Welcome to the Multimillion-Dollar Business of Selling U.S. Cities – Next City

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Welcome to the Multimillion-Dollar Business of Selling U.S. Cities

In the world of place marketing, a pretty logo and a catchy slogan don’t cut it.

Story by Valerie Vande PanneTwitter

Photography by Paul Gargagliano

Published on Nov 28, 2016

What do you do when you live in or run a business in a small or a midsize American city that many people have heard of, but few people ever really think about? You know that if more people knew about your city they would like it, but there’s no Associated Press bureau in town and few national reporters, and influencers haven’t caught on.

How do you tell the nation, and the world, your story? How do you even determine what your story is?

This is the situation the business community of Chattanooga, Tennessee, found itself in. Its Chamber of Commerce turned to what is, perhaps, the most obvious solution: They hired a public relations firm.

Then they paid the firm to bring the journalists to them.

Most reputable media outlets strictly prohibit reporters from accepting such trips from marketing agencies, though many editors and journalists receive offers of such excursions weekly, if not daily.

But when Next City received an invite from DCI (Development Counsellors International) to visit Chattanooga, we thought it was the perfect opportunity to ask questions: What happens on these trips? Who goes on them? What’s the point? So we accepted, and were plunged into the world of place marketing.

The Firm

“Do you know where the fastest internet in the Western Hemisphere is?” asks Keegan Calligar, account manager at DCI. I guess San Francisco.

“Chattanooga,” she answers, and then she’s off on a barrage of information about the city, oozing with enthusiasm.

Her job, of course, is to sell it.

DCI bills itself as the first marketing shop to realize that places could — and should — have a pitch, and that the pitch had to go beyond a few signs or a slogan repeated by local rotary type folks. “The calf won’t brand itself,” says Andy Levine, president and chief creative officer of DCI.

Levine’s father, Ted, started the company in 1960. Since the days of DCI’s first office in New York City, it has represented some 450 different cities, states, countries and regions around the world. When the senior Levine chose to focus exclusively on place marketing, he was perhaps sensing the changes that had begun to reshape local economies and would only become more dramatic in the coming decades.

In 1960, most U.S. cities still had manufacturing sectors that, if not quite thriving anymore, at least still generated a fair number of jobs. By the 1970s, industry had dwindled and cities found themselves seeking other sectors for their financial lifeblood, says Bryant Simon, author of the book Boardwalk of Dreams: Atlantic City and the Fate of Urban America. “Places were really struggling for tax revenues,” he explains. “They needed other ways to make money.” Urban areas began to turn to other industries, such as tourism and conventions, to shore up their tax base.

But then another shift happened: From the 1980s through the 1990s and 2000s, familiar chain stores increasingly moved into cities.

“Much of place marketing is a response to a growing monoculture in the United States,” says Simon. “That monoculture creates desire for something unique and authentic. What place marketers do is try to communicate to people what’s unique about a place in an increasingly same world.”

Hence, identifying and promoting what’s different about a city is big business for companies like DCI.

A view of Chattanooga from the the far bank of the Tennessee River

It’s easy to see why Chattanooga would hire DCI: It’s a one-stop shop for place marketing with two distinct sides: tourism and economic development. While the two sometimes work together, it’s the economic development side Chattanooga’s Chamber is interested in — creating branding campaigns, marketing “blueprints” and target websites geared to people making site selection decisions. The company’s “placemakers” survey corporate executives about what they’re looking for. They research potential businesses that might be a good fit for a city or region — “lead generation.” They develop digital ambassadors, with some regions having as many as 125 curated local volunteers who circulate DCI’s pre-planned posts to all their personal social media accounts.

Calligar says DCI helps places “make sure the audience sees what they need to see.” That can mean a ghostwritten post about a local development popping up on the Facebook feed of a civically engaged acquaintance, or a website about city attractions that changes based on the location you’re logging in from.

For the journalists on DCI’s Chattanooga tour, it means a packed itinerary of 14-hour whirls through the city’s brightest and shiniest locales, where every detail is planned down to the minute, and interviews with people not on the tour are discouraged.

On our way to visit an aging park about to undergo renovation as part of an “innovation district” redevelopment, I sidle up to Sybil Topel, the Chamber’s vice president of communications, and ask her why the Chamber paid to bring me and the other journalists to see Chattanooga. Topel is a former journalist who worked for United Press International. She says tours like these are crucial to Chattanooga’s plan. Pointing to shrinking newsrooms and the lack of national media outlets and journalists based in Chattanooga, she says, “few people have the time to do real research and dig up stories. That’s the business argument for DCI. We’re trying to fill a gap.”

It’s a gap that represents a large market. State and municipal budgets for marketing vary wildly, but are often sizable. For tourism, Levine says budgets can run in the millions of dollars — $5 million to $10 million annually for a larger city. The state of California, says Levine, has an annual $100 million dollar tourism budget. Most major cities have their own multimillion-dollar tourism and convention boards, but also contract specific projects to outside groups.

On the economic development front, marketing costs are traditionally smaller as localities are appealing to a much smaller market — CEOs and the high-level executives who make decisions on where to locate a business or factory. The cost, says Levine, generally ranges from $500,000 to $1.5 million, adding that’s just annual marketing hard costs and doesn’t including staffing — for example, a local Chamber’s staff time. In the Chattanooga Chamber’s case, they say they’re spending, annually, $2 million to $3 million on economic development. DCI is a part of that budget. Both DCI and the Chamber declined to specify how much their annual contract is for.

“Communities see the benefits involved in attracting more tourists, more revenue,” says Levine, who joined the family business in 1991. “They’ve awakened to the concept that this is a good thing for our community. It’s gotten a lot more interest today than it did 10 to 15 years ago.”

“Most place branding is done quite poorly,” he adds. “My big soapbox is that in most cases, there is a great interest in developing a logo, tagline, and plastering it. My experience suggests that’s not the most cost effective way to brand a community.”

“Your impressions of Chattanooga are formed … based on others, what you’ve heard, what you’ve read, credible third parties, friends, your college roommate.”

The most successful branding, says Levine, is “from reputable third parties, so a brand or a logo or a website, those are important, but they don’t move the needle.”

Case in point: The state of Rhode Island spent $550,000 on a new logo earlier this year, and the response was swift and overwhelmingly negative. The tag line, “cooler and warmer” (created by Milton Glaser, well known for the I Love NY logo) received national ridicule, and Governor Gina Raimondo pulled the campaign just days after launch.

In the corporate world, says Levine, the second most important source of information after one’s personal network is articles in newspapers and magazines. “Let’s say Denver gets the Wall Street Journal to write a good story, that’s the Wall Street Journal writing a great story — that’s credible. Getting others to tell your story is more authentic and really more effective.”

And vastly more cost effective: A full-page ad in the New York region of the Wall Street Journal costs nearly $60,000. Consider that next to the cost of flying in a handful of journalists, putting them up in a decent hotel for two nights and giving them a few meals. While those costs obviously vary, the math, however squiggly, shows a significantly higher impact and ROI. Add in the unpaid city champions/digital ambassadors, and you’ve got a cost effective and reputable campaign.

Jason Koebler was one of the tech journalists on my Chattanooga trip. A staffer at Motherboard, he didn’t accept DCI’s airfare and hotel accommodations — Motherboard paid for that. “I don’t love press junkets,” Koebler told me, “but this one made sense. I had been writing about municipal fiber for years, and every time I talked to anyone they said Chattanooga had the gold standard. So when [DCI] reached out, it seemed like a good opportunity to go.”

For Koebler, the best part of the trip was the access to the municipality-owned utility that operates its fiber network and to the politicians. “I would’ve loved to spend more time there to explore the digital divide. I don’t think they glossed it up too much, and I do think I got an accurate picture of at least a subset of people.”

For DCI, the campaign won’t end when Koebler’s article and those of reporters on the trip go live. DCI has been working with the Chattanooga Chamber since 2003, and Levine estimates it takes two years of a solid place marketing campaign to see “ the needle move.” Total turnaround? With a well-done program, a city could have it done in 10 years, he says.

But that’s if they get the story right.

“If I’m a community looking to attract investment, I can’t just say we have a great quality of life, because there are 3,000 other towns with that,” Levine says. “In Chattanooga, saying you have the fastest internet access in the U.S. to the right company, that’s powerful.”

Some cities know what their stories are when they reach out to DCI. Others have no idea, but they think they want to be the next Silicon Valley, an approach DCI discourages. Chattanooga already had its fiber network underway and the foundation of “Gig City” branding set when the chamber turned to DCI to make the network’s launch a national story.

“We’re good at telling the truth,” about a city, says Levine. “We can’t make a green city blue, but we can make it the prettiest green possible.”

The Narrative

There’s a story everyone tells about Chattanooga that you’ll hear, repeatedly, from locals. It goes something like this: In the 1960s, Chattanooga was a smokestack town, and Walter Cronkite called it the dirtiest city in America. That was the wake-up call, and local business leaders set their own air quality standards, and now Chattanooga is one of the cleanest cities in the nation.

You’ll also hear how Outside magazine ranked Chattanooga the “best town ever.” Rafting and rock climbing are pointed out repeatedly. Others spoke of how the city is a mix of old Southern money, suburbanites and hippies, who all somehow get along. Other common narratives include that the state is decidedly Republican red, but Chattanooga’s mayor is a Democrat.

When the journalists arrived at Chattanooga’s airport (filled with “Gig City” banners, and advertisements for locally based businesses, all in the same light blue), we were met by Calligar and DCI’s Kristyna Bronner. There were five journos total, mostly from tech outlets. We were handed our detailed-to-the-minute itineraries. The Chamber’s website and database administrator Eric Lisica, a charismatic Croatian-American who can rap, picked us up in a white van.

The tour began immediately, with talk of $800 million in downtown development, turning old buildings into co-living suites, co-working spaces and startup incubators. Lisica pumped Chattanooga’s convenient location: an hour and half from Nashville, two hours to Birmingham, Atlanta or Knoxville, and eight hours to New Orleans. In six hours, he says, he can be on a Gulf Coast beach.

All of the narratives about contemporary Chattanooga are peppered with raves about the super-fast internet.

Throughout our intense itinerary, these messages and more were repeated everywhere we went, from their municipal power company’s control room to their Chamber mixer, meetings with business leaders including Ted Alling of Lamp Post and Mickey Cloud of VaynerMedia, and visits to Branch Technology, using a 3D printer to print homes, and at a startup showcase that felt more like being inside an episode of HBO’s Silicon Valley than in an historical theater in downtown Chattanooga. Tech vibes even play into the marketing of Miller Park, the soon-to-be remade park we visit. On the day we stop by, the city-owned space — the first downtown public park, built in 1976, in the modernist style of the day— is beautiful, peaceful, but unkempt. People lounge on park benches around a waterfall fountain while trash blows across browning grass. Across the street is a bright new private park, the hub of Chattanooga’s startup week. The planned facelift intends to connect the old park to the new, elevating the space to street level and installing a cafe patio where workers can tap on their laptops while looking out to a revitalized green lawn. Our tour guide explains that the redeveloped park, which has a reputation as a place where homeless people gather, will be “safer” than what is there now.

Simon says that place marketers often package complex histories into simple stories. “It’s like marketing the blues in Chicago,” he says. “Most people don’t wanna go to a blues club in Chicago and be steeped in a story of race and housing. But they are the moment they walk in.” Slavery and redlining are a part of the music they came to hear, he says, but it’s easier to just tell the story of a great blues bar.

UNIFYING THE NARRATIVE

Chattanooga does have the fastest internet in the Western Hemisphere. Now, they are battling to take their 10-gig service to the rural communities surrounding them. It was pointed out multiple times that while Chattanooga is super-fast, one county over people still use dial-up or their phones as a hot spot, or go to McDonald’s to use the WiFi.

“We’re in a political battle with multiple attacks on our municipally owned network,” Chattanooga Mayor Andy Berke told our group during a meeting at the Edney Innovation Center. “There are people who say government shouldn’t be in business of providing broadband. The question is: Is internet a luxury or a necessity?” Berke sees “The Gig,” as the service is called, as an opportunity to use tech to build equality and fairness. “I don’t want [locals] thinking tech is for 24-year-old white guys,” says Berke.

Chattanooga Mayor Andy Berke atop the Edney Innovation Center
 

“The country as a whole has to invest in rural communities, just like it did with phone and electric,” Colman Keane, director of fiber technology at EPB, the public utility that owns the fiber network, told us during a breakfast meeting at their control center. Not exactly slogan marketing from Keane and Berke, but it was messaging the tech journalists were interested to hear.

The biggest thing Charles Wood, vice president of economic development at the Chattanooga Chamber, wants to get out of the economic marketing is for CEOs to say nice things about Chattanooga. Moving their businesses to Chattanooga is great — but even if they don’t decide to move their business there, if they’re saying nice things to their friends, there’s a good chance another CEO is listening and will make the move.

“Everyone’s in competition,” says Wood. “We compete every day for talent and business. Dozens of companies have to move every day. There are 5,000 economic development organizations across the country.”

One city known for its economic development marketing in recent years is Pittsburgh, where the marketing is handled almost entirely within their Allegheny Conference on Community Development. “We think about how the region is branded to attract and retain businesses and talent,” says Catherine DeLoughry, the organization’s senior vice president of public affairs. The Allegheny Conference also acts as the parent organization of the Pittsburgh Regional Alliance, Greater Pittsburgh Chamber of Commerce and Pennsylvania Economy League of Greater Pittsburgh.

Bill Flanagan, chief corporate relations officer at Allegheny Conference, stresses the importance of collaboration. “What made a huge difference in the perception of Pittsburgh was we hosted the G20 in 2009. That brought over 3,000 reporters to Pittsburgh, and we had the opportunity to tell the Pittsburgh revitalization story.” It’s where, he says, the power of a shared narrative through a collaborated effort across civic agencies, from city government to anchor institutions and philanthropies, can be highly effective. More than 7,000 stories were generated about Pittsburgh as a result of the G20 summit, and a ripple effect continues to lead to additional stories. “We’ve been able to keep people working together, driving the story. It’s been very effective for changing perspective and awareness of Pittsburgh.”

This idea of a shared narrative is true in Chattanooga too. DCI isn’t behind the “Gig City” moniker, but it’s something local business leaders agreed on, together.

Another example of how a powerful story can shape a city’s national profile can be found in Detroit, where civic boosters and local institutions have coalesced around a story of downtown rebound underwritten in large part by the city’s self-appointed billionaire patron and chief downtown developer, Quicken Loans founder Dan Gilbert. The story of “Opportunity Detroit,” as Gilbert has dubbed it, fills a void left by the city, which, two years emerging from bankruptcy, has no official marketing plan in place and few extra resources to dedicate to public relations. Five years after Gilbert landed on his two-noun tagline, Googling the phrase turns up 23,000 results, including a 3,500-word New York Times feature that appeared in the business section of the newspaper’s print edition.

A concert in Miller Plaza Pavilion during the city's startup week
 

Yet Gilbert’s narrative leaves locals asking: “opportunity for whom?”— a part of the narrative rarely making it into Detroit comeback stories. The city has seen the water shut off in 70,000 households since 2014, and its public schools are failing dramatically. Detroit’s population continues to decline.

Chattanooga, for its part, realizes it has issues to face, and civic leaders will be the first ones to tell you about them. Conscious of the shift brought with technology, Wood is thinking about the city’s education plan, Chattanooga 2.0: “How are we gonna invest to make sure our kids have opportunity? Right now a black child is 33 times more likely to be in a substandard school. Funding itself isn’t the determining factor in performance. We have dramatically different outcomes, so part of 2.0 is looking at why.” Chattanooga is 35 percent African-American.

And while the median housing cost is about $157,000, how does a city with a burgeoning tech industry keep housing affordable for all? While the city isn’t spending money directly on affordable housing, it is offering tax abatements to developers who make at least half of new housing affordable by HUD standards. These rents cannot exceed 30 percent of low-income limits set by HUD for Hamilton County — about $850 for a one bedroom and $1,100 for a two bedroom, max. In 2014, 193 of 586 new units were built with the abatement.

Part of the push for more affordable housing stems from a shift in migration patterns. While other smaller communities and rural areas find it difficult to keep young people from leaving, Chattanooga has seen the pattern reverse.

Wood credits the change to startup culture — and a local narrative shift. In other words, the Gig City story is resonating. Chattanooga is going from being a place you leave to a place that’s hard to leave.

“How a city sees itself says a lot about a place,” says Berke. “Twenty-five to 50 percent of my job is sales,” he adds with a smile. “The marketing is done by the Chamber. I’m the person they wind up to talk to people like you.”

Our features are made possible with generous support from The Ford Foundation.

Valerie Vande Panne is a freelance journalist based in Cambridge, Massachusetts. Her work has appeared in Columbia Journalism Review, Politico, and The Boston Globe, among many other outlets. She is the former editor of Detroit’s alt-weekly, the Metro Times.

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Paul Gargagliano is a Philadelphia-based freelance photographer. Brooklyn born and bred, he studied photography at Oberlin College. His work ranges from photojournalism with an urban bent, to wedding and event photography with Hazelphoto.com.