One day in October, Rob Schutter Jr., chief operating officer of Leisure Systems Inc. (LSI), dropped by to talk with Brian Schaeffer, president of Texas Advertising Inc. and CEO of the Texas Association of Campground Owners (TACO). Their focus was on how Schaeffer’s agency could help LSI, franchisor of the Yogi Bear’s Jellystone Park Camp-Resorts, promote its brand. But their 5-hour chat eventually came around to the brouhaha that caused TACO to adjust its relationship with the National Association of RV Parks and Campgrounds (ARVC) in 2008. TACO objected to the $50-a-year dues increase set to take effect in 2009 and proposed several alternatives. According to TACO, ARVC was not warm to the idea. TACO had previously surveyed its members in 2008 and learned these priorities: The No. 1 concern was governmental affairs. “They wanted us to be more involved on the state level,” Schaeffer said at the time. No. 2, they wanted a PR campaign that focused on Texas that would benefit them. “ARVC programs were on their list of concerns but were rated lower,” he said. The TACO board subsequently voted on an action plan, but all of those actions, combined with the ARVC increase, “left our budget way upside down,” Schaeffer said. TACO paid ARVC $56,000 in 2008 and would have paid a minimum of $76,000 in 2009. The board ultimately decided to fall back to the cooperating status with ARVC for a year and let its members decide on their own whether to pay ARVC dues. Schaeffer’s letter to ARVC at the end of October in 2008 “set off a firestorm of meetings” before and during the InSites convention that fall. Ultimately, TACO was granted its request to hold cooperative status with ARVC for a year, starting in 2009.
As ARVC chairman, Schutter has put TACO’s reaffiliation with ARVC on his list of goals for 2013. Schaeffer, 48, talks about that October conversation with Schutter and the growth of his company in a far-ranging interview with Woodall’s Campground Management Editor Steve Bibler. Texas Advertising has grown from a two-person agency founded in 1994 by Schaeffer and his wife, Debra, to a staff of nearly 80, which includes sales people nationwide. In 2011, Texas Advertising purchased the guest guides and hosted websites operations from AGS, a subsidiary of Good Sam Enterprises LLC, a move that greatly increased Texas Advertising’s market penetration. The agency is very aggressive in promoting itself and its clients and annually issues more news releases than any other organization in the campground sector. Today, Texas Advertising has some 800 clients in the U.S. and Canada and has carved out a major niche in the RV park and campground sector. Here in Q&A format, is the bulk of that interview:
WCM: How did Texas Advertising originate?
Schaeffer: I started the company as a result of making an arrangement with the TACO board to publish their directory. A year later, we took on the complete administration of the association as a management company. Up until then, the association was managed on a volunteer basis.
We also had a number of parks in Texas we did guest guides for. We expanded into doing additional guest guide work, although primarily in Texas, and did feasibility studies and assisted in building campgrounds. We don’t do much of that anymore. It’s not core to our primary business.
TACO was our first big client and remains to this day our biggest client.
WCM: You’re based in Crowley, a Fort Worth suburb, right?
Schaeffer: Yes and no. The Crowley location is strictly a mailing address for us. Our actual compound is in Burleson, a sister city. About 12-15 folks are at the headquarters and the balance are spread over the U.S. and Canada. Our compound is about 8,000 square feet and approximately 6,000 square feet of that is used for office space and headquarters and the remaining 2,000 square feet is a residence. I am bulging at the seams. Next spring, we’ll build a 3,000-square-foot building for on-site expansion.
WCM: Speaking of bulging, how is your diet coming along?
Schaeffer: I’m in my 16th week and I’ve lost 82 pounds. (Schaeffer topped 400 pounds when he started his diet in mid-summer.) It’s been fantastic. I owe a lot of it to GM Michael Moore who got me on the exercise routine. Other than that, my wife Debra is very hip to the kinds of food you have to eat to be healthy, and this mobile app (My Fitness Pal) where I track everything causes me to make some good choices. Did you know that 14 tortilla chips dipped in chili con caso is 400 calories. By comparison half a turkey sandwich and a Caesar salad is under 400 calories…
WCM: Tell me more about how you got the TACO directory business?
Schaeffer: We were at a TACO convention when Woodall’s informed the association it did not want to continue publishing their directory. Back then, it did about $25,000 in gross sales and the association had 160 members. Today, TACO has nearly 400 members and the publication is the largest non-dues revenue producer for the association. We do about $400,000 gross sales a year.
WCM: Your company is divided into two divisions, AGS & TXAD Internet Services. Explain that arrangement.
Schaeffer: When Affinity Group Inc. bought AGS, we had a number of calls from rep teams that wanted to go to work for Texas Advertising so we expanded our business in the U.S. and Canada and expanded our outside sales teams from three to eight. About four years ago, I started a dialog about purchasing AGS from Affinity. There was no meaningful conclusion but it was a friendly discussion. About 1½ years ago, we were approached by Marcus, (Good Sam Enterprises LLC CEO Marcus Lemonis) on the purchase of AGS and were able to put together a deal that closed very quickly.
WCM: What did this do to your client base?
Schaeffer: We acquired three times as many clients as we already had. We decided to roll the Texas Advertising print division into the AGS brand. It continues today to be a strong brand.
The AGS Internet Division was about the same size as our web division, so we decided to roll AGS Internet into Texas Advertising and brand it as TXAD Internet Services.
The guest guide business is three times larger than the web division and the revenue is seven to eight times the size.
WCM: Your business is divided among traditional ad agency work, association publishing and marketing consulting. Explain in more detail how your business is organized?
Schaeffer: Going back 10 to 12 years, we began placing ads in various publications on behalf of our marketing clients. A lot of work was done with Trailer Life and Woodall’s. Now it’s with the Good Sam Travel Guide. We act as their agency, advise them on buys and prepare all the artwork and submit directly.
Our publishing is the RV Travel and Camping Guide to Texas and the Missouri RV & Camping Guide for the Missouri Association of RV Parks and Campgrounds and we’re actively bidding on and looking to expand our part of that portfolio. Now with the acquisition of AGS, I have reps all over the country. The significance of this is, if you can deal with people on a personal level, belly to belly, you get a better result in and support in these associations.
We think if they’re (state association guide producers) doing a certain sales volume by mail or phone, we can take that on and significantly grow their business. That they would pay us a commission to do that makes sense because of the growth we can begin to bring them. In addition we do lots of ancillary printing for parks – rack cards, post cards, brochures, car tags, etc.
As for our marketing consulting, that involves a variety of things, largely through the Texas association. They have a wide variety of marketing programs we have developed through the years. We have bundled a number of them with the RV Travel & Camping Guide to Texas, so as we talk to the campgrounds it’s not just do they want an ad in the printed guide, do they do Internet marketing? Do they want to take advantage of the shows we do? We can act more as a marketing consultant and bundle these services. There are some outside services, like administration of Google Ad Words. We also have custom bloggers on staff who take a campground and blog three or four times a month and post on a separate website that is integrated with the park’s website so as to drive up reservations at the park. A lot of associations have different programs they do but we think we can bundle them with their guides and help them generate more revenue for their associations.
WCM: What were the major milestones along the way?
Schaeffer: TACO got us started in the business in a significant way and we will never forget that. When we got to the point we had doubled the association membership, from 160 to over 300 in year 5 or 6, that was big.
About year 4, the directory hit about $200,000 in sales and from that point on the growth has been pretty significant.
When we expanded reps when Affinity purchased AGS, that was a significant opportunity which worked out well and positioned us to be in a place where we were able to purchase AGS from Affinity. When that opportunity came, we were ready for it.
WCM: Does TACO continue to grow its membership?
Schaeffer: Our high point was 440-something four years ago. As with other state associations, it’s leveled off or dropped some in recent years and now stands at 380. Most of this is because of the economy. A lot of parks in Texas cater to oil and gas folks or other business-related travel and when that business moves on, they suffer.
WCM: Is TACO the nation’s largest state campground association?
Schaeffer: I believe it is. Our directory in terms of revenue generated, our marketing programs, our show, are among the most successful operations. When we took the association on, their annual budget was just under $100,000. Now the annual budget is about $800,000. The directory was about $25,000 in gross sales. Now, the directory and marketing programs, which includes banner ads on websites and co-op advertising, average between $450,000 and $500,000 a year gross revenue to the association.
The Missouri directory used to do $7,000 to $8,000 in sales a year. This year was just under $20,000.
We have a short window to market state directories. A lot of states don’t get cooking until April or May but have to do their guide marketing in the fall so they can have the new directories available for distribution in January. By having reps on the ground you can make a big difference. Take Missouri, we already had a team in Missouri. They did a lot of work and it’s not just campground revenue. They can bring in auxiliary advertising, like the city of Branson that takes a couple of pages in that directory. They talk to RV dealers, RV repair folks, restaurants and other attractions. We have the entrée into those things based on the AGS guest guide side of the business.
WCM: Where are your 800 clients located?
Schaeffer: They’re nationwide. We have less than 50 customers in Canada, the balance are in the continental U.S. from coast to coast. We also have a significantly growing client base that is not directly in the RV park and campground business. For example, when my reps call on restaurants to support a local RV park directory, if they check their website and find they don’t have a good website or have no site at all, one thing we can provide them is a mobile website so their menus are online in a mobile format. There is a growing segment we are developing through our other business contacts. But our core business is still the campground industry.
WCM: What campground conventions or meetings do you or a company rep attend?
Schaeffer: Dozens, but we’re cutting back. Travel has become more expensive and time away from business opportunities is a challenge. There are certain shows more heavily attended that get bigger congregations, NCA, ARVC, KOA, LSI and this year we attended the National Association of State Park Directors in Kentucky. What I do with all state association brethren, the majority of whom have shows, I either sponsor something or provide something for their auction. I make sure we maintain our dues with all those organizations, they are the grassroots and at a minimum it’s a giveback to what those folks do. It is not economical to attend every state campground association show.
WCM: What service do you provide to Best Parks in America?
Schaeffer: We’re a preferred vendor. Founder David Gorin approached me early on and asked us to join. We do a lot work for the parks in his network: we provide either their guest guides or websites or both.
WCM: I would liked to have been a fly on the wall during your meeting with Rob Schutter. What percentage of that meeting was about LSI/Texas Advertising and how much was ARVC/TACO?
Schaeffer: Rob contacted me. He was going to be in Texas, visiting franchisees. One of his franchisees we do a lot of work for is in Burleson, North Texas Jellystone at Rustic Creek Ranch. In fact, we were helpful in getting Rustic Creek and Yogi together. Rob called and asked to come by. I said, “Absolutely.”
I want to say Rob was here 4-5 hours. Two-thirds to three-fourths of the conversation was about how things were going with Leisure Systems, their franchise network and park business in general. At some point the conversation did turn to ARVC and TACO. We didn’t spend a whole lot of time talking about the past and whatever water may be under the bridge. We talked about the future and what we’re doing for TACO and what ARVC has going and programs it has put together for their membership.
About 25% of our TACO membership holds membership in ARVC. My board feels at some point if that gets to be 50%, if would be worthwhile talking to ARVC about a cooperative status, like Louisiana. If that number continues to grow and hits 75%-80%, it may be worthwhile to look at some reaffiliation.
We also talked about the new ARVC affiliation agreement. We reviewed it at our board level.
Rob asked me if I could look at that again and reiterate where we are at. It was a very nice conversation.
WCM: Beyond a possible business arrangement between Leisure Systems and Texas Advertising, did you get the feeling that Rob was bartering with you to orchestrate TACO’s reunification with ARVC as part of a deal?
Schaeffer: I didn’t get that at all. Rob deals with this perception in general, “Gee, you’re a franchisor of Yogi parks and yet you’re chairman of the national association. Does one thing lead to another?” You are not out proselytizing every park you find to make them a Yogi franchise. In fact, that came up during our talk. He absolutely does not do that. I think he works pretty hard not to have that be the perception.
It’s very similar to what we go through as a management company having other successful services and our management of the association. I have a lot of clients in Texas but I’ve always felt they were my clients because I provided them a good service, not because we happen to run the state association.
WCM: Is a follow-up planned?
Schaeffer: ARVC president Paul Bambei wants to chat at the ARVC convention (they did meet) and I have reiterated the mantra of the meeting Rob and I just had – “An open conversation with an open mind.” Our TACO board is meeting Jan. 23 in Austin where there may be a follow up discussion with Bambei.
WCM: You still list the ARVC logo on your website. Why?
Schaeffer: We are a member of their suppler council and have a ton of clients that are ARVC members.
WCM: It may be a Texas thing but you seem to have been the thorn under the saddle of some campground entities. Besides the 2008 brouhaha, last year you raised a ruckus after ARVC declined your offer to arrange for Texas Gov. Rick Perry, then a GOP presidential candidate, to speak at ARVC’s convention in Savannah, Ga. Why does all this occur?
Schaeffer: I have always let my opinions be known, sometimes not as artfully as what I would have wished, in retrospect. People don’t have to wonder where I stood on certain issues. When you are that way, you run the risk of being perceived as someone who doesn’t play well with others.
The other day I ran across some report cards from either kindergarten or first grade. You know how teachers put comments on your report cards? One of mine was, “Brian never shuts up.” Another was, “Kids sort of gravitate to Brian, which becomes a problem because he never shuts up.” I come by that honestly. If I have strong feelings about something, I will probably let that be known. Should I be more artful? Absolutely.
When you look at our industry in the grand scheme, we’re not yet what you could even call a pimple on the butt of an elephant. It’s still an industry, like (the TV series) “Cheers,” where everybody knows your name. So whether you’re active at the association level or at shows, bigger corporate people get to know you. Above all, you have to be honest in what you say and do because in a small, tight-knit industry that is about all you have to trade on. So, over the years, if asked for my opinion, normally I would give it, maybe not always as artful as I could have.
One example, when we were doing feasibility studies for prospective campground builders, nine out of 10 would result in a park not being built. I was very honest how long it would take a campground to become successful; people would not want to build because of that. I think you’re better off to be upfront and honest.
WCM: In October, Southeast Publications Inc., your former employer, filed a suit in federal court in Fort Lauderdale, Fla., against you and your company, accusing you of stealing trade secrets. Do you have a response to the Southeast Publications suit against you?
Schaeffer: In fact, on Oct. 30 a federal judge dismissed the case without us ever filing a single document. The allegation is interesting since our competitors have consistently mimicked our products. We have done absolutely nothing wrong and will vigorously defend that position. AGS has always set the bar high in terms of products and service. We have ramped up our marketing effort and provide a pretty robust group of services. We’ve had dozens and dozens of parks that switched over to AGS. That has bothered my competitor. Although they have threatened many parks over switching companies, we feel parks have the ultimate right to decide who they do business with. Rather than compete for their business, Southeast has chosen the courts. It is unfortunate.
WCM: What’s on the horizon?
Schaeffer: We’re bidding on the Ohio Campground Owners Association directory and I’m doing a presentation to my colleagues at CAMP during the ARVC Conference. I would like to help them out on their directories and association marketing programs. Non-dues revenue is becoming a more significant issue every year.
WCM: Anything else you would like to say?
Schaeffer: We are blessed to be in this industry. We do a lot of charitable stuff. A percentage of every ad we sell is allocated to a pool of charities we support. We do a fair amount of charity work and are very, very happy to do that. I believe every dollar you give eventually comes back to you. We support the Dolly Parton Imagination Library Foundation, Wounded Warrior Project, St. Jude’s Children’s Research Hospital, KOA Care Camps, the Doris Day Animal League and IMAHelps.
WCM: Anything else?
Schaeffer: Debra and I are truly as excited about being in this industry today as we were the first day we drove our fifth-wheel off the lot and proceeded to dent the back of the pickup cab backing into our first RV site!
WCM: Thanks for the interview.