Fiscal Year 2008/09 Domestic Brand Advertising Work Plan CTTC Advertising & Co-op Committee May 19, 2008

1. Fiscal Year 2008/09 Domestic Brand Advertising Work PlanCTTC Advertising & Co-op CommitteeMay 19, 2008

2. California’s Brand Advertising Program is Going Strong Increased funding and associated brand advertising program continues to deliver strong results Overall Awareness/Reach up from 44% (’06) to 61% (’07) Incremental Trips up from 1,543,324 (’06) to 2,595,547 (’07) Economic Impact up from $1.96 billion (’06) to $2.9 billion (’07) In 2007/08, the program was expanded to give consumers more/new reasons to visit California through the strategic layering of messaging platforms, including: CA Attitude CA Snow CA Wine & Food – new CA Insider – new

3. Fiscal Year 2008/09 Planning Considerations Recession fears pose a challenge in the coming year An April New York Times poll indicated that 2/3 of consumers believe we are in a recession Across all segments, leisure travelers are rethinking their vacation travel plans, asking themselves: “What kind of vacation should I take…or should I take one at all?” Weakening consumer confidence and spending, higher fuel prices, tightening credit markets and smaller disposable incomes are all making it harder for the average consumer to take vacations; they also play a role in how consumers will travel in the next year and how often

4. While Recession Fear Dominates the Dialogue… " Americans are running scared and concluding that they had better save more in case the worst happens. Many are deciding to forgo a summer vacation. “ "When times are rough, they get scared, and rightfully so--they need to pull back.” CONSUMER CONFIDENCE HITS 5 YEAR LOW 34% of travelers plan to decrease vacation/travel in 2008 …the News Isn’t All Bad “…travelers have become fairly resilient to the impending economic pressures and growing travel costs.” "Leisure travel, on the other hand, tends to remain fairly constant. People may alter their personal travel plans in search of more modest accommodations, but they still want to take their vacations.” . “Don’t buy into the mindset that you can’t afford a vacation during a recession. There are many ways to vacation well in this economy." “…last minute road trips and regional air travel will likely replace more expensive vacations…” “The US travel industry is expected to post moderate gains in 2008” Source: Center for Media Research, TIA, Travel Industry Wire

5. Challenges & Opportunities for California • Challenge to position California as the destination of choice given the economic environment • Tougher fight for share-of-mind as other states/destinations (e.g. Florida, Las Vegas) increase their spending • Downsizing of vacation trip frequency, distance and spend • Increase in value-conscious travelers (“trading down phenomenon”) CHALLENGES OPPORTUNI T I ES • Consumers will continue to travel, though they are likely to “trade down” (even those with incomes up to $150K/year) • Travelers likely to travel closer to home – and at the last minute • High-end travelers will skip international travel due to weak dollar and will travel domestically (while international travelers can exploit the exchange rate and upgrade their trips to CA) • Consumers rely on proven brands in economic downturns

6. Brand Advertising Communications Objectives • Continue to foster awareness of California as a premier travel destination, seeding consideration among consumers outside the state. • Maintain high levels of acceptance for the California attitude and experience. • Inspire repeat visitation. • Encourage consumers to take action and visit CTTC Web sites. • California had the highest scores among the competitive set for consumers seeking information on the destination after seeing the advertising(Source: 2007 SMARIAdvertising Effectiveness & ROI Study) • Gathered info/researched destination, Index 174 • Generate incremental travel to California.

7. Brand Advertising Communications Strategies Capitalize on the success and momentum of California’s brand advertising program, while incorporating new thinking and focus to overcome new challenges. • Continue to brand the California Attitude and experience to competitively differentiate the state and create desire. • Deliver year-round support that aligns with California’s year-round travel patterns. • Reconnect with consumers who are familiar with the California brand to offer new reasons to visit. • Continue to leverage wine and food as a driver of destination choice. • Develop strategic alliances with like-minded brands to elevate California’s brand cachet and extend reach and influence. • NEW FOR FY 2008/09 – Bolster “retail” messaging (events, promotions, etc.) to stimulate near-term travel in a difficult economic environment.

8. Bolstering “Retail” Messaging EXPANDED EVENTS CALENDAR ON visitcalifornia.com THEMED EVENTS CALENDARS IN PRINT INSERTS MAJOR EVENTS IN RETAIL TV TAG EMAIL Utilize new SMARI segmentation by trip type research to inform the “retail” messaging approach and provide a new opportunity for layering deeper messaging into California’s brand advertising

9. Populate VCA.com with a robust offering of time-sensitive reasons to visit in the near-term Current Search: > Festivals > Wine & Food > All Regions (2)

10. Bolstering “Retail” Messaging in Print Content and corresponding calendar of events themed according to SMARI segmentation research

11. Bolstering “Retail” Messaging in TV • Integrate “retail” messaging into California’s “Work” TV spot in Primary Domestic spot markets • Model after Southwest Airlines program • (:20) California brand message • (:10) Retail message • Time-sensitive events that reinforce “Living Large” • More robust drive to the Web site • Stronger call-to-action

12. 2008/09 DOMESTIC U.S. PLAN

13. Create breakthrough impact through a consumer-driven media approachthat gives California the top-of-mind advantage and engages the target audience to drive interest, investigation and visitation. Fiscal Year 2008/09 Overarching Media Objective

14. Fiscal Year 2008/09 Media Strategies Identify individuals with the ability and mindset to embrace the California Attitude and spread the word (‘Brandcasters’). Leverage the media environment to heighten receptivity and response to California messaging. Respond to the economic environment with innovative programs in the Western U.S. Provide year-round support with emphasis on shoulder seasons where there is the greatest need. Stand apart from competitors through bold, distinctive and highly engaging media experiences. Provide opportunities for assessed businesses and DMOs/CVBs to participate in California’s brand advertising program.

15. Understanding The Target Audience

16. Focusing in on the Target 3+ nights spent for Personal/Vacation in hotel/motel past 12 months & HHI $75K+ & don’t live in California CA Attitude (22.9MM, 10.5% US) CA Attitude Brandcasters (19.8MM, 9.1% US) • Brandcasters • Prefer products that offer the latest tech • Like to lead others • Believe they have more ability than most people • Like doing things that are new & different • Crave excitement • Pay more for a product that is consistent with the image they want to convey CA Attitude Brandcasters with HHI $150K+ Culinary Californians (5.3MM, 2.4% US CA Insiders (2.5MM, 1.2%US) CA Attitude Brandcasters who live in Primary Domestic markets

17. Focusing in on the Brandcaster Targets California Attitude • Adventurous and social • Family and community • Sightseeing shoppers Boomers/Late Gen Xers Average age: 45 Married w/ kids in the HH College Educated+ Employed Full-time A/B County California Insider • Arts and activities • Curious and open-minded • Active travelers Culinary Californian • Active and involved • Confident and cultured • Intellectual explorers

18. Media Passion Points California Attitude California Insider Culinary Californian The Weekly Media Diet for all three segments is similar • Read newspaper nearly every day • Watch 23 hours of TV (11 hours of Primetime) • Go online over 3x per day • Listen to 15 hours of radio • Drive nearly 185 miles • Read 3 magazines Television Print Online Source: MRI 2007 Doublebase, heaviest quintile

19. Building A Connections Media Plan

20. MeringCarson Connections Planning Process The Driving Media Idea

21. Living Large The Driving Media Idea Our target audiences are looking for vacation experiences that match their lifestyles. They don’t live a life of unlimited wealth, but they do enjoy the finer things in life, live life to the fullest and want to know they can access a little slice of luxury heaven through their leisure travel. For them, California is luxury heaven. They are fascinated with California and the way Californians live their lives in a youthful, fun, individualistic, open-minded way with an anything goes mentality. “Living Large” showcases the California Attitude and gives the target a taste of what is theirs for the taking.

22. Bringing Living Largeto Life in Television Giada’s Weekend Getaway • Sponsored customized short form :30 or :60 segments about living the California life • Integrated “Smart Tips” California Travel – :60 product integration shorts with commercial adjacency • “Golf with Style: California Style” • :30 minute show featuring Northern, Southern and Central California • Content focus: golf, culture, beaches, nightlife, outdoor recreation, spas, etc. • Opening & closing billboards • :60 vignettes using b-roll from “Golf with Style: California Style” to air during West Coast Swing (Spring ‘09)

23. Bringing Living Largeto Life in Print • Leverage 2007 celebrity “insider” assets to create consumer-centric inserts • Jimmy Smits “cultural insider” 2-page insert featuring a calendar of California arts and cultural events to run in Vanity Fair • Katsuya Uechi “culinary insider” 2-page insert featuring a calendar of California wine and food events to run in Gourmet

24. Up-spending to the Greatest Business Opportunity SEA POR SLC VEGAS DEN PHX Continue to provide national media support to reach the largest number of potential travelers, while adding an overlay of support in the Primary Domestic markets to address the current economic climate and stimulate near-term travel.

25. FY 2008/09 Preliminary Domestic Media Plan

26. Fiscal Year 2008/09 Cost & Delivery • $15.0 million media budget breakdown: • Television: $13.5 million • Print: $ 1.5 million • Est. national target impressions = 1,054,162,000 • Est. national reach = 66.5% • Est. national frequency = 13x • 49% will be exposed 3+ times

27. Side-by-Side Cost & Delivery Comparison FY 2008/09 FY 2007/08 • $15 million media budget breakdown: • Television: $13.5 million • Print: $ 1.5 million • 14 Weeks National Cable (870 TRPs) • 4 Weeks Spot Prime Overlay (240 TRPs) • 26 Weeks Southwest Airlines Spot Overlay • 6 CA Insider inserts across (10) Western Region titles • 1 CA Wine & Food insert across (2) Western Region titles • Est. nat’l target impressions = 1,054,162,000 • Est. national reach = 66.5% • Est. national frequency = 13x • 49% will be exposed 3+ times • $16.0 million media budget breakdown: • Television: $13.2 million • Print: $ 2.0 million • Internet: $ .8 million • 20 Weeks National Cable (855 TRPs) • 12 Weeks National Broadcast (66 TRPs) • 22 Weeks Southwest Airlines Spot Overlay • 6 CA Insider inserts across (4) Western Region titles • 4 CA Wine & Food insertions in (6) national magazines • Est. nat’l target impressions = 1,076,782,192 • Est. national reach = 75.5% • Est. national frequency = 8x • 53% were exposed 3+ times