BOARD OF DIRECTORS MEETING November 29, 2017 11:00am – 12:15pm
Board of Directors Meeting Agenda § Opening Remarks § Approval of M inutes from the September 20, 2017 M eeting* § CEO Report § Finance Committee Report § Audit Committee Report § Governance & Nominating Committee Report § M arketing Committee Report § Strategy, Communications, and Public Policy Report § Business Plan Review § Discussion and Q & A § Closing Remarks *Vote Required
Opening Remarks Barbara Richardson Chair, Board of Directors Brand USA
Brand USA Board of Directors Andrew Greenfield Arne Sorenson J ohn Edman Secretary Treasurer Vice Chair Barbara Richardson Chair Daniel Halpern Kyle Edmiston M aryann Ferenc Tom Klein Alice Norsworthy Rossi Ralenkotter Thomas O’Toole
Executive and Senior Management Thomas Garzilli Anne M adison Don Richardson Chief M arketing Officer Chief Strategy & Communications Officer Chief Financial Officer Chris Thompson President & CEO Karyn Gruenberg Stanley M attos Aaron Wodin-Schwartz Carroll Rheem Cathy Domanico Tracy Lanza Senior Vice President Vice President Vice President Vice President Vice President Vice President Partner M arketing & Operations Public Policy Research & Analytics Global Trade Integrated M arketing Strategic Alliances Development J ake Conte Brian Watkins Director, In-House Counsel Director, Information Technology
Item 1: Approval of Minutes Barbara Richardson Chair, Board of Directors Brand USA
Item 2: CEO Report Chris Thompson President & CEO Brand USA
Item 3: Finance Committee Report Barbara Richardson on behalf of Arne Sorenson Chair, Finance Committee Brand USA
Brand USA Finance Committee Arne Sorenson Chair Barbara Richardson J ohn Edman Daniel Halpern Tom Klein
FY2017 Finance Presentation Donald Richardson Chief Financial Officer Brand USA
Highlights • Travel Promotion Fund § We have met our FY 2017 match goal of $100M and have already met $44.4M of the FY 2018 ESTA match goal of $100M . • Partner Revenue We beat our total partner revenue goal by $2.2M for a total of $114.2M ! § Partner Cash Contributions • We received $53.1M in partner contributions ($1.9M less than FY 2017 Budget). § In-Kind Contributions • We received $58.1M in in-kind contributions ($8.1M more than FY 2017 Budget). • Partner Programs • We generated $3M through Sponsorship revenue and Partner Programs ($4M less than FY 2017 Budget). • Expenses § Expenses were $9.8M below budget for FY 2017, primarily due to a shift of strategy and timing differences in M arketing expenses. • Cash Flow § Cash flow remains strong and is 80% above the reserve requirement of $40M as of September 30, 2017.
Item 4: Audit Committee Report Kyle Edmiston Chair, Audit Committee Brand USA
Brand USA Audit Committee Kyle Edmiston Chair Thomas O’Toole Andrew Greenfield Tom Klein Alice Norsworthy
FY2017 Audit Update Donald Richardson Chief Financial Officer Brand USA
FY 2017 Financial Statement Audit Update • KPM G has not raised any issues related to the audit. • KPM G is scheduled to complete its final fieldwork on December 20, 2017. • The draft audit report will be issued by January 31, 2018.
Item 5: Governance & Nominating Committee Report Andrew Greenfield Chair, Governance & Nominating Committee Brand USA
Brand USA Governance & Nominating Committee Andrew Greenfield Chair Thomas O’Toole M aryann Ferenc Daniel Halpern
Committee Designations Recommended • The board chair and the committee members discussed leadership elections and the vacancy of the M arketing Chair (with the election of Barbara Richardson to board chair). • The discussion took into account public vs. private backgrounds and potential vacancy/appointment issues. • The committee recommends • Andy Greenfield – Secretary • Arne Sorenson – Treasurer • John Edman – Vice Chair through the calendar year, and to be reappointed as vice chair should he be selected for another term • Kyle Edmiston – Vice Chair • Alice Norsworthy – M arketing Chair
Items 6-9 Marketing Committee Report Barbara Richardson Chair, Marketing Committee Brand USA
Brand USA Marketing Committee Barbara Richardson Chair Rossi Ralenkotter J ohn Edman Kyle Edmiston M aryann Ferenc Alice Norsworthy
Item 6: CMO Report Tom Garzilli Chief Marketing Officer Brand USA
Preliminary Year-End Results and Major Milestones • Revenue/ Development: • $637 million in contributions since 2012 • 7 th consecutive year of earning 100% of matching contributions • Highest average contribution per partner in FY2017: $670k per contributing partner • M aintained 90+% Partner Retention • Innovative M arketing • National Parks Adventure and America’s M usical Journey giant-screen films • New and exciting programs (e.g., BBC, Go USA TV) • Expanding and enhancing global trade and international representation
BREAKER TITLE IS ALL CAPS Item 7: FY2018 Marketing Strategy
One Big Welcome With over 3000 assets submitted from a wide variety of destinations, we are thrilled with the industry response to the One Big Welcome initiative. From home-towners to restaurateurs to governors, the stories our DM O and CVB partners shared are personal, diverse and truly show the warmth of the American people. Assets will be featured in paid, earned and owned media beginning in January/ February 2018.
Improved Search & Site Performance Industry Recognition Improved SEM 40% 110% CPC CTR reduction rate 70% Travel Weekly M agellan Awards increase in traffic to site • Gold: Overall Destination / Family Destination • Gold: Overall Destination / Adventure Destination Web M arketing Awards Higher Engagement Without Sacrificing Volume • Outstanding Achievement: Best General Interest Site
Experience is Everything Brand USA focuses on storytelling because we know the best way to move people — both literally and emotionally — is by showcasing the exceptional, diverse and real experiences found in our destinations. From dreaming to consideration to booking to traveling and sharing their experiences with others, we reach consumers at every level of the tourism cycle. But it all starts with inspiration…
Show don’t tell "Video is growing and will only get bigger because people are visual by nature.” 1 Some remarkable stats 2 … • The number of hours people spend watching videos on Y ouTube is up 60% year-over-year • China’s 450 million online video viewers watch 5.7 billion hours of vids every month • 100 million hours of Facebook videos are watched every day. • Over half of video content is viewed on mobile. • 92% of mobile video viewers share videos with others. • Social video generates 1200% more shares than text and images combined. • Viewers retain 95% of a message when they watch it in a video compared to 10% when reading it in text. Source: 1. http://www.bbc.com/news/business-35767893; 2. http://www.wordstream.com/blog/ws/2017/03/08/video-marketing-statistics
2018 Screen Vision
2018 Screen Tactical Approach Mobile Laptop/Desktop Smart TV Digital OOH Giant Screen Thumb-stopping and Serves as a portal to trip Caters to “lean back and Immerses audiences in Connected media delivers snackable content is planning with multimedia watch” behavior with longer-form “mini- engaging, experiential content everything (inspiration) videos (info and itineraries) personalized playlists in situ movies” (thematic)
2018 Communication Objectives Though we’re embracing an evolved storytelling strategy, our media strategy continues to focus on awareness, consideration, booking support and engagement. Our goal is to take advantage of the “ trackability” that digital platforms have over traditional outlets, and whenever possible to connect the dots across platforms to identify business impact. Channel and tactical selection will be based on market goals.
Mobile: Co-Branded Initiative w/Expedia Binaural audio will help us immerse travelers in the sights and sounds of the USA. Creative not final. Directional only.
Giant-Screen Films Our Most Effective, Most Immersive, Most Enduring, and Highest-Value Marketing Platform • Touches all of our strategic foundational elements • Create Innovative Marketing • Market the Welcome • Build & Maintain Trust • Add & Create Value • Drive Results • Inspires and drives visitation And we own the entire asset and its components in perpetuity
National Parks Adventure Two-Year Review Globally, over 7 million people have watched the film (4 million in international markets) • The trailer has generated over 100 million views • China streaming (as of 6/ 17) has reached1.23 million views • Highest grossing documentary film of 2016 • 2017 Brand Film Festival Award for Best Film by a Brand • 100% on Rotten T omatoes/ T omatometer • 81% of viewers more likely to visit the USA • Currently showing in 46 international cities • Global launch on Netflix February 1, 2018
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