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Ads for Start-Up NY, other efforts lack ‘tangible’ results, audit says

For all of the $211 million that the Cuomo administration has spent touting New York’s business and tourism advantages, State Comptroller Thomas P. DiNapoli doesn’t think much of the results.

In a critical audit issued this week, DiNapoli said Empire State Development Corp.’s payback for its Start-Up NY television ads and other programs produced nothing “tangible.”

“When government spends hundreds of millions of taxpayer dollars to send a message that New York is a place to visit and open for business, it should have clear objectives and show the public actual results,” DiNapoli said. “ESDC’s attempts to measure the results of this advertising campaign were weak at best, leaving real questions about whether the results justify the cost.”

Indeed, DiNapoli said that with 41 companies planning to create 1,750 jobs over the next five years, Empire State Development spent more than $25,000 for each new position.

The comptroller’s audit follows a Buffalo News report indicating the Start-Up NY program is working at a slower pace than anticipated, even if the University at Buffalo is making the most progress with 37 percent of all 110 companies involved in the program statewide.

Empire State Development spokesman Jason Conwall said DiNapoli’s report ignored key factors.

“It’s disappointing that the Comptroller’s Office, which spent close to a year on this audit, has chosen to ignore every metric put into place to measure the effectiveness and impact of the multiple advertising campaigns run by ESD,” he said. “The facts, as confirmed by ongoing independent quantitative research, show our efforts have made great strides in improving perceptions of New York State.”

He said a state-commissioned report by Russell Research said the program created greater awareness of New York’s economic-development programs, increased the state’s perception as a good or excellent place to do business by 122 percent among executives from out of state, and attracted more tourists to vacation in New York.

“Despite these glaring omissions, the comptroller’s primary finding was that ESD has effectively managed this contract,” he said. “We agree.”

The comptroller said auditors found that Empire State Development tried to evaluate the ads’ effectiveness, but only whether a few focus groups changed their perceptions after viewing the ads. The comptroller also noted that Empire State Development said it monitors performance and that the advertising was intended to build a brand and change perceptions, not create jobs or generate economic development. The agency agreed to seek performance measurements and metrics in future contracts, he said.

The Comptroller’s Office recommended:

• That future strategic and marketing plans include performance measures for monitoring outcomes to determine if the cost generated a return on investment.

• Setting specific targets, goals and benchmarks for evaluating performance outcomes.

• Regularly evaluating the program outcomes associated with the marketing efforts and using the information to periodically review, and if needed, adjust program goals, strategies and resource allocations.