Empire State Development, the state’s leading economic development agency, has spent more than $75,000 promoting its tweets since October, records obtained under a state Freedom of Information Law request show.
Campbell Ewald, a Detroit-based advertising agency, made the purchases under its two-year, $100 million contract with ESD, which began in late 2015. The firm has since revamped ESD’s website and produced an array of sleek ads with the tagline “Tomorrow Starts Today.”
ESD officials told The Alt that, over the past six months, the agency has redoubled its efforts to reach business executives, commercial real estate developers, corporate site selectors, and other decision makers on social networks like Twitter and LinkedIn as part of a broader commitment to attracting and retaining businesses in the state.
There has been no shortage of scrutiny and skepticism as of late directed toward the state’s economic development efforts. The corruption charges filed in September against former Gov. Cuomo aide Joseph Percoco, nanotech czar Alain Kaloyeros, and other insiders and executives—which the New York Times likened to “a repudiation of the way [Gov. Cuomo’s] prized upstate economic development programs were managed”—have sparked calls not just to scrap the dubious practice at the heart of the scandal (channeling hundreds of millions of public dollars through “private,” state-created nonprofits) but also to rein in or rethink New York’s aggressive business subsidization practices.
ESD was not accused of any wrongdoing and hardly appeared in the criminal complaints, which focused largely on upstate economic development projects administered by SUNY Polytechnic Institute’s nonprofit affiliates. It seemed ESD “was largely cut out of” the Buffalo Billion and various nanotechnology ventures by design, the Investigative Post noted in their recent series on economic development incentives in New York.
In the wake of the scandal, those SUNY Poly affiliates became wards of ESD; good government groups want to transfer responsibility for all state economic development awards to the same auspices. Such moves do not really address this kind of spending’s rationale or scale—$8.6 billion last year, counting state and local sources like industrial development agencies, the Citizens Budget Commission has estimated—and suggest that consolidation of state subsidy programs seems a more likely reform, for now, than retrenchment.
As for the Twitter campaign itself—one facet of what ESD says are essentially continuous promotional efforts—Lisa Barone, an executive with Overit Media, a digital marketing and design firm based in Albany, said the purchases seemed par for the course. (Disclosure: Overit is a partner in The Alt.)
“It wouldn’t be fair to critique their marketing strategy, positively or negatively, by looking at just one component, but it tells me that Empire State Development invests in digital advertising with the same diligence that they and others do with traditional or offline advertising,” Barone said in an email. “Allocating $75,000 of their online advertising budget to Twitter advertising doesn’t appear out of proportion or misplaced—no one would balk at that number if it was a traditional media buy.”
The Alt submitted the FOIL request after repeatedly noticing a sponsored tweet by ESD from October. “Could #Rochester, NY be America’s beet basket?” the tweet asked. “@LoveBeets USA thinks so.”
Love Beets produces an array of beet-related products at a $17 million processing plant at the former Kodak Park. The manufacturing venture, estimated to attract or retain 89 jobs, has garnered several millions of dollars in cumulative subsidies from ESD and a local industrial development agency.
A Love Beets spokesperson said the firm was unaware of ESD’s Twitter campaign, which state officials say entailed the promotion of other tweets, too. A Campbell Ewald spokesperson referred us to ESD for comment.
An April 2015 report by Russell Research, commissioned by ESD, found that the agency’s nine-figure marketing contract with ad agency BBDO—which preceded the current one with Campbell Ewald—increased traffic to ESD’s website fivefold and hastened “a strong positive shift in perceived momentum of New York State’s business climate,” among other benefits.
The next month, the office of state comptroller Thomas DiNapoli offered a different take. “ESD has not quantified what it expects to achieve from its advertising efforts, except in the broadest terms like increasing tourism or creating jobs,” the comptroller wrote. Some lawmakers concurred, though that same month ESD directed an additional $25 million toward the same ad campaign.
Assemblyman Robin Schimminger, a Democrat from Erie County who derided the previous marketing effort as too broad and scattershot, offered a similar take this time around.
“I don’t know that catching the momentary attention of a reader of a tweet is very efficacious, and that calls into question the prudence of this initiative,” Schimminger told The Alt.
The ongoing debate about ESD’s marketing expenses seems to point to a more fundamental question in advertising: absent evidence of direct causation, how do you measure a promotion’s value? The limits of this sort of appraising have cropped up in an unrelated, long-running legal dispute in which an earned-media valuation by Campbell Ewald, itself not a party to the proceedings, figures prominently.
In 2013, the federal government joined a lawsuit against former cyclist Lance Armstrong, alleging that he concealed his breach of his contract’s anti-doping provisions. If successful, under the False Claims Act, the United States stands to recoup up to triple the $32 million the Postal Service paid Armstrong’s cycling team as sponsor from 2000 through 2004.
Armstrong’s legal team has adduced various USPS-backed brand impact studies, including one performed by Campbell Ewald in 2003 that found the sponsorship brought the USPS $31 million in free advertising during that year’s Tour de France, to argue that the government got much more than its money’s worth. (USPS staff once cited these valuations to pacify its board and the public, who at times were leery of the mail carrier’s foray into professional cycling.)
A trial is scheduled for November. A jury will attempt to weigh the benefits and costs of the sponsorship to the government, guided in part by the slippery science of impression-based appraisals. The presiding judge has noted the challenge: “The valuation reports themselves acknowledge that earned-media figures are simply estimates and that industry-wide standards and methodologies might not exist for each type of assessment,” he wrote in February.
Not unlike its bullish attitude toward the state’s economic development spending, which has also raised questions about appropriate metrics, Gov. Andrew Cuomo’s administration has defended ESD’s advertising outlays as effective means of keeping up with other states and vanquishing the idea that New York is hostile to business.
“Connecticut is spending $27 million promoting its state, Michigan $25 million, [and] New Jersey ran a campaign to recruit businesses featuring its governor,” then-Cuomo aide Howard Glaser told The New York Times in 2013. “We have to compete.”