Software Solution

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DMO Software Solution Budget

Exhaustive research of the public domain indicates that the information you have requested is unavailable and cannot be reasonably calculated, for three reasons:

1. Available annual reports and other financial documentation is not broken down to the necessary level of granularity to either report or calculate a typical Western European DMO's software solution budget;
2. Available market research does not segment to this level of granularity;
3. Market research which may provide a detailed assessment of global DMO spend is behind a paywall.
Our research did discover that advertising spend is increasingly allocated to digital marketing, and that the industry is experiencing considerable disruption. Below you'll find our analysis of why this information is not publicly available and our related findings.

We began by reviewing the previously completed Wonder responses related to this request, including the spreadsheet of European DMO budget samples. Our initial strategy was to review the precompiled budgets of mid-sized DMOs as a representative sample of a 'typical' DMO, since the majority of reported budgets fall into the €1-10 million range. However, research of multiple DMOs listed in the spreadsheet whose annual budget was between € 1-10 million indicates that budgetary breakout at a granular level is unavailable - either because the annual report itself is unavailable, or because the available report does not segment into useful categories to allow assessment of spend on software solutions. This finding was not wholly unexpected, given that even public companies - who are required by law to publicly file detailed financial annual reports - rarely break out their expenditures to a degree that would allow this type of assessment.

We then researched for market research on DMO industry spend, including third-party analyses of primary market research. This generated a 2015 report, the 'DMO Organizational and Financial Profile Study', noted to be "the most comprehensive benchmark study on DMO structures and organizational practices in the destination marketing sector today." It also generated a 2017 paid report, 'The State of Destination Marketing.' The former is limited to North America; the latter is global and includes Western Europe. However, research through white papers, book summaries, industry reports, and general media articles generated no commensurate type of report specific to either Western Europe, or to any of the Big Five economies of Western Europe (Germany, Italy, Spain, UK, and France).

Due to the lack of available information which directly answers your question, or which would allow the calculation of an estimated figure, we have provided the most relevant and related information discovered in our research, most of which was relative to advertising and marketing. No information was found in our research relative to CRM, internal and HR software applications, or other non-marketing software applications. As noted above, none of our findings were exclusive to Western Europe.

A key theme of the 2017 European Cities Marketing International Conference was the emphasis on continual disruption in the urban tourism market. Given this, it is reasonable to assume that any software solution that directly addresses an organization's ability to meet this disruption could see an increase in adoption in the next few years.

The 2017 paid report 'The State of Destination Marketing' notes that its "research found that DMOs by and large are continuing to shift their advertising expenditure toward digital advertising, though a large number still find traditional advertising of equal importance." However, this finding (which is corroborated by other research) may or may not reflect budgetary spend on software, since at least one marketing industry player indicates that "almost every DMO outsources some part of their marketing implementation to a professional advertising agency." For the portion that is addressed in-house, though, we would reasonably expect to see that trend toward increased digital marketing supported by software applications. The full State of Destination Marketing report does assess budgets, but the level of granularity available is not outlined.

The 2015 DMO Organizational & Financial Profile Study is specific to North America; and though slightly dated, it is the most recent source available with any level of detailed breakout of spending across the industry. For comparative purposes, we are assuming that North American spend breakout and Western European spend breakout is likely to be fairly similar.

The study found that the spend for personnel, administrative and marketing did not vary tremendously among organizations of various sizes. Personnel costs, which reasonably exclude any software overlap, account for 37% of annual budgets, on average. The largest organizations had the smallest percentage of personnel spend, while the smallest organizations had the largest percentage. Marketing spend accounted for approximately half of overall spend, while administrative and general costs accounted for about 12%.

Of the marketing spend segment, 39% was allocated to digital marketing; the remaining 61% was allocated to traditional print and other offline marketing channels. While this doesn't correlate directly to software solution spend, it does indicate that software spend - at least for marketing - is likely to trail expenditures for more traditional methods of advertising, although that gap is narrowing.

To wrap it up: extensive research of the public domain indicates that the level of granularity required to report or calculate how much a 'typical' DMO in Europe spends on software solutions is not available. We did learn that digital advertising is receiving a growing percentage of spend annually, but were unable to find any information relative to software spend specifically.