Marketing Optimization Modeling. Theme Park Case Study. Overview and Disclaimer. The following is a real case study from a regional theme park. Data, labels and brand names have been masked to preserve confidentiality. Situation.
Theme Park Case Study
Outdoor, Print, Radio, Magazines
Maximum Daily Temperature
Special “Themed” Events and Programs
Weekly average pump price
Auto Fuel Prices
Daily park attendance as affected by media, promotional events, pricing, weather, holidays, and fuel prices.
Month and Day of Week
Attendance paid price
Holiday Lights TV
Annual special holiday event TV adv., Nov 24-Jan 4
For the past year, total media, including Holiday Lights, drove 13.8 percent of total attendance at the park. “Themed” Promotional Events were responsible for driving 2.8 percent of total attendance. The largest contributor was print media, followed by Holiday Lights TV
Total park attendance for the year was basically flat at -0.6 percent. Improved performance from Events and Promotions and Print media were the largest positive contributors for the year. Cooler weather, a 25% increase in fuel prices and a -91% reduction in radio advertising were the key negative contributors year-over year.
Park attendance is highly seasonal, with peaks occurring in Spring (April) and an uptick in the early Fall (October)
There is a recurring pattern of attendance for days-of-the-week. Attendance peaks on Thursdays due to regular 25% admissions price discounts.
On a dollar-for-dollar basis, radio and print are the most responsive media forms, with magazine and outdoor being considerably less responsive.
Monthly Spending $000
Raising the gate admissions price from $10.00 to $10.50 cost the park about -3.7% in daily attendance
Rising auto fuel prices impact attendance at the park and pose a future risk to increasing attendance. This effect is of slightly greater importance than that of gate prices.
Average Pump Price for Regular Self-Serve
Short-term weather conditions of temperature and precipitation have a profound impact on daily attendance at the Theme Park.
Maximum Daily Temperature
Special park theme events have played an increasingly important role in driving incremental attendance at the park. Easter and Holiday Lights events were of particular importance. Over the past year, average attendance gains from these events more than doubled.
Incremental Daily Attendance
Because our models were built from individual media vehicles used, we are able to isolate the effects of each media vehicle. In the past year, 35 percent of the media vehicles generated greater than $1 break-even revenue. This compares unfavorably to the past year, when 65% of the media vehicles generated greater than $1 per dollar investment. Cutting radio advertising in the current year eliminated one of the most efficient and effective media vehicles.
Radio and print media stand out as generating the most incremental attendance per dollar investment.
When comparing the investment in the four media, we see that OOH and Magazines generate proportionately less attendance than their share of spending, while Holiday Lights, Radio and Print media generate more. Thus our optimized solution calls for more spending for Holiday Lights, print and radio and less for the other media. At constant total spending, this shift to a more efficient media mix is estimated to generate +13 percent higher total attendance.
Presently, the park’s marketing generated about $1.56 in revenue per dollar of marketing investment. This above “break-even” productivity can still be maintained up to +20% of current spending levels. Still, the dilemma is that this $1.56 impact was a -22% decline from the prior year and strongly supports an effort to improve and optimize spending efficiencies going forward.
Revenue per $1 media investment
The current media plan does not begin until April, is heavy on outdoor advertising and
has about a 10 week hiatus in the Fall.
The optimized plan calls for more spending on print, radio and Holiday Lights advertising.
Overall, compared to the current plan, each media is placed into more total weeks and
advertising begins three weeks earlier than the current plan.
Optimal Spending Strategy estimated to result in about a +9.3 percent gain in daily attendanceTheme Park: Projecting Results of Optimal Media Spending
To address the stagnant attendance trends for the park, our solution calls for an optimized
spending plan as outlined below. This includes the benefits from optimizing media schedul-
ing. The opportunity points towards a+9.3 percent growth in attendance without the require-
ment of spending incremental marketing funds.
Change in Daily Attendance
R2 =96.2%, Holdout R2= 87.9%, MAPE=+/-8.7%
Michael Wolfe, President
Bottom-Line Analytics LLC