TCRP Project B-33: Practical Measures to Increase Transit Industry Advertising Revenues Findings, Conclusions and Recommendations September 2008

TCRP Project B-33: Practical Measures to Increase Transit

Industry Advertising Revenues

Findings, Conclusions and Recommendations

September 2008

2204/18/23 2

Agenda

I. Background

II. Research Findings

III. Conclusions & Recommendations

3304/18/23 3

U.S. Advertising: Current Situation

US advertising in a “severe slump” Down 1% in 2007 to $230B

Down another 3% in 2008

Important developments in media industry Decoupling of advertising and media services

• Advertisers no longer look to one agency to both develop media plan and develop advertising

• Recognition that there are many more media choices than TV, print, radio

Advent of specialization

• Internet

• Out-of-home

• Direct marketing

4404/18/23 4

U.S. Advertising: Current Situation

Advertiser trends

Intense pressure to show results of marketing spending is driving demand for media that:

• Can deliver sales and prove it

• Are highly targeted for maximum efficiency and effectiveness

• Can accommodate multiple ads (tailored by audience)

• Can break through the clutter

• Can “get in the face” of the consumer

• Promote consumer loyalty

• Are easy to change quickly

5504/18/23 5

Transit advertising revenue down 2% in 2007

= 3% of Total U.S. Media Spending in 2007 ($230B)

= 3% of Total U.S. Media Spending in 2007 ($230B)

2007 Out-of-Home Media Spending = $7.2B2007 Out-of-Home Media Spending = $7.2B

Source: Outdoor Advertising Association of America

574

821889 883

9941046

1109

756816 801

$0

$200

$400

$600

$800

$1,000

$1,200

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

Transit Media ($ Millions) Percent Change Vs. Prior Year

6604/18/23 6

Agenda

I. Background



7704/18/23 7

Conclusions

Transit advertising has serious image and product deficiencies, particularly among media generalists serving local and regional advertisers

Transit advertising’s positioning is neither highly motivating nor differentiated from billboards

The level of product innovation is insufficient

Aside from sales activities, there is no promotion of the product to its target audiences

The challenges of growing ad sales is greater among transit agencies not in top 20 media markets

Transit advertising sales materials are not as effective as they could be at “making the case”

The overall level of satisfaction with transit media sales reps is low

8804/18/23 8

Media Planner Survey: 153 Respondents

Director-level and above

Employed by advertising agencies, general media agencies and out-of-home media agencies, but not advertisers

Balance of major media agencies (annual billings >$50 million) and smaller agencies

National distribution

20-30 minutes, $100 incentive to participate

Media Generalist

Out-of-home Specialist

TOTAL

Clients advertise nationally 42 32 74

Clients advertise locally-regionally 60 19 79

TOTAL 102 51 153

9904/18/23 9

Per

cent

of

Med

ia P

lann

ers

Per

cent

of

Med

ia P

lann

ers

FREQUENCY OF RECOMMENDING TRANSIT MEDIA**FREQUENCY OF RECOMMENDING TRANSIT MEDIA**FAMILIARITY WITH TRANSIT MEDIA*FAMILIARITY WITH TRANSIT MEDIA*

Out-of-home specialists have greatest familiarity and recommend most frequently

24.8

52.9

11.910

41.8

29.4

40.5

53.3

27.5

15.7

40.5

28.3

5.9

2

7.1 8.3

0

10

20

30

40

50

60

Total Sample Out-of-homeSpecialist

Generalist/NationalClients

Generalist/Local-Regional Clients

Extremely familiar Very Familiar Moderately familiar slightly familiar

*“Which of the following best describes your familiarity with transit media, e.g., its products, benefits, product requirements, purchasing, etc.?”

**“How often is transit media included in your recommended plan?”

49.7

70.5

45.3

3537.3

21.6

35.7

51.7

13.1

7.8

19

13.4

0

10

20

30

40

50

60

70

80

Total Sample Out-of-homeSpecialist



Always/Frequently Occasionally Rarely/Never

BB: 86%

BB: 67%

There is an opportunity among all segments to increase familiarity, which drives recommendations

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EXPERIENCE WITH TRANSIT ADVERTISINGAgreement with statement, “I’ve had a good experience with transit advertising”

EXPERIENCE WITH TRANSIT ADVERTISINGAgreement with statement, “I’ve had a good experience with transit advertising”

Experience with transit media positive

77%

82%

74%

75%

21%

16%

24%

23%

2%

2%

2%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All Respondents

Out-of-home Specialist



Strongly Agree/Agree Neither Agree nor Disagree Disagree/Strongly Disagree

111104/18/23 11

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Transit’s greatest perceived strength: Reaching captive audiences

Other strengths: saturating a market, extending reach and frequency Not a strength: building brand awareness or building a brand’s image

% OF “BEST AT” VOTES AWARDED TO TRANSIT*P

erce

nt

of M

edia

Pla

nn

ers

*“Among transit, place-based, billboards, electronic billboards, television and the internet, which medium does the best job at…”

121204/18/23 12

0%5%

10%15%20%25%30%35%40%45%50%

Transit Billboard Place-based

With the exception of “captive audience,” billboards perceived to do everything transit does, but better

Per

cent

of

Med

ia P

lann

ers

Per

cent

of

Med

ia P

lann

ers

% OF “BEST AT” VOTES AWARDED TO TRANSIT, BILLBOARD AND PLACE-BASED

*“Among transit, place-based, billboards, electronic billboards, television and the internet, which medium does the best job at…”

131304/18/23 13

ATTITUDES and HABITS concerning TRANSIT MEDIAATTITUDES and HABITS concerning TRANSIT MEDIA

Transit seen as supplemental, second tier media

77

26

13

56

15

33

33

21

8

41

54

23

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

"Transit's best use is as asupplement to other media"

"Transit is an afterthought inmost media plans"

"Transit is only appropriatefor a small group of

categories"

"Transit needs to be pitchedto clients; they rarelyrequest it themselves"


77

26

13

56

15

33

33

21

8

41

54

23

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

"Transit's best use is as asupplement to other media"

"Transit is an afterthought inmost media plans"

"Transit is only appropriatefor a small group of

categories"

"Transit needs to be pitchedto clients; they rarelyrequest it themselves"


Over three-quarters of media planners view transit as supplemental Over half agree that transit is rarely requested for inclusion in a media plan

141404/18/23 14

Image of transit media needs updating and greater credibility

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Complicated

Clean

Sexy

Downscale

Intrusive

Hip

Expensive

Innovative

Efficient

Reliable

Effective

“Describes extremely w ell” + “Describes very w ell”“Describes Somew hat”“Describes slightly” + “Describes not at all”

HOW WELL EACH OF THE FOLLOWING ADJECTIVES DESCRIBES TRANSIT MEDIAHOW WELL EACH OF THE FOLLOWING ADJECTIVES DESCRIBES TRANSIT MEDIA

Fundamental attributes of a medium: need to

be higher

Almost 2/3rds of respondents think

transit is expensive

Perceptions of “clean” are very weak

A positive finding: “Downscale” not as

prominent an issue as expected

A positive finding: being complicated is

not a barrier

Not perceived as hip, sexy or intrusive…

Only 1 in 4 find transit media to be innovative

151504/18/23 15

0 10 20 30 40 50 60 70 80 90

Clean

Not Downscale

Hip

Not Expensive

Innovative

Efficient

Reliable

Effective

Generalists w ith Local-Regional Generalists w ith National Clients OUT-OF-HOME Media Planners

Media generalists with local-regional clients have poorest image of transit advertising

Percent saying the adjective “describes extremely well” or “describes very well”

HOW WELL EACH OF THE FOLLOWING ADJECTIVES DESCRIBES TRANSIT MEDIA

161604/18/23 16

IMPORTANCE OF MEDIA ATTRIBUTES% of media planners who rated attribute as “extremely desirable” or “highly desirable”

IMPORTANCE OF MEDIA ATTRIBUTES% of media planners who rated attribute as “extremely desirable” or “highly desirable”

MUST HAVEMUST HAVE

NICE TO HAVENICE TO HAVE

REALLY SHOULD HAVE

REALLY SHOULD HAVE

SHOULD HAVESHOULD HAVE

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

delivers exactly w hat w as bought

is a good value for the money

can target specific areas or demographic groups

has a credible audience msrmt system

has comprehensive demogr data

is flexible on flighting

has know ledgeable sales representatives

can deliver metrics for ROI evaluations

offers innovative products

is easy to execute a multi-city buy in

has reasonable production costs

has ability to get my creative team excited

simple to coordinate and execute a campaign in

is easy to learn and stay on top of

can't be TiVo'd

offers24-hr exposure

has standardized ad sizes

Most important media attributes: reliability, value, targeting, measurement

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

delivers exactly w hat w as bought

is a good value for the money

can target specific areas or demographic groups

has a credible audience msrmt system

has comprehensive demogr data

is flexible on flighting

has know ledgeable sales representatives

can deliver metrics for ROI evaluations

offers innovative products

is easy to execute a multi-city buy in

has reasonable production costs

has ability to get my creative team excited

simple to coordinate and execute a campaign in

is easy to learn and stay on top of

can't be TiVo'd

offers24-hr exposure

has standardized ad sizes

171704/18/23 17

Transit media’s strongest attributes not aligned with media planners’ most important attributes

% of respondents who said the attribute “Describes transit media completely or very well”

>75% 50% - 74% 25% - 49% <25%

CRITICAL /

MUST HAVE

Delivers exactly (47)

Good value for $ (37)

Can target (45)

Audience msrmt (14)

Comp. demo data (20)

REALLY SHOULD HAVE &

SHOULD HAVE

Know. sales reps (54)

Easy to learn (61)

Flex flighting (40)

Innovative prods (33)

Multi-city buy (41)

Simple to execute (45)

Creative team (33)

ROI metrics (16)

Reas. prod’n costs (21)

NICE TO HAVE Can’t be TiVo’d (86) 24-hr exposure (58) Std’ized ad sizes (39)

GREEN: 0 RED: 5

181804/18/23 18

Billboard’s performance on important attributes better than transit’s

% of respondents who said the attribute “Describes billboards completely or very well”

>75% 50% - 74% 25% - 49% <25%

CRITICAL /

MUST HAVE

Delivers exactly (59)

Can target (59)

Good value for $ (41) Audience msrmt (21)

Comp. demo data (22)

REALLY SHOULD HAVE &

SHOULD HAVE

Easy to learn (77) Know. sales reps (64)

Multi-city buy (56)

Simple to execute (62)

Flex flighting (38)

Innovative prods (26)

Reas. prod’n costs (28)

Creative team (35)

ROI metrics (7)

NICE TO HAVE Can’t be TiVo’d (80) 24-hr exposure (77)

Std’ized ad sizes (73)

GREEN: 3 RED: 3

191904/18/23 19

MOTIVATING POWER OF NEW MEDIAMOTIVATING POWER OF NEW MEDIA

Preferences for new media point to digital

6158

51 49

3935

27

7 6

0

10

20

30

40

50

60

70

% o

f res

pond

ents

say

ing

the

new

med

ium

wou

ld

sign

ifica

ntly

incr

ease

the

likel

ihoo

d of

thei

r re

com

men

ding

mor

e tr

ansi

t adv

ertis

ing

to th

eir

clie

nts

202004/18/23 20

Though comfortable selling transit, two-thirds of media planners don’t disagree that it’s difficult to sell

92

52

21

46

5

41

45

44

3

7

34

10

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

"I'm comfortablerecommending transit

media to clients"

"I recommend transitmore than I did in the

past"

"It's difficult to selltransit media"

"Clients' perceptions oftransit media are

positive"


ATTITUDES and HABITS concerning TRANSIT MEDIAATTITUDES and HABITS concerning TRANSIT MEDIA

Only 46% of media planners agree that clients’ perceptions of transit media are positive

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SATISFACTION WITH TRANSIT MEDIA SALES REPS

Satisfaction with sales reps shows weakness

23.5

16.5

31.1

37.9

40.5

35.1

38.6

43.0

33.8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total sample

Planners with multi-media reps (79)

Planners with transit-dedicated reps (74)

Extremely/very satisfied Satisfied Somewhat/not at all satisfied

SATISFACTION WITH MULTI-MEDIA SALES REPS

SATISFACTION WITH TRANSIT-ONLY SALES REPS

More dissatisfaction with multi-media sales reps

Only 42% of planners with multi-media reps could agree that rep spends as much time on transit as on other media

42

51

73

29

26

17

29

23

10

0% 20% 40% 60% 80% 100%

“My media sales rep spends as muchtime selling me on transit as on other

media”

“My media sales rep provides sell-intools and materials for transit that areas effective as those for other media”

“My media sales rep is asknowledgeable about transit as other

media”


32

39

43

45

51

61

38

37

42

31

37

21

30

24

15

24

12

18

0% 20% 40% 60% 80% 100%

"My transit rep provides usefuldemographic information”

"My transit rep provides effective sell-intools and materials”

"My transit rep takes time to understandmy needs and my clients’ objectives”

“My transit rep keeps me current onnew media options”

"My transit rep is knowledgeable andprepared”

“My transit rep is reliable for following upafter the pitch”

Best in class/Above Avg Average Below Avg/Worst in class

222204/18/23 22

Summary of the Obstacles to Transit Advertising Growth

1. Transit advertising’s positioning – the benefits its target audience perceives it to offer – is neither highly motivating nor differentiated from billboards;

2. Transit advertising has serious image and product deficiencies;

3. The level of product innovation is insufficient to generate interest and enthusiasm among media planners and advertisers;

4. Aside from sales activities, there is no promotion of the product to its target audiences;

5. Transit agencies not in top 20 media markets face greater obstacles to growth than those in the top twenty;

6. Transit advertising sales materials are not as effective as they could be at “making the case”;

7. The overall level of satisfaction with transit media sales reps is low.

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Agenda

I. Background



242404/18/23 24

Transit is very well positioned to grow

Media dollars are shifting out of traditional media and into alternative forms

Internet is the fastest growing medium, but out-of-home is the second fastest

Public transit ridership is increasing as fuel becomes cost prohibitive

Advertisers’ demand for new and different formats is what’s driving out-of-home’s growth…something transit could deliver

Advertisers also looking to connect in a more personal, one-on-one way with consumers…something transit does deliver

However, transit advertising has many issues to address

However, transit advertising has many issues to address

252504/18/23 25

Transit’s positioning is neither highly motivating nor differentiated from billboards

Today, transit advertising sits in the shadow of the out-of-home advertising 800-pound gorilla, billboards

Transit is seen to have the same uses as BB, but performs less well across the board

Consequently, 77% of the sample agreed that “Transit’s best use is as a supplement to other media”

All 3 media planner segments view “Reach a captive audience” as transit advertising’s greatest strength, as well as its unique strength

Our judgment and knowledge of media tells us that this is not a highly sought after media objective

Advertiser trends indicate demand for highly targeted media, and for media that can break through clutter, connect one-on-one with consumers, trigger consumer action

Transit is lacking relevance and distinctiveness in today’s advertising market

Transit is lacking relevance and distinctiveness in today’s advertising market

262604/18/23 26

Give transit a compelling positioning in its own right

Transit has something different from billboards to offer…and just as compelling

Permission to believe: Transit advertising is at eye level…in stations, outside stations, on the street, in the cars

Transit advertising can encompass a consumer…whether they are in a station domination or an interior-wrapped bus or railcar

Transit media lend themselves to innovative creative (e.g., bus wraps)

Transit media travel…customers can confront your transit ad multiple times during a day, not just at rush hour

Transit is affordable – you can be in your audience’s faces with one campaign after another

Test positioning among target audiences before launching

Recommendation #1. Reposition transit to differentiate it from billboards, elevate its importance and update its image

Transit media are the mass media that get “up close and personal” with your consumers so that they don’t just see, they experience your

brand message.

Transit media are the mass media that get “up close and personal” with your consumers so that they don’t just see, they experience your

brand message.

272704/18/23 27

Aside from direct selling activities, there is no promotion of the product to its target audiences

Many media have industry associations that focused heavily (if not exclusively) on promotion of the medium to the advertising world

Promotional tactics include

Websites for providing news and information

Events showcasing the medium’s best uses to media planners and advertisers, often in collaboration with associations of national advertisers

Advertising campaigns expressing the unique value proposition of the medium

We found no evidence of wide-scale promotion of the medium to media planners or advertisers

In the highly active and highly competitive media market, transit’s diminished presence is

a liability

In the highly active and highly competitive media market, transit’s diminished presence is

a liability

282804/18/23 28

Recommendation #2. Promote transit media among both advertisers and media planners

Commence national advertising, e.g., in professional trade journals and on websites

Develop tools to make media planners’ jobs easier

Create a searchable directory of transit agencies with demographic data and advertising sales contact information

Identify transit agencies in the directory by audiences reached, e.g., college students, the elderly, Latinos, etc.

292904/18/23 29

Recommendation #3. Create a transit media trade group

Mission: to promote sales of transit media

Activities, e.g.:

Organize industry events / showcases

Forge alliances with national advertisers

Advocate for legal and regulatory changes to permit new product development

Ease access for media planners

Develop national marketing and communications strategies

Organize and promote multi-transit agency offerings, e.g., transit agencies that serve college populations or senior populations

303004/18/23 30

Transit has serious image and product deficiencies

Most fundamental attributes perceived weakly Efficient – only 38% said this describes transit advertising Effective – only 58% said this describes transit advertising Reliable – only 50% said this describes transit advertising A good value for the money – only 37% said this describes

transit advertising

Image perceptions especially weak among media generalists with local-regional advertisers as clients

Having audience measurement, demographic data, the ability to demonstrate that what was bought was actually delivered – are all “must haves” for media planners Transit perceived to not deliver on any

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Recommendation #4. Develop a credible audience measurement system

Develop an audience measurement system to address weak perceptions of efficiency, effectiveness, value, reliability

In the short term, conduct a series of market research studies to explore/prove transit’s effectiveness

Multi city

Multi media (buses vs trains vs stations, etc)

323204/18/23 32

The level of product innovation is insufficient

Advertisers demand venues that are new, exciting, fresh – so that they can make a statement with their choice of medium

Perceptions of transit advertising as innovative, fresh, exciting are low

The product innovation ideas in the ASCs’ pipelines are not among media planners’ most highly rated ideas.

Transit agencies indicate willingness to try new media

However, advertising sales contractors perceive many transit agencies to not be fully aligned with this objective

“We want to come in and show transit authorities additional revenue opportunities, but they’re not so interested – it’s the difference between an entrepreneurial/creative business and a government bureaucracy.”

333304/18/23 33

Recommendation #5. Introduce digital and interactive (experiential) technologies to transit advertising

Get ASCs to collaborate on expediting the introduction of new media to transit

Address alignment issues within transit agencies

Appoint a director of new business development within the transit agency whose entire responsibility is driving higher advertising sales

Alert general managers that their attention will be needed in a timely manner

Explore incentives, e.g., rewarding the department driving business development with bonuses or extra spending if goals are reached

Address obstacles/disincentives to new product development in the ASC-TA contract structure

Forge a collaborative effort between ASC’s and TA’s to bring about legislative/regulatory changes needed to permit digital’s use on transit

343404/18/23 34

Transit has serious image and product deficiencies - more

Less than 1 in 10 respondents describe transit advertising as “clean”

Only 1 in 5 respondents perceive production costs to be reasonable

Less than half think that transit media offers flexible flighting

Slightly more than half think that it’s easy to do a multi-city buy in transit advertising

More than half think that advertisers’ perceptions of transit advertising are negative

353504/18/23 35

Recommendation #6. Address transit’s other product and image deficiencies

Re-position and promote transit advertising’s benefits

Disseminate examples of best-in-class creative (ads) used in transit

Further explore extent of negative advertisers’ perceptions to better inform media planners

Further explore perception of high production costs so that it can be addressed

In communications

By introduction of cost-lowering technologies

Put additional focus on keeping transit ads and their environs clean and well maintained

363604/18/23 36

The challenges of growing ad sales is greater among transit agencies not in top 20 media markets

General estimates are that 40% of transit media is purchased by national advertisers and 60% is purchased by local and regional advertisers

National advertisers generally want only top 20 media markets

It is more or less up to the media planners working with local and regional advertisers to drive ad sales growth for transit agencies outside of top 20 markets

This study shows that media planners whose clients are local and regional advertisers have the least favorable image of transit advertising

This group is the least enthusiastic and most skeptical. Most of all, because they are working with the smallest budgets, they need to be convinced of transit advertising’s value for the money.

373704/18/23 37

Recommendation #7. Develop specific strategies to promote ad sales of transit agencies outside top 20 markets Arrange individual meetings with media planners serving local and

regional clients

Advertising sales contractor and transit agency do meeting together

Tailor marketing pitch using each segment’s specific beliefs and attitudes about transit advertising, as outlined in this study

Use new positioning and market studies to change media planner’s image of transit advertising’s effectiveness

Promote groups of transit agencies that reach audiences in high demand

E.g., all transit agencies that serve college towns

E.g., all transit agencies that serve Latino markets

E.g., all transit agencies that serve senior markets

Make this information searchable in the transit agency database

383804/18/23 38

Transit advertising sales materials are not as effective as they could be at “making the case.”

Media Planners see deficiencies in the sell-in tools and materials the receive on transit

Media Planners not getting the measurement data they “must have”

Many media planners agree that “it’s difficult to sell transit media to advertisers” (21% agree and 45% are on the fence)

We found no evidence of a selling message other than “extends reach and frequency,” which is of value, but not distinct

Extremely/very Desirable

Describes

Transit completely/very

well

“has a credible audience measurement system” 88% 14%

“has comprehensive demographic data” 86% 20%

393904/18/23 39

Recommendation #8: Arm sales force with information, research, case studies (and ultimately, measurement) Re-position transit to give it a more compelling benefit and to

differentiate it from billboards

Produce high quality sales materials targeted to media planners A brochure expressing the benefits and best uses of transit, as well as

success stories

Evidence of transit’s effectiveness and efficiency via a credible research study of in-market usage

Information on exactly what they’re selling – routes, times, locations for every market

Information on competing out of home media – locations, cost, availability, etc.

In collaboration with media planners, produce high quality sales materials targeted to advertisers To use in direct to advertiser sales opportunities

For use by media planners in their pitches to advertisers

Provide media planners with the necessary information to prepare post-buy analyses to communicate exactly what was bought

404004/18/23 40

Media planners with multi-media reps are less satisfied than are planners with transit advertising dedicated sales reps

58% either disagree or are on the fence re: “My media rep spends as much time selling me on transit as on other media.”

Our research confirmed that the practice of offering less commission for transit ad sales than for the sale of company-owned media exists; it is unknown how widespread this practice is

The overall level of satisfaction with transit media sales reps is low

Total sample Planners with multi-media sales

reps

Planners with transit-dedicated

reps

Extremely/very satisfied 24% 17% 31%

Satisfied 38% 41% 35%

Somewhat/not at all satisfied 39% 43% 34%

414104/18/23 41

Recommendation #7: Address the dissatisfaction with sales reps among media planners

Establish sales performance measures and hold ASCs accountable to them

To the extent that they exist, remove financial disincentives of selling transit for multi-media reps

Conduct further research to gain more detailed insights on drivers of dissatisfaction

424204/18/23 42

Recommendations for the Proposed Media Trade Organization

1. Develop the national transit media advertising campaign (Recommendation #2).

2. Provide guidance (e.g., selling messages about the benefits of transit advertising) for the development of sales tools and materials to help sales reps be more responsive to media planners and advertisers (Recommendation #8).

3. Commission market research documenting the effectiveness of transit advertising (Recommendation #8).

4. Lead the effort to establish a more effective way to portray demographic information depicting transit advertising’s audiences (Recommendation # 8).

5. Organize conferences that showcase transit media to media planners and advertisers and include a competition showcasing best-in-class transit advertising (Recommendation #2).

More…More…

434304/18/23 43

Recommendations for the Proposed Media Trade Organization

6. Lead the effort to develop an audience measurement system (Recommendation #4).

7. Develop tools and information for media planners to make it easier for them to use transit media (Recommendation #2).

8. Advocate for legal and regulatory changes necessary to permit new product development (Recommendation #5).

9. Develop “package” offerings comprising the advertising space of multiple transit systems (Recommendation #7).

10.Charter a work group to develop strategies to expedite the introduction of new technologies (Recommendation #5).

444404/18/23 44

Recommendations for Transit Agencies

1. Commit to supporting the internal effort required to drive advertising sales growth Management needs to make themselves available for timely decision-

making on such topics as introducing new advertising platforms (e.g., digital) and pursuing lucrative, but possibly new, opportunities with important advertisers.

Appoint an entrepreneurial advertising director within the transit agency whose charge is to drive sales as high as possible, within reasonable limits.

Decide that the agency can tolerate the degrees of risk that typically accompany new business development efforts.

2. Locally assess the performance of the sales force and address underperformance as warranted

3. Set performance targets and hold sales organization accountable to them

4. Find a mutually acceptable approach to pursuing the introduction of new products and technologies with sales contractors

5. Require sales contractors to deliver periodic new product development progress reports along with business reviews

454504/18/23 45

Recommendations for Advertising Sales Contractors

1. Find a mutually acceptable approach to pursuing the introduction of new products and technologies with transit agencies

2. Provide better sales training and materials and assess sales incentive structures

3. Survey clients – both advertisers and media planners – on how their needs can be better met

4. Apply the information in this study to tailor the sales pitch by type of media planner Out-of-home specialists are transit advertising’s biggest fans. They just

need to be given more reasons to use transit as frequently as they use billboards

Media generalists with national advertiser clients are also big fans of transit. Most critically, this audience needs to be convinced of transit’s effectiveness

Media generalists with local/regional clients, as we have seen, are the least enthusiastic and most skeptical. Most of all, they need to be convinced of transit advertising’s value for the money

464604/18/23 46

Prioritizing Next Moves

IMMEDIATE LONGER TERM

Extremely high value

Test proposed positioning Create transit advertising trade

organization Website /resources for media

planners Effectiveness studies Focused, compelling sales

message and materials TA new business director More insight on low sat with

sales reps

Audience measurement system

Innovative new products Address sales force lack of

satisfaction Advertising & promotion Address obstacles to new

product development

High value

Focus on clean Collect and disseminate best-in-

class transit advertising

Joint promotion with other in-street media

Explore high production costs Explore (and seek to disprove)

negative perceptions of transit advertising among advertisers

474704/18/23 47

End of Presentation

TCRP Project B-33: Practical Measures to Increase Transit Industry

Advertising Revenues

Principal Investigator:Jane Alpers, Executive Vice President

Denneen & Company, Boston, [email protected]

Draft 3 02 04 09

Documents

TCRP Project B-33: Practical Measures to Increase Transit Industry Advertising Revenues Findings, Conclusions and Recommendations September 2008