Tapping into Transit
San Diego MTS Naming Rights
California Transit Association November 18, 2015
The Dark Days of 2009
– State took our money – We were all scrambling to
reduce costs • Employee layoffs
– MTS reduced management positions by 20%
• Reduced employee benefits • Fare increases
– From $64/mo to $72/mo in 2 yrs.
– Service reductions
– Rethink non-fare revenue strategies
Diverse non-fare revenue sources – Railroad Right of Way -- $1 million – Real Estate -- $1.9 million – Advertising -- $2 million – Station Activations -- $250,000 – Concessions/Vending -- $500,000 – MTS-TV -- TBD
Bus Advertising Policy
The Naming Rights Deal – RFP for a firm with Naming Rights
expertise – Superlative Group
• Did the Health Line in Cleveland plus sports • Teamed up with IMG
– The Superlative process • Asset Evaluation • Letters of Interest vs. RFP • Negotiations • CEO/Board member participation in meetings
Rapid Network
Monetizing Assets Trolley Map
Mid-Coast Extension • 11.5 miles • 20,000+ new riders • UC San Diego
– 60,000 students, faculty and staff
• Major Employment • Dense Residential • One-seat ride from
border • Direct link to downtown
and Trolley network
Based on 324 million impressions per year, what would an advertiser expect to pay?
Based on 81,000,000 impressions in each medium
Media CPM Cost
Radio $12.92 $1,000,000 TV $12.03 $1,000,000 Billboard $ 2.56 $ 200,000 Print (UT) $10.28 $ 800,000 Total $3,000,000
Considerations – That’s a lot of money!
• MTS wanted at least $1 million per year
– It’s a big commitment for agency • Reprinting signs at stations • Reprinting timetables and other collateral • Meeting with local planning groups
– Big commitment for Naming Rights Partner • MTS wanted a long-term commitment of at
least 10 years
Creating Impressions
Trolley Wraps (6) Station Names (3) Freeway/Street Bridges (3) Station Activations (6) Station Signage
• Destination • Line Designation • Route Maps • System Maps
On-Board Signage • Route Maps • System Maps
Printed/Web/Digital • Timetable • Pocket Guide • One-way Tickets • WiFi and Digital Ads
$36 Million Contract – 30 years – $675,000/year until Mid-Coast is
complete – $945,000/year upon completion – Increases with CPI
• Uses historical average of 3%
– Value increases to $1.85 million/year by end of contract
Who We Are – UC San Diego Health
15
7500+ Employees
850+ Physicians
563-bed Health System
$1.7+ Billion Operating
Budget
Two Campuses: La Jolla and Hillcrest
Business Drivers for Partnership Strategy
One of the most competitive health care markets in the U.S. Some of the most expensive advertising rates in the U.S.
Two well established competitors with mature positioning and high level of brand awareness
2011-2015
Partnership 1 – North County Transit District
Partnership 2 – UC San Diego Campus Buses
Summary County discharges peaked in 2011 and
have trended down 3.0% through 2014 while we grew 6.5% from 2011 to 2014
Market share grew from 9.2% to 10.1% over the same period
Transportation partnerships are undervalued marketing assets
Accurate valuations of transportation assets allow them to be competitive with traditional advertising