Print media and advertising outside of Ocean Pines on directors’ list for reductions

By Josh Davis, Associate Editor

(Feb. 8, 2018) The theme of Ocean Pines Board budget meetings this week, according to Association President Doug Parks, has been “controlling costs this year to address the deficit.”

The community reportedly accumulated more than $2 million in operational losses during the previous two fiscal years, largely driving a projected $30 hike in annual assessments.

On Monday, during the first of three scheduled days the board was to review General Manager John Bailey’s proposed fiscal 2019 budget, much of the focus was on $126,055 for general marketing and promotions.

The figure was slightly lower than what is forecast for the current fiscal year, $126,773, and 2017 actuals, $130,858.

Director Slobodan Trendic said overall operating expenses budgeted last year were $11.6 million.

“Fast-forward to this budget we’re discussing now, its $11.7 million. We are running into a million-dollar deficit for the year … yet we’ve reduced no expenditure whatsoever from year to year,” he said. “As a board and as a business executive you’re looking and saying, we’re not getting the message.”

Trendic specifically highlighted the marketing budgeting, including $23,200 set aside for radio ads, $25,000 in television commercials and $45,000 for newspaper and magazine ads.

“I can see the value for some, but not all of this. This is the year we basically start putting something like this on hold,” he said.

Director Tom Herrick wondered how much of the marketing effort was aimed outside of Ocean Pines.

“I was watching the NFL … the other night and multiple times there was a commercial promoting, on television, indoor pickleball,” he said, adding the pickleball courts were often crowded as it is. “I’m wondering what the return on our investment [is] … especially on a TV spot, multiple times during one show.”

Parks agreed the marketing focus should be narrowed.

“We have the kind of data that says 87 percent of the utilization of an amenity is by members of the association, so do we really care about the other 13 percent?” Parks said. “If we’re spending this amount of money for arguably a small percentage of folks that would take advantage of the things that are being marketed, then I would have to ask is that a smart investment?”

Director Ted Moroney said the $126,055 line item did not tell the whole story.

“When I go to the golf tab, it [shows] $70,000 in promotion. That’s not part of this [marketing] budget. And when I go to the yacht club, there’s another $40,000 or $50,000,” he said. “This promotion and public relations budget, when you put everything together, is a hell of a lot bigger than what we’re talking about.”

Association Vice President Cheryl Jacobs argued advertising outside Ocean Pines, especially to promote weddings and large banquets, was worthwhile.

Director Pat Supik said advertising for the community at large “does keep Ocean Pines out there as a certain kind of community,” raising property values and the potential for resale.

Moroney, however, wondered whether print advertising in general was a good investment.

“I think if you talk to most people who are doing advertising now, print is dead,” he said, adding the target of any marketing should be to create revenue – not prestige.

“I’m less concerned about if we feel good and more about how can we drive a golfer, drive a wedding, drive somebody showing up at the yacht club,” Moroney said. “You’re looking for return on investment.”

Bailey agreed many were moving online, including, apparently, his 95-year-old mother who recently got a new iPhone and is learning how to text.

“Society has moved more towards the digital format than print, [but] we’re not, as a society, there yet where we can just ditch it all,” Bailey said.

Parks asked Bailey to “go back to the marketing folks and say, ‘how creative can we be with regard to reducing the marketing budget without affecting the operation?’”

He also asked Bailey to pursue additional synergy in marketing and “trying to reduce costs temporarily this year.”

Additional board budget work sessions were held on Tuesday and Wednesday.

A budget hearing for membership is scheduled on Saturday at 10 a.m. inside the Tern Grille.

Passage of the 2019 fiscal year budget is scheduled to occur during a regular board meeting on Sunday, Feb. 25 at noon, in the Assateague Room of the community center on 235 Ocean Parkway.