program, a website showcasing Pacifica hotels was created and Shop Pacifica “giveaways” were advertised through regional paid media partnerships and various digital channels and PR sources. The comprehensive review and analysis of this pilot program will help design a successful ongoing version of the Workcation program, once the ongoing funding mechanism is identified.
3. Media/Social Media Coverage - The City’s long-term regional awareness of Pacifica has grown through ongoing PR outreach to Bay Area television, print, and digital media outlets, as well as utilizing the City’s Facebook and Instagram profiles, highlighting businesses, events, and cultural & natural attractions. During the holiday seasons of 2022 and 2023, Bay Area television stations broadcasted live from Palmetto Avenue to highlight the “Shop Small Saturday” event with local businesses. Several Pacifica small business owners reported a significant increase in sales from the broadcasts.
4. Banners on Palmetto - With the CDA’s creative design assistance, the City coordinated the implementation, design/production and installation of 28 light post banners on Palmetto Avenue. The banners highlighted the Shop Pacifica Program and included a scannable QR code for interested consumers.
Recommendation:
To capitalize on the success of these marketing initiatives and continue the Media/Social Media Coverage, which should be an ongoing effort to highlight and promote the City, the City Manager recommends a one-year contract extension to continue marketing services with CDA without interruption. Since the ARPA funds that originally funded these marketing efforts are no longer available, staff is actively pursuing alternative funding sources to support the City’s ongoing marketing program. Staff is researching funding opportunities, including, but not limited to various Economic Development Grants, possibility of using future BID assessments to fund visitor-related marketing services (would require the BID approval), pro-bono work from local marketing experts and interns, etc. The City Manager is also requesting Council authorization to execute an optional extension of this agreement for two additional years if/when alternate funding sources (other than General Funds) have been identified, and if no changes in the scope of engagement are made. Any substantial change in the scope of the marketing program, such as an increase or expansion of marketing services, would require the Council’s approval as part of the new agreement.
ALTERNATIVE ACTION:
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City Council may revise or modify the Staff recommendations and reconsider the contract renewal.
RELATION TO CITY COUNCIL GOALS AND WORK PLAN:
This item furthers the City Council’s Strategic Goal and the City’s efforts to “Enhance Organizational and Fiscal Stability”.
Successful Marketing Programs improve the City’s fiscal stability by providing a return on investment (ROI) to the City in the form of increased Sales Tax, BLT and TOT revenues, in addition to helping local businesses thrive. An effective, comprehensive, and ongoing marketing plan will help boost the local economy and increase the City’s revenue base to be able to adequately fund City general services.
FISCAL IMPACT:
The total fiscal impact from the one-year extension of Economic Development marketing contract with CDA is $75,000. The FY 2023-24 impact will be approximately $30,000. If this item is approved this amount will be added during the mid-year budget review, and the remaining $45,000 will be included to the FY 2024-25 General Fund Base budget.
Staff is also researching alternative sources to fund the City’s ongoing Marketing program in the future and will renew and may revise and expand the scope of the Marketing priorities when such sources are identified. Any revisions to the scope of the program will be brought back to Council for approval.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
Memo CDA (PDF)
Pacifica Marketing Impact - CDA (PDF)
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RESOLUTION NO. ___-2024
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA
APPROVING A ONE YEAR EXTENSION TO CONSULTANT SERVICES AGREEMENT
BETWEEN THE CITY AND CREATIVE DIGITAL AGENCY TO CONTINUE PROVIDING
MARKETING SERVICES
WHEREAS, the City conducted a Marketing and Gap Analysis study and identified 14 marketing opportunities for Pacifica.
WHEREAS, the City entered into agreement with Creative Digital Agency in February 2022 to
develop and implement a two-year marketing plan prioritizing four marketing opportunities (Shop Pacifica, Workcation, social media, and banners) previously identified in the study.
WHEREAS, the City desires to capitalize on the success of these marketing initiatives to continue marketing services with CDA without interruption.
WHEREAS, the City is pursuing alternative funding sources to fund the ongoing marketing program since the ARPA funds that financed the initial engagement are no longer available.
NOW, THEREFORE, be it resolved by the City Council of the City of Pacifica, California, to authorize the City Manager to execute the necessary amendments to extend the existing contract with Creative Digital Agency by one additional year, not exceeding the budget authority of $75,000, with an option to extend for two additional years at the City Manager’s discretion. • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 8th day of January, 2024, by the following vote:
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
Sue Vaterlaus, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney