Start-Up NY advertising down significantly

ALBANY – The state’s spending on advertisements for its Start-Up NY tax-break program has slowed to a halt, state records show.

Gov. Andrew Cuomo’s administration spent $544,315 marketing Start-Up NY from April 2015 through mid-September 2016 – with none of that spending coming after March 2016, according to Empire State Development documents obtained under the Freedom of Information Law.

It’s a marked change from the early days of Start-Up, when the state spent $53 million to produce and air a slate of television advertisements touting the program from Dec. 2013 through March 2015.

The Start-Up program, which launched in late 2013, allows businesses to operate tax-free for 10 years if they locate in specific zones, which are mostly located on State University of New York campuses.

Jason Conwall, a spokesman for Empire State Development, which oversees the Start-Up program, said the early advertisements touting the program were “timely and effective.”

Since then, the state’s spending on ads has shifted toward touting successful New York businesses, he said.

“The success of the START-UP NY-focused marketing allowed us to move forward with new ads, which is a standard approach in advertising, progressing from the promotion of a new program offering a tax-free environment to the larger economic development toolbox and then profiles of businesses succeeding in the Empire State,” Conwall said in a statement.

The early spending on Start-Up NY ads, which aired both in- and out-of-state, drew criticism from some lawmakers.
The criticism was amplified by the program’s sluggish start: In its first two full years, companies in the Start-Up program created just 408 new jobs.

Since April 2015, Empire State Development hasn’t run television ads specifically touting the program -- which is the costliest form of advertising.

The state entity spent $395,841 on print advertisements touting Start-Up NY in trade publications from April 1, 2015, through Sept. 20, 2016, according to the documents.

Another $135,844 over that time period went to search engines like Google and Bing, which allowed Start-Up ads to pop up when users searched for the program or other similar phrases.

The remaining $12,630 covered production costs.

The bulk of that spending – about $470,745 – came between July and September of 2015. Just $30,859 came in the first quarter of 2016, the most recent Start-Up marketing reported by Empire State Development.

Assembly Minority Leader Brian Kolb, R-Canandaigua, Ontario County, called on the state to do a full cost-benefit analysis of the advertising spending and whether it provided a return on the investment.

“We want a full evaluation,” Kolb said. “Are we getting a return on the economic-development efforts we’ve been promoting?”

Since 2012, the state has dedicated $50 million a year to marketing its various tourism and business programs. It was upped to $55 million in the current state budget, which runs from April 2016 through March 2017.

Conwall, the Empire State Development spokesman, said the advertisements have helped improve the perception of the state’s business climate.

He pointed to a state-funded report that concluded the advertisements have had a positive impact, in part by driving traffic to the state’s tourism and business websites increase when an advertising campaign is in full swing,

“The advertisements that included START-UP NY were both timely and effective, as we promoted a new, innovative tax-free program while using it as the vehicle to deliver the message that New York State is a great place to do business,” he said.


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