Pure Michigan Campaign A Pure Ripoff For Taxpayers? Study Casts Doubt On Ad's Effectiveness

DETROIT (WWJ) - Are those "Pure Michigan" commercials and billboards advertising the state's most attractive destinations really paying off, or is the state just throwing away money?

A new study released Tuesday by the Mackinac Center for Public Policy calls into question the Michigan Economic Development Corporation's claim that the ads generate an impressive $7.67 for every dollar spent. Has the more than $261 million spent on tourism promotion over the past decade been worth the cost to taxpayers?

"We looked at the consultant study by the Michigan Economic Development Corporation and found that the authors refused to precisely explain how they generated their numbers," Michael LaFaive, one of the study's authors, told WWJ's Lauren Barthold.

LaFaive said he and fellow researcher Michael Hicks looked at data from 48 states over a 39-year period and found that all states that spend money on tourism advertising wind up losers in the end.

"For every $1 million increase that a state spends on tourism promotion, it can expect to see a corresponding increase of just $20,000 in extra economic activity at the state's hotels and motels," said LaFaive.

The Michigan Economic Development Corporation, however, is sticking by their claims that the ad campaign is providing bountiful returns on the state's investment. Spokesperson Michelle Grinnell said more than 113 million visitors spent nearly $23 billion in 2015.

"The Pure Michigan campaign has proven time and again to be a strong investment for the state," said Grinnell.

The MEDC says the figures it uses were generated by Canada-based private consulting firm Longwoods International. But despite their research being funded by taxpayers, LaFaive says Longwoods refuses to reveal its precise methodology in determining evidence of the ad campaign's success.

Until then, LaFaive remains suspicious. He thinks the money would be better served if it were spent elsewhere, such as infrastructure

"Michigan would not be unilaterally disarming if it were to drop this program and spend the money it saved on something else," he said. "It would really be arming themselves with a better weapon, particularly if it were smartly chosen."

LaFaive suggests suspending the Pure Michigan advertising program until the state can demonstrate, in an open and transparent manner, that taxpayers really do benefit from the spending. To see the full study, click here.