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64 a costly one, as technology often is, then the contractor will for local and regional advertisers have the least favorable views most likely want a new payment structure to compensate it for of transit media. And the advertising assets, themselves, most the major capital outlay on assets it does not own. Protracted likely cover the spectrum from very attractive (e.g., a highly negotiations ensue, or maybe a competitive bidding process is populous second-tier city with a large bus system) to not-very launched, and new product development is delayed, and attractive (e.g., a very limited bus system serving a widespread delayed some more. rural population). Yet doubling transit advertising sales will require strategies for both segments of transit agencies. Spe- cial initiatives are required to help sell transit advertising in the Conclusion 4: Aside from Sales Activities, nontop-tier markets. There Is No Promotion of the Product to its Target Audiences Conclusion 6: Transit Advertising Sales Target audiences need to hear marketing messages--the Materials Are Not as Effective as They high-level benefits associated with purchasing or consuming Could be at "Making the Case" the brand, as expressed in the positioning statement--as well as sales messages--the detailed features and specifications of An important finding regarding the sales process is that the product. To the knowledge of the research team, there is media planners' needs for demographic data on target audi- little communication of transit's benefits, aside from what ences and other selling materials are not being met. Lack of individual transit sales representatives convey. Certainly, no demographic data, as well as industry-wide standards and single message is being consistently conveyed. Nor did the protocols for collecting and reporting the data, are serious interviews surface any other promotional activities intended deficiencies for transit advertising, affecting its credibility to generate awareness of or interest in transit media among and therefore its usage. Lack of other selling materials is an media planners and advertisers. issue for individual transit media sales representatives, who Many media have industry associations that focus exclu- would benefit from support from an industry-wide market- sively on increasing sales. These media trade associations ing resource. showcase their media to media planners and advertisers via industry-wide conferences. They conduct research to prove Conclusion 7: The Overall Level of the media's effectiveness, and they organize industry-wide Satisfaction with Transit Media Sales efforts to make changes necessary to build business (e.g., fight Representatives Is Low harmful legislation, develop measurement systems). APTA, the trade group for transit authorities, is a general trade group, Media planners find transit sales representatives, on the and therefore not focused on increasing the value of the whole, to be knowledgeable, responsive and reliable. Media advertising assets. planners give transit sales representatives credit for taking time to understand the business issues that the media planners are trying to address, rather than going straight to space avail- Conclusion 5: Transit Agencies not in Top 20 ability and pricing. However, when asked about their overall Media Markets Face Greater Obstacles to satisfaction with transit sales representatives, media planners' Growth than Those in the Top 20 scores are low. Thirty-nine percent of respondents said they General estimates hold that 40% of transit media is pur- are only somewhat or not-at-all satisfied. Moreover, the 52% chased by national advertisers and 60% is purchased by local/ of respondents who have sales representatives that sell transit regional advertisers. The opportunity to sell more transit along with other media are significantly less satisfied than the advertising to national advertisers is great: national advertis- 48% of media planners with transit-only sales representatives. ers are putting more and more marketing dollars into non- traditional media. Moreover, the transit advertising inventory Recommendations in the largest U.S. cities--major downtown bus routes, com- muter rails, subway and light rail systems--is very attractive Overall Recommendations to national advertisers. So transit media in top 20 media mar- Recommendation 1: Reposition Transit Advertising kets are already in demand. Implementation of some of the to Differentiate it from Billboards, Elevate its recommendations in this study can drive transit media sales Importance and Update its Image in the top 20 markets even higher. For nontop 20 markets, however, the upside potential is Transit advertising has significant upside potential. Transit less clear. These cities are typically not highly in demand by is part of the out-of-home media sector, the second fastest national advertisers. The generalist media planners who work growing segment of the media industry behind Internet

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65 advertising. Also, transit has features that align quite well media planner's or the advertiser's interest in the product with trends in advertisers' needs. The good news is that the and generates receptivity to receiving a sales call. research team did not find a lot of problems that cannot be If resources prohibit a national campaign, then the recom- fixed. The bad news is that there are a lot of problems that mendation would be to focus the marketing effort on the need to be fixed. top 20 media markets. Along with this advertising campaign The upside growth opportunity for transit is greatest if the must go a transit advertising website, to not only reinforce the most significant perception issues are addressed: (1) transit selling messages but to provide information and resources media are viewed as a substitute for billboards, in the sense that useful to media planners and advertisers and to capture the they deliver the same media objectives (e.g., builds awareness, names of those interested enough to make inquiries. extends reach and frequency); (2) transit media are viewed as Other forms of promotion would also help to generate supplemental in a media plan, i.e., a nice-to-have-if-there's- advertising sales growth. At the top of this list is conducting budget-available, instead of as a core part of a media plan; and events that showcase transit advertising to media planners (3) transit media are not perceived to be innovative, exciting or and advertisers. Transit could immediately explore opportuni- contemporary. ties to participate in the events that the Outdoor Advertising The recommendation is that transit evolve its "captive Association of America already produces for these audiences audience" positioning to become the medium that surrounds on an annual basis. Also at the top of the list is developing case consumers, touching them multiple times during their daily studies of best-in-class transit advertising. A commonly used travels. Through repeated eye-level encounters, transit media vehicle for identifying and promoting these examples is an offer advertisers the chance to let their consumers experience awards ceremony sponsored by the media trade group (see their advertising/offering several times on a daily basis. Tran- Recommendation 3). Another recommendation is develop- sit media will come to be seen as a critical part of any audience ing a set of tools that make it as easy and straight forward as exposure experience. A positioning along these lines differen- possible for media planners to include transit in their plans. tiates transit media from billboards, elevates transit media's One such suggestion is a search engine for identifying the importance, and updates transit media to today. advertising sales contact for every transit agency in the United The recommended positioning for transit media is the States. Also recommended is including brief descriptions of following: the advertising assets (i.e., quantity, size, location, size of audience, audience demographics) of all transit agencies in this data base. Transit media are the media that get "up close and personal" A particularly interesting idea is to jointly promote tran- with your consumers so that they don't just see, they experience your brand message. sit media with street furniture, taxicab tops, and bus shelters as a larger category of out-of-home media, perhaps called "street media." Transit would increase its chances of winning This positioning updates transit media's main role to one the attention of media planners and advertisers if its size that is very much in demand among advertisers today. It also were more substantial. Teaming up with other in-the-street gives transit media a more important, more compelling ben- media for exhibitions or conferences, for example, would be efit. In addition, it communicates that the reach of transit a way to accomplish this objective. media goes beyond public transportation riders, an assump- tion that is still widely held, according to the research. Finally, Recommendation 3: Create a Transit it differentiates transit from billboards, which are most often Media Trade Group not at eye level. The creation of a transit advertising industry group that exists to promote the medium--just like the Interactive Recommendation 2: Promote Transit Media Among Advertising Bureau, the Outdoor Advertising Association Both Media Planners and Advertisers of America and the Cable Television Advertising Bureau (all Transit media would benefit significantly from an advertis- outlined in Chapter 1)--is recommended. Implementation ing campaign communicating the new positioning of transit to of the core recommendations of this growth plan is wholly media planners and advertisers. With both groups, the goal dependent on the formation of this group. The research would be to convince them of the benefit of using transit team knows of no organization currently in a position to advertising and to overcome some of the negative beliefs drive the efforts required to produce growth of the magni- and imagery they hold about transit media. An advertising tude desired. APTA has many more issues on its large plate program is a needed complement to the one-on-one efforts than growing advertising revenue. Establishing an entity of the sales force. Done properly, advertising heightens the focused on promoting transit advertising gives transit the

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66 attention it needs and puts it on an even playing field with its Recommendation 5: Introduce Digital and many media competitors. Interactive (Experiential) Technologies On the agenda for a transit media trade group are many to Transit Advertising activities: A positioning is only credible and sustainable if it is true. Develop the national transit media advertising campaign Transit advertising, as known today, certainly is "up close and (Recommendation 2). personal" with consumers by virtue of being at eye level and Organize conferences that showcase transit media to media often close enough to touch. However, two-sheets and bus planners and advertisers (Recommendation 2). kings are no longer enough in a media environment that is Provide guidance (e.g., selling messages about the benefits already embracing digital and interactive formats. Transit of transit advertising) for the development of sales tools and advertising needs to become digital and interactive, itself, as materials to help sales representatives be more responsive soon as possible. To be too far behind this important trend to media planners and advertisers (Recommendation 8). will only reinforce some of the unhelpful imagery already Commission market research documenting the effective- associated with transit media. ness of transit advertising (Recommendation 8). Success in introducing new products and technologies will Lead the effort to establish a more effective way to portray require stronger partnerships between transit agencies and demographic information on transit advertising's audiences sales contractors than, by many accounts, exist today. Adver- (Recommendation 8). tising sales is far from the primary business of public transit Lead the effort to develop an audience measurement system agencies. Moreover, being subject to public scrutiny, transit (Recommendation 4). agencies are, perhaps prudently, risk averse when it comes to Develop tools and information for media planners to make their advertising. However, without the commitment of the it easier for them to use transit media (Recommendation 2). transit agency to pursue new advertising ideas, and without the Advocate for legal and regulatory changes necessary to proper financial motivation for both parties, innovation in permit new product development (Recommendation 5). transit advertising is unlikely to happen. Develop "package" offerings comprising the advertising An important sub-recommendation, therefore, is that tran- space of multiple transit systems (Recommendation 7). sit agencies and sales contractors negotiate what it will take to Charter a work group to develop strategies to expedite the make new products and technologies happen on a timely basis. introduction of new technologies (Recommendation 5). As noted earlier, this could be an opportunity for an industry- level task force charged with developing optimal contracting strategies for collaborations on bringing new technologies to Recommendation 4: Develop a Credible Audience transit advertising. Measurement System As noted among the findings and conclusions, transit Recommendation 6: Address Transit Media's media's image suffers from skepticism about its effectiveness, Product and Image Deficiencies its reliability, its efficiency and its value for the money. All of these concerns will be addressed if/once transit media become Repositioning transit advertising and introducing audi- measurable. For this reason, the research team posits that if ence measurement and innovative new products will go far in instituting an audience measurement system were the only addressing transit advertising's image and product deficien- recommendation the transit media industry achieved, there cies. However, additional product and image issues require would still be a great impact on transit advertising sales. individual attention. The first is the perception that transit The billboard advertising industry was expected to launch media are not clean. Transit's lack of cleanliness could very its audience measurement system in fall 2008. A Wachovia well affect many other media planner perceptions and atti- Capital Markets equity research report from January 2007 tudes, including being somewhat difficult to sell to advertis- estimates that the addition of a measurement system will lead ers. Media planners who work frequently with transit know to the more than doubling of billboard's share of advertising, which transit systems are very well maintained, and which are adding $7 billion of revenue (25). Joseph Philport, President not; this knowledge factors into their decisions about whether and CEO of the TAB, says that developers of the billboard to recommend a particular transit system. measurement system have identified transit as the next out- The second issue is the perception of high production costs. of-home medium to have a measurement system developed Seventy-five percent of media planners in the survey said that (personal communication, October 31, 2007). The transit production costs is an important feature of media. Only 20% advertising industry needs to establish contact with this group of respondents said that "reasonable production costs" was and take advantage of any assistance offered. true of transit. Because the survey of media planners did not

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67 permit exploration of this issue in any depth, additional qual- in-house sales teams) needs more effective sales materials as itative research is recommended to gain greater insight into soon as possible. In the absence of an audience measurement the drivers of this perception. system, transit could conduct a multi-site effectiveness study The third issue is media planners' perception that advertisers quantifying the impact of transit advertising campaigns. The have negative perceptions of transit. This perception could results of this study could be developed into a brochure artic- explain why two-thirds of media planners are either on the ulating the new positioning of transit advertising and using fence or in agreement with the statement "It's difficult to sell the creative approach developed for the national (or top city) transit media." The limited number of respondents to the advertising campaign. advertiser survey revealed a mixture of perspectives. A survey of Along with this brochure, case studies showing transit advertisers one year after transit media promotion commences advertising at its most fresh, most exciting and most high is recommended. Transit media sales to media planners would impact could be told. Transit also needs to take the first step be greatly aided by data disproving advertisers' negativity. to developing credible demographic information by making inquiries with market research companies about obtaining Recommendation 7: Develop Specific Strategies to better quality data. Promote Ad Sales of Transit Agencies Outside of the Top 20 Markets Recommendation 9: Address Media Planners' Dissatisfaction with Sales Representatives The first strategy for nontop 20 markets is to tailor com- munications to the correct target audience. Based on the sur- From the data can be inferred that a portion of media plan- vey, this audience will most often be the media generalists with ners' dissatisfaction with transit media sales representatives local/regional clients. This is the audience with the greatest must be attributable to sales representatives' inability to provide need to be convinced about the value of transit media. There- the basic measurements, tools and information that media fore, the messages, and perhaps even the sales approach, need planners expect. However, other factors may be having an to be tailored to address this audience's particular concerns influence as well. The data suggest that transit sales represen- and biases about transit media, as highlighted in this study. tatives are overall pretty average at making the effort to Another strategy is to bundle nontop 20 markets into understand the media planner's needs and the advertiser's unique, high-value offerings. For example, all of the markets objectives, which is very important to media planners. The that serve colleges could be bundled and offered as a package. research was limited in diagnosing the issues beyond this. For In one transaction, media buyers could purchase the entire this reason, additional research among media planners is public transit network serving U.S. college students. Similar recommended to further explore ideas for increasing media "packages" could be developed around public transit lines serv- planners' satisfaction with transit media representatives. ing communities dense with any desired demographic, e.g., the A striking finding of this study was the significant difference Latino community, business executives, the elderly, etc. in media planner satisfaction with multi-media sales represen- Another recommendation is to create a centralized, search- tatives versus transit-only sales representatives. The study offers able electronic data base including profiles of all public transit evidence that multi-media representatives do not give as much agencies' advertising inventory. (This was already mentioned sales time to transit as they do to other media. Sources have as part of Recommendation 2.) Each public transit system is reported cases in which multi-media representatives are offered unique in terms of its ridership; its size; types of vehicles; a greater commission for selling other media than for selling whether it is urban, suburban or mixed; whether it allows full transit. The difference between the sales contractor's margins bus wraps or not; and many other details of interest to media on transit media sales (at best 15% to 20%) versus on sales of planners and their clients. Transit advertising in a nontop 20 media they own (40%) lends credence to this report. Because market may be perfect for a media plan, but the market might roughly half of media planners have a multi-media sales repre- not come to mind for the media planner, and therefore goes sentative, this compensation structure poses a significant overlooked. A searchable data base seems to be an essential tool obstacle to transit media sales growth. A sub-recommendation, for media planners that could help raise the visibility of the therefore, is to call on sales contractors to remove any financial transit advertising opportunities in markets beyond the top 20. disincentives to selling transit media that exist. Recommendation 8: Arm Sales Force with Recommended Actions Information, Research, and Case Studies (and for Each Stakeholder Ultimately, Measurement) The recommendations in the previous sub-section are The transit media sales force (comprising all advertising intended for the "business owners." In this case, the business sales contractor representatives as well as transit agencies' owners are three parties: transit agencies, their advertising

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68 sales contractors, and APTA. These three parties along with tising platforms (e.g., digital) and pursuing lucrative, but the proposed transit advertising trade association are stake- possibly new, opportunities with important advertisers holders in advancing the initiatives for growth. Some spe- Appointment of an entrepreneurial advertising director cific recommendations for each stakeholder follow. within the transit agency whose charge is to drive sales as high as possible, within reasonable limits Institutional tolerance for the degrees of risk that typically APTA accompany new business development efforts The research team recommends APTA either form or endorse formation of an independent transit advertising trade Transit agencies also need to address two issues that were association (Recommendation 3). raised as obstacles in this report. The first issue is the under- performance of the advertising sales force. Transit agencies owe it to themselves to understand the contractor's possible Proposed Independent Transit Advertising competing priorities. As mentioned previously, these compet- Trade Association ing proprieties would most commonly take the form of owner- The envisioned transit advertising trade association will play ship of billboards in the same geography. If the sales contractor a critical role in elevating the industry's advertising sales. As owns billboards in the transit sales area, then chances are that already noted, this association's near-term agenda includes the the sales representative selling transit advertising space is following items: also selling billboards, and could possibly be working under a commission structure that rewards billboard sales more than Develop the national transit media advertising campaign transit advertising sales. (Recommendation 2). More broadly, transit agencies need to do a better job hold- Provide guidance (e.g., selling messages about the benefits ing their sales contractors accountable for performance. The of transit advertising) for the development of sales tools and advertising sales contractors are paid considerable sums by materials to help sales representatives be more responsive the transit agencies, and they should be expected to deliver to media planners and advertisers (Recommendation 8). better service to transit's customers (media planners and Commission market research documenting the effective- advertisers) than this study shows that they currently do. Bet- ness of transit advertising (Recommendation 8). ter attention paid to transit sales by the sales force will have a Lead the effort to establish a more effective way to portray substantial impact on advertising sales. demographic information depicting transit advertising's The second issue that transit agencies need to address with audiences (Recommendation 8). their advertising sales contractors is the introduction of new Organize conferences that showcase transit media to media technologies. As this report has highlighted, introducing more planners and advertisers and include a competition showcas- innovative advertising platforms is critical to transit advertis- ing best-in-class transit advertising (Recommendation 2). ing's future growth. Yet contract terms between transit agencies Lead the effort to develop an audience measurement system and sales contractors have been frequent culprits in hamstring- (Recommendation 4). ing development efforts. Having touched upon most of the Develop tools and information for media planners to make areas of transit advertising in the development of this study, the it easier for them to use transit media (Recommendation 2). research team is in a position to say that no other issue causes Advocate for legal and regulatory changes necessary to as much stress to both parties as this one. The best recommen- permit new product development (Recommendation 5). dation is that an industry-level task force be commissioned to Develop "package" offerings comprising the advertising develop some contracting guidelines that better anticipate the space of multiple transit systems (Recommendation 7). introduction of new technologies than current contracts appear Charter a work group to develop strategies to expedite the to do. It is possible that some best practices are already emerg- introduction of new technologies (Recommendation 5). ing from actual experiences, and these should be disseminated. Transit Agencies Advertising Sales Contractors First and foremost, the leadership of transit agencies that Advertising sales contractors need to get reenergized about want to grow their advertising sales must decide that they are selling transit advertising. Having sales materials with a more committed to supporting the internal effort required to do so. compelling, updated message about the benefits of transit As referenced in this report, the internal effort requires the advertising should help. Also, having studies proving the following: effectiveness of transit advertising should help as well. By far, Management's willingness to make themselves available for however, the best motivator for the sales force will be having decision making on such topics as introducing new adver- exciting new advertising platforms to sell. Previously, transit