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Ocean City

City might go retail with web

(Aug. 16, 2013) The frequent conflict between the Ocean City government’s role as the resort’s premier marketing agency and as its sovereign administrator will likely be brought to the fore again in the coming weeks, as the city continues to investigate a proposal to add advertising and price-tiered listings to its municipal tourism website, ococean.com.

At the direction of the city’s Tourism Commission, a survey will be sent to members of the city’s Convention and Visitors Bureau, as well as the Ocean City Hotel-Motel-Restaurant Association and the Greater Ocean City Chamber of Commerce, to gauge interest in the proposal.

But the core issue is not one of efficacy, but of principle – as to whether the city should be using a taxpayer-funded website to sell a product that competes with private advertising media and places some businesses above others on the official online face of the city.

“You’re going to get push-back from some businesses, I think,” said HMRA Executive Director Susan Jones. “They feel this is a government site and everyone should be represented equally.”

But Mayor Rick Meehan found a pay-to-play system just as equitable.

“Those who are proactive and want to better their position will have the opportunity,” Meehan said. “The ones who are successful will rise to the top. It’s just like any other business.”

Currently, a $200 membership to the town’s CVB gets hospitality businesses a listing on ococean.com’s categorized, searchable index. The listing features a limited number of photos, text, and link to go directly to the businesses’ website. Ococean.com is owned by the city and administered by the city’s advertising agency, MGH.

But some business owners have expressed a desire to have a larger presence on the site and would be willing to pay for it.

This week, MGH came back to the city with a proposal on how such a system could be structured, suggesting that four tiers of listing be used. The first tier – available with the standard CVB membership or even at a reduced fee – would be text-only.

“This would be for some of the smaller members or those who have hesitated to join the CVB,” said Alison Fiorelli of MGH. “We’re hoping this simplified listing would encourage them to join.”

Second and third tier listings would have photos and space to promote deals, as well as being run above lower-tier listings. Third tier listings would also feature banner ad rotation. Fourth-tier listings would have further expanded space, a guaranteed top-billing space, and heavier rotation of advertising.

“They’d have the opportunity to kind of own that section of the site,” Fiorelli said.

The average ococean.com listing garners 10,000 impressions and 660 actual click-throughs, coming out to roughly two cents per impression and 30 cents per click. This is comparable with many open-market advertising rates, although what the city would be able to charge in addition for expanded listings or advertising has yet to be determined.

“The biggest problem would be figuring out your prices,” said MGH President Andy Malis. “It’s going to be a guess. It will change the way [the site] is in terms of how its presented.”

Jones said she had reservations, however, that those with more capital would monopolize a website designed to promote the entire resort, not a select few venues.

“The people who can afford to advertise are at the top, so the visitors are going to see who’s higher-priced and not the ‘mom-and-pop’ places,” Jones said. “Which probably isn’t the best course given that we already have a reputation for high rates.”

Councilman Joe Mitrecic suggested that the top-tier listings not have a guaranteed place at the head of the search results, “so there’s nobody who’s always at the top of the mountain, so to speak.”

If the city were to create a price-tier system for ococean.com, however, the further question would be whether the city would be undercutting private businesses who also run advertising-supported tourism sites.

“I’m not opposed to it on face value, it just depends on all the particulars,” said John Gehrig of D3 Corp, which owns and runs several tourism and hotel booking websites.

“It isn’t so much that businesses shouldn’t be able to promote themselves, it’s about it being an equal opportunity for everyone,” Gehrig said. “If every hotel wants to have a featured listing, then you’re back to where you started, you’re just charging more. And you can’t say that only 10 hotels are going to be on the top tier, for instance. A private organization could do that, but we’re talking about a municipal website that’s funded by taxpayer dollars.”

“As long as it doesn’t change the mindset of the town, it can make everyone better,” said Ann Hillyer, whose website – oceancity.com – hosts hotel bookings and event listings, as well as the online edition of this newspaper.

“But in some places it has been a problem,” Hillyer said, particularly in regards to her annapolis.com website. “In Annapolis, I’m finding the CVB there feels competitive with me, so then it becomes and issue.”

According to City Solicitor Guy Ayres, “there’s nothing that prohibits the city from having a proprietary enterprise.”

“It’s when they are performing a government service and they charge more than the cost of the service that it can be considered a tax,” Ayres said.

However, if ococean.com were to be less of a public service for the CVB and more of a paid advertising site, the city could likely make the argument that the site is not a strictly governmental function.

“The downside of a municipality doing something that’s not entirely governmental is that you can’t claim immunity from liability,” Ayres said. “That determination depends on whether the function is a regulatory scheme that you charge for, or a separate proprietary function. In some cases, that simply boils down to whether you’re charging more money than necessary to run it.”

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