Chattanooga cancels ‘icky’ video production agreement with New York marketing agency

Screen capture / Ellis Smith, director of special projects for Chattanooga Mayor Tim Kelly, appeared in a video announcing "a new program we are launching with our partners at CGI Digital that will help tell Chattanooga's story across the country." The program has been discontinued and the video removed from the city website.
Screen capture / Ellis Smith, director of special projects for Chattanooga Mayor Tim Kelly, appeared in a video announcing "a new program we are launching with our partners at CGI Digital that will help tell Chattanooga's story across the country." The program has been discontinued and the video removed from the city website.

Multiple businesses in Chattanooga recently received a pitch from a marketing agency based in New York that would involve spending thousands of dollars to receive promotion via the city's website — a project that an official in Chattanooga Mayor Tim Kelly's office promoted in a letter provided to those organizations.

"Recruiting and retaining a skilled workforce is an essential part of Chattanooga's future vitality," Ellis Smith, the director of special projects in the mayor's office, wrote in the letter recruiting video production clients for CGI Digital in Rochester, New York. "In addition to helping the city tell its story, CGI has agreed to also offer its services to members of our business community like you who may wish to streamline recruitment efforts and strengthen your online presence.

"We encourage you to consider being a part of this initiative if it fits your needs," Smith wrote.

A similar arrangement with CGI has been used in cities across the country -- municipal leaders get free video production services from the firm while encouraging local businesses to pay for them.

But after the Chattanooga Times Free Press asked questions about the arrangement, Kelly's office is now canceling its agreement with CGI Digital and has expressed concerns about how the company advertised its services to local businesses, citing an email from the company that the newspaper shared with the administration.

In that email, a salesperson said the company is working in partnership with Kelly's office.

"The city of Chattanooga thought you would be a great fit for this upcoming project," the email said, with that sentence being printed in bold. "We are putting together and filming an official community video tour to connect new families moving into the area with essential services along with modernizing the community online and its digital presence for relocating families and showcasing diversity in towns and businesses as the city is rapidly growing."

Smith said Thursday that the city did not suggest businesses to CGI Digital.


"I raised concerns with the vendor's management regarding some of the framing and word choices being used in communications with local businesses, which was inaccurate and unacceptable," Smith said in a text message Monday. "While we're generally happy for vendors and partners to tell others that they are working with the city, it is not appropriate for any vendor's representatives to misrepresent or distort that relationship in an attempt to gain traction with potential customers."

Through its partnership with the U.S. Conference of Mayors and the National League of Cities, the city engaged CGI Digital to produce videos associated with Kelly's One Chattanooga strategy, a framework through which his office aims to identify and close disparities among city residents. CGI Digital was completing the project for the city free of charge.

Smith said in a phone interview Thursday that CGI Digital provides these services to member cities as a way of helping them advertise the unique aspects of their community. As part of this project, CGI officials have also been reaching out to local businesses and offering the company's services for a fee. Those services would involve producing a promotional video that would be accessible through a link on the city's website.

Smith said the city did not have any visibility into the agreements the company made with other private entities.

Nicole Rongo, CGI Digital's vice president of government relations and strategic partnerships, said in an email to the Times Free Press on Tuesday that the company recently learned a sales representative had "presented the program to local businesses with unwarranted zeal, excitement and sales puffery."

"In the process, the fact that CGI Digital was working with the city might have caused some businesses to feel pressured to participate in the program," she said in her email.

(READ MORE: Unemployment rates in most Chattanooga area-counties stay below U.S. average)

Smith said the mayor's office shared its concerns with the company after the Times Free Press provided him with a copy of the email sales pitch.

In the email, the CGI Digital employee described the project as an "interactive video tour" that would be published and featured on the official municipal website in early 2023 "to educate the community on provided services that are offered."

"This is the first time that the city is allowing businesses to be part of their official website, and we will be producing sections on health care, real estate, education, manufacturing, shopping & dining, retail, automotive and other professional services," the email continued.

The email also touted the letter signed by Smith, which said the city is partnering with CGI Digital "to coordinate and produce a series of educational videos highlighting Chattanooga's story for residents, visitors and businesses."


Smith told the Times Free Press on Tuesday that all the videos would have been hosted by CGI Digital and accessed through its player on the city's website. Now, the city will not be embedding CGI's player on its website.

The sales pitch from CGI Digital said the company was already working with about 50 local organizations, including Silverdale Baptist Academy, the Chattanooga Airport and Cempa Community Care.

Spokesman Albert Waterhouse said in an email Monday that the Chattanooga Airport is not working with CGI Digital and has never been contacted by the company. Misty Bolt, the owner of another business on the list, MedicareMisty, said in a phone call that her company has paid about $10,000 for two 30-second commercials, which are scheduled to be shot in March. The prospect of appearing on the city's website was a major selling point, she said.

(READ MORE: Chattanooga Airport boardings surge in 2022 but lag pre-pandemic high)

Miles Huff, the director of community engagement at Cempa Community Care, said in a phone call that the organization hired CGI Digital because the cost was low and well within the organization's budget. It also seemed like an effective means of highlighting Cempa's programming, with a filming date set later this month.

In an email to Huff on Nov. 21, a separate CGI Digital employee, listed as the company's sales manager, said Cempa's video would appear on the city of Chattanooga's website in the same format as a project the company completed for Morgantown, West Virginia.

Accessible via a link on that city's website, Morgantown's version of the tour includes scrollable list of videos broken down into different subject areas, including education, economic development and health care.

Different organizations and businesses local to Morgantown have logos that ring the outside of the video player. If the viewer clicks on the logos, a video promoting each organization pops up on the screen. CGI Digital also completed an identical project for Mt. Juliet, Tennessee.

The message to Huff said the city of Chattanooga was pursuing the project because of viewership on the municipal website, which gets local pull from residents paying utility bills or searching for building permits. However, people from outside the area also represent a significant chunk of that reach, the email said. That includes people evaluating where to retire and whether to move their family or business to the city.

"These future residents, businesses, students, retirees and visitors don't know local phone numbers or local website addresses for any of the businesses and organizations," the email continued. "If they want to know what Chattanooga has to offer, it makes sense they Google the city of Chattanooga."

When searched on Google, the city of Chattanooga's website shows up at the top of more than 80 million results, the email said, and receives nearly 20,000 unique visitors each week.

Additionally, the message to Huff broke down the cost of several different video packages and the associated services that go along with those designations, which includes bronze, silver, gold and platinum levels. The company offered Cempa a nonprofit discounted price of $8,000 or $9,000 for its "platinum aerial package" if paid in full. The lowest tier -- the bronze package -- would have cost $1,500 or $2,000 with the nonprofit discount.

Smith elaborated on the decision to cancel the agreement in another phone call Tuesday.

"These projects -- when cities do them -- they're designed to promote economic development and tourism and growth," Smith said. "The more I heard about what ... some of the businesses in our town were being told, I just got an icky feeling about it that didn't feel right anymore. I think that when you're working on a project that's supposed to be good for community, it's not something that should cause confusion."

Rongo said CGI Digital works in partnership with the National League of Cities, the U.S. Conference of Mayors, and the National Association of Counties to showcase and promote counties and municipalities nationwide.

"CGI Digital apologizes to the mayor and his administration for any statements or representations made by our sales associate," Rongo said. "We are working with the individual sales associate and using this experience as a 'teaching moment' in our training of all present and future sales personnel."

Contact David Floyd at or 423-757-6249.

Upcoming Events