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End appears near for Atlantic City marketing agency

ATLANTIC CITY - A tourism-driven economy like Atlantic City's that averages 25 million visitors a year has no choice but to sell itself to the world.

ATLANTIC CITY - A tourism-driven economy like Atlantic City's that averages 25 million visitors a year has no choice but to sell itself to the world.

But after a year of upheaval, to help save itself and stay solvent, the city is willing to part with its main marketing vehicle, the Atlantic City Alliance and its $30 million annual budget that made the ad slogan DO AC famous.

The multiyear, multimillion-dollar advertising campaign was a luxury the city never had before 2012. By comparison, the Las Vegas Convention and Visitors Authority has an annual advertising budget three times that ($94.1 million).

But just three years after a new state law gave the ACA life, legislation is being debated to get rid of it. Casino operators say the ACA is already being phased out in their overall marketing plans for this year, and with that come some concerns.

"In my opinion, the decrease in ACA advertising will lessen the awareness of Atlantic City as a resort destination, as their advertising was brand-oriented," said Joe Lupo, senior vice president of operations at market-leading Borgata. "Will that decrease in brand awareness decrease visitation is the question."

The emergency management team Gov. Christie installed to review the city's fiscal crisis could release its findings as early as Monday, according to some aides in Trenton.

There is a pending Statehouse measure to reallocate the ACA's $30 million budget to pay down the city's debt. The proposal is tied to a larger Atlantic City relief package on hold.

But the ACA's epitaph is already written. Its board, composed of casino executives, voted in early November to disband the agency.

"Unfortunately, the Atlantic City Alliance is a casualty of very difficult economic times," the Casino Association of New Jersey, which represents the eight remaining casinos, said in a statement Thursday. "The alliance provided a valuable service to Atlantic City, and the proposed reallocation of its funding is not a reflection of the good work it accomplished."

Before the ACA, the casinos traditionally co-sponsored or directly promoted citywide events. In addition to the ad campaigns, the alliance successfully sponsored free beach concerts last summer that featured top acts such as Blake Shelton and Lady Antebellum.

In its absence, the casinos will continue their individual marketing efforts.

"While I am comfortable getting our message out, it will be more difficult for those [casinos] who are already having a tough time, have a limited database, can't sell hotel rooms and other amenities," Lupo said.

Former ACA chief executive officer Liza Cartmell resigned Jan. 5, and half of the ACA's staff of 10 has been let go.

With the resources it has left - money from its 2014-early 2015 budget, the ACA launched a "mini-campaign" on Friday to tout Atlantic City as the "entertainment capital of the Jersey Shore."

The gathering, an intimate luncheon in Center City for 14 broadcasters and feature writers charged with putting together annual Shore Guides, reflected a new level of austerity. There were no slick media packets with DVDs, gift bags, or DO AC car magnets. Organizers did bring in sand, however, to make light of the snow.

Just a few years ago, it seemed the ACA had more money than it knew what to do with. And critics - like Senate President Stephen Sweeney (D., Gloucester) whose bill would do away with the ACA - claim it spent frivolously. Others say it misfired badly by not marketing gambling at all in its 2012 inaugural year, opting instead to focus exclusively on nongaming attractions such as restaurants, nightlife, and the beach.

In the ACA's second year, the casino chiefs who pay into the $30 million pot to fund the agency (money they formerly used to subsidize the state's racetracks so they wouldn't install slot machines) changed that. There were ACA ads in 2013 showing gamblers having a good time at slots and table games. But by then, newer casinos in Philadelphia and Maryland had already siphoned off many of them.

By summer 2014, Revel entered bankruptcy for the second time, and three other city casinos folded.

To its supporters, the ACA gave the smaller casinos something they couldn't afford on their own: reach.

"The ACA's larger budget allowed for bigger buys in Philly and New York, which an individual casino has a more difficult time doing so with a much smaller budget," Lupo said.

He said the casinos' marketing budgets were more event-driven.

"The Las Vegas consumer goes when they have vacation time, and their visit to Las Vegas is not timed around tactical events, for the most part," Lupo said. "Here in Atlantic City, people decide to come down a week to 48 hours out, due to being able to jump in the car and come down for a few hours or overnight.

"Therefore, their trip is based much more on the promotional/event calendar," he said. "Thus, we must spend a lot more time and dollars [advertising] more tactically."

A small consolation, Lupo said, was that the casinos have higher ad budgets this year than in years past because of online wagering revenue.

Many argue that a city built on tourism needs to be marketed on a broader level to compete with other destinations. But Atlantic City Mayor Don Guardian said even with the proposed redirected ACA money, the city still faced a $40 million budget shortfall in 2015.

Assemblyman Chris A. Brown (R., Atlantic), who sits on the Assembly Tourism Committee, proposes marketing Atlantic City "in a cost-effective manner" through casino contributions, grants, corporate sponsorships, and charging minimal event fees.

Israel Posner at the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University in Galloway cited Meet AC, established last year to go after conventions, which is mostly funded with Atlantic City room taxes.

"Growth will occur through diversified leisure attractions, as well as group and convention business, especially in the off-season," he said.

After Friday's event, Jeff Guaracino, chief strategy officer for the ACA, who replaced Cartmell as CEO but whose salary remained the same ($230,000 per year, about half what Cartmell made), said he couldn't yet launch a DO AC summer campaign because he didn't know whether the ACA would have a budget, or be around.

"Whatever happens, it will be in the best interest of the city," he said.

But the promoter in him gave the ACA what could be its final shout-out.

"There was not a strong affinity with the name Atlantic City, and that's where the DO AC campaign really shines," Guaracino said. "The campaign gave people the opportunity to affiliate with a brand, like Vegas or Orlando, which we needed."