Atlantic City Places $20 Million Bet on Younger, Hipper Crowd

Mike Russell | April 14, 2014 | More Issues
City's marketing strategy is counting on social media, sand sculpting, free concerts on beach to help show AC is about more than gambling

Atlantic City
As Atlantic City’s “Do AC” campaign enters its second year, the Atlantic City Alliance, a casino-funded marketing group, is refocusing its message, promoting specific events it hopes will pull in more tourists rather than emphasizing AC as a clean and safe place to visit.

Atlantic City, meanwhile, is still struggling to find its feet.

Entertainment and food revenue leveled off in 2013, according to the ACA’s 2014 report, after increasing for the previous four years.

Casinos continued to lose money, although at a slower rate.

And 2013 revenue was flat, or at least posted a very modest gain, which Liza Cartmell, president of the ACA, blamed partly on Hurricane Sandy. Cleanup from the storm, which hit the city at the end of 2012, lasted well into 2013. A bitterly cold, snowy winter also kept potential visitors at home.

“It’s been a tough year for the region,” Cartmell said, and for Atlantic City.

The ACA spent $20 million dollars on its 2013 “Do AC” campaign and will spend another $20 million this year, trying to sell tourists — especially a younger crowd — on the idea that there’s more to Atlantic City than gambling.

Like what?

The campaign will bring well-known DJs to the city’s clubs, and put together foodie events, like the Boardwalk Wine Promenade.

Given the audience that it’s trying to appeal to, it’s not surprising that the tweaked “Do AC” campaign features more online and social medial events, such as the one that allows users on Facebook and Twitter select the music for the city’s annual 4th of July fireworks show, and a redesigned Web site optimized for mobile devices that lists events more prominently on the homepage.

Last year, the ACA spent 86 percent of its $20 million budget on branding and only 8 percent on events.

This year, it will use most of the same commercials as last year — which still tested well with audiences, Cartmell said. But it will spend nearly 50 percent of its budget on securing and promoting events and only 30 percent on branding, which includes some new commercials to run alongside last year’s ads.

The ACA is also spending money on getting mentions on air from celebrities like Jimmy Kimmel and on TV shows like Good Morning America.

The alliance is also building on the success of last year’s events, such as the Miss America pageant and the Sand Sculpting World Cup, by bringing them back and adding new ones, including the Challenge Atlantic City Triathlon and a free beach concert featuring “The Voice” star Blake Shelton.

The marketing shift away from gaming in a city traditionally associated with casinos was forced by a decade of slipping casino revenues. The decline began around 2006, as casinos and slot parlors began opening in Philadelphia and the area, including Harrah’s in Chester, PA, and Sugar House Casino on the Philadelphia waterfront.

At the same time, new casinos in Connecticut and the Poconos siphoned visitors from northern New Jersey and New York.

“Those casinos have really taken a bite out of the casinos in Atlantic City,” according to Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton College

For some of Atlantic City’s casinos, the decline has been particularly harsh. The Revel, which opened to great fanfare, applied for Chapter 11 bankruptcy in March 2013, a little under a year after opening. The casino emerged from bankruptcy in May and is now looking for a buyer. The Atlantic Club, an Atlantic City staple since 1980, just shut its doors in January after 34 years of operation.

Even though revenue is still down for the city’s casinos, the decline has slowed, according to a report from the New Jersey Division of Gambling Enforcement. Casino revenue declined 8.2 percent in 2012, but dropped by only 5.3 percent in 2013.

Food, drink, and entertainment revenue has been rising since 2010, according to the New Jersey Division of Gaming Enforcement. AC took in $26 million in luxury tax, a tax on entertainment, alcohol, hotel rooms, and other tourism-related items, in 2009.

In 2012, that number rose to $35.5 million and remained the same in 2013. The city saw about 27 million visitors in 2013, which was a only a few percentage points down from 2012, according to Posner. AC’s peak tourism in the past decade was in 2005, with about 33 million visitors.