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Practical Measures to Increase Transit Advertising Revenues (2009)

Chapter: Chapter 4 - Conclusions, Recommendations and Further Research

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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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Suggested Citation:"Chapter 4 - Conclusions, Recommendations and Further Research." National Academies of Sciences, Engineering, and Medicine. 2009. Practical Measures to Increase Transit Advertising Revenues. Washington, DC: The National Academies Press. doi: 10.17226/14269.
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62 Conclusions The overarching conclusion is that transit advertising is well positioned to grow, assuming that the overall economy cooperates and the advertising business as a whole keeps grow- ing. The outlook from organizations that track media trends is that the shifting of dollars out of traditional media and into non-traditional formats will continue. In particular, out-of- home media, as a category, will remain one of the fastest grow- ing sectors of advertising spending. This forecast is consonant with the belief that the benefits offered by transit advertising align well with the current needs of advertisers. However, as a medium in competition with billboards, news- papers, place-based advertising, the Internet, and other new media still in development, transit advertising lacks credibility, relevance and distinctiveness in today’s advertising market place. The research team has concluded that the following issues are at the core of transit advertising’s growth challenge: 1. Transit advertising’s positioning—the benefits it is per- ceived by its target audience to offer—is neither highly motivating nor differentiated from billboards. 2. Transit advertising has serious image and product defi- ciencies. 3. The level of product innovation is insufficient to gener- ate 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 20. 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 representatives is low. These conclusions are synthesized from many individual findings from the research. A few of the most significant find- ings are these: • Transit advertising’s greatest perceived strength is in reach- ing captive audiences. • With the exception of reaching captive audiences, bill- boards are perceived to fulfill every function that transit media offer, only better. • Transit is seen as a supplemental, second tier medium. • Transit media’s strengths are not aligned with what is most important to media planners. • Perceptions that transit media are effective, reliable and efficient are moderate to weak. • Perceptions that transit media are expensive are prevalent. • Perceptions that transit media are not clean are prevalent. • Perceptions that transit media are innovative are not prevalent. • Perceptions that transit is a downscale medium are not prevalent. • Media planners’ experience with transit media is largely positive. • The media planners with the most opportunity to recom- mend non–top 20 market transit advertising have the least favorable view of transit media overall. • Overall satisfaction with sales representatives is low. • Overall satisfaction with sales representatives is lower for the representatives who sell transit plus other media than for representatives who sell only transit. • More than half of media planners are not able to agree that advertisers’ perceptions of transit media are positive. • Preferences for new media point to digital. The following sub-sections elaborate on each conclusion and the findings supporting it. Conclusion 1: Transit Advertising’s Positioning Is Neither Highly Motivating nor Differentiated from Billboards The media planner study showed that what is perceived to be unique about transit advertising is its ability to reach a C H A P T E R 4 Conclusions, Recommendations and Further Research

63 captive audience. This media objective is typically secondary or tertiary, behind such core media objectives as “build brand awareness,” “improve brand image” and “trigger a consumer response.” This second tier positioning was echoed by the finding that transit is viewed by the majority of media plan- ners as a supplemental medium, but not a medium that is typically core to a media plan. In addition, transit is viewed as being very similar to bill- boards in terms of usefulness in a media plan. Both platforms extend reach and frequency, achieve market saturation, and break through clutter. However, billboards consistently score higher than transit in the ability to achieve these media and marketing objectives. Also, media planners’ ratings of bill- boards’ ability to deliver highly desirable media features— such as delivering exactly what was bought and targeting spe- cific areas or demographic groups—are also significantly higher than transit’s ratings. Conclusion 2: Transit Advertising Has Serious Image and Product Deficiencies The majority of media planners in the study said they are very familiar with transit advertising and have had good expe- riences with transit advertising. However, transit advertising has a credibility problem. Forty-two percent said that “effective”— the most fundamental requirement for any medium—is not highly descriptive of transit advertising. Sixty-two percent of respondents said “efficient”—the second most fundamental requirement for a medium—is also not highly descriptive of transit advertising. These are high percentages of media plan- ners who are clearly not convinced that transit advertising works or is worth the money. The data confirm this: transit also rates quite low on the important feature of being a good value for the money. Transit also got low scores on “reliable,” “innovative,” and “clean.” On a positive note, “downscale” was not highly associated with transit advertising’s image among media planners. Aside from these image issues, there are issues with the product itself. Media planners view transit as dirty, not flexi- ble and expensive to produce. Also, transit is deficient in being able to deliver audience measurements of any kind. This last feature was shown to be of extremely high impor- tance to media planners as they select media to recommend. Conclusion 3: The Level of Product Innovation Is Insufficient to Generate Interest and Enthusiasm among Media Planners and Advertisers Very often, advertisers demand media opportunities that are new, exciting, fresh and cutting edge. They are looking to maximize the chance that their ads get noticed, as well as per- haps add to their brand’s reputation as a trend setter. Transit advertising is quite far away from being able to offer this ben- efit. The media planner survey showed that transit media are not widely viewed as innovative, hip or sexy. Bus wraps and station dominations are the right idea—high impact, atten- tion grabbing and show stopping. However, these products do not define the entire medium. The new product ideas that rose to the top of the media planner survey involved digital technology: digital displays on platforms and in stations, as well on buses and trains. In the interviews with advertising sales contractors, the research team heard mention of limited exploratory work in the digital realm, and none in the interactive realm. How- ever, the following ideas were mentioned: video screens installed in rail cars and buses (the third highest rated new product idea behind the two digital options), electrolumi- nescent panels that remain illuminated on the side of a bus in the dark, and hanging hand grips for trains and buses that carry ad space. The interviews led the research team to perceive issues that may be among the key obstacles to new product development and introduction: transit agency and sales contractor incen- tives to pursue new products are misaligned. The issues are both organizational and contractual. Public transit agencies, the owners of transit media, have a primary business, and it is not advertising. It is therefore not surprising to hear sales contractors gripe about losing sales opportunities because of the transit agency’s inability to respond quickly enough. Neither is it surprising to hear sales contractors’ perceptions that transit agencies sometimes seem to lack openness to new product ideas. Because advertising is generally less that 5% of operating revenue, yet carries with it high risk of public condemnation, the whole subject is a bit of a lightening rod for transit agencies. However, if transit agen- cies want to see their revenue from advertising grow, they need to embrace it. The contractual issues are their own quagmire. There is no shortage of small companies out there who have innova- tive ideas for advertising space in and on public transit. However, any transit agency that has contracted a sales company to sell their advertising space is going to get strong push-back from the contractor to not deal with new media companies. From the sales contractor’s perspective, any new media company is direct competition, and the first cus- tomers it will call on are those of the sales contractor. The research team was informed that attempts to restrict a new media company from poaching the sales contractor’s cus- tomers rarely work. For this reason, transit agencies often grant their sales con- tractors the right to be the first company asked to develop a new technology. The research team has seen transit agencies run into difficulties in this scenario, as well. If the new technology is

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

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

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

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

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

agencies were recommended to be more aggressive and perhaps more accommodating in order to get new technologies intro- duced. Advertising sales contractors must do the same. Advertising sales contractors must also now take advantage of the data in this study that profile types of media planners. They can now apply the data about attitudes and beliefs, media “must haves,” perceptions about what transit advertis- ing does well and does not do well, and image perceptions of transit advertising to tailor their sales pitches by type of media planner, as follows: • Out-of-home specialists are transit advertising’s biggest fans. They just need to be given more reasons to use tran- sit as frequently as they use billboards. Presenting them with studies proving transit’s effectiveness and providing better demographic data on transit advertising’s audiences are both very important. Also, showing examples of partic- ularly effective uses of transit media will be very effective with this audience. • Media generalists with national clients are also big fans of transit. Most critically, this audience needs to be convinced of transit’s effectiveness. Until such time as an audience measurement system is in place, studies proving transit advertising’s effectiveness will have to stand in. Also, bet- ter demographic information is a critical part of the sale of transit advertising to advertisers, so the transit advertising industry needs to develop a standard and effective way to portray this information. • Media generalists with local/regional clients, as we have seen, are the least enthusiastic group. Almost two-thirds of them claim to be very familiar with transit advertising, yet this group’s frequency of usage is the lowest of the three seg- ments. This is the group of media planners that most fre- quently puts transit advertising in competition with all other media types for inclusion in the media plan, not just other out-of-home media. In addition, these planners are working with the smallest media budgets. As a result, they are the most skeptical about transit advertising’s value for the money. They also score transit advertising the lowest of the three seg- ments on the effectiveness of transit advertising. Again, addressing the concerns of this segment requires presenting data demonstrating transit advertising’s effectiveness, as well as its value for the money. This last part will be hard to prove without an audience measurement system. Finally, sales contractors must discontinue any practices that disadvantage the promotion of transit media relative to other media the contractor sells. Recommended Immediate Next Steps Here is the short list of the most critical activities for the industry to pursue in the next six to nine months. 1. Conduct qualitative research with media planners to explore several issues in greater detail: • Confirm the proposed positioning • Inquire about the media planning tools, resources and information about each city’s transit media opportu- nities (for the searchable data base) they would find most useful • Explore dissatisfaction with sales representatives • Explore perceptions of high production costs • Explore media planners’ perceptions of negative adver- tiser perceptions of transit media 2. Establish the transit advertising trade association. 3. Develop and launch national advertising promoting the benefits of transit media (as expressed in the new positioning). 4. Develop a sales brochure that expresses transit advertis- ing’s new positioning and showcases transit advertising’s best usage. 5. Explore opportunities for transit’s participation in out- of-home industry events conducted for media planners and advertisers. 6. Commission multi-market research measuring the effec- tiveness of transit advertising. 7. Develop the national searchable data base of transit agen- cies’ advertising opportunities. 8. Develop the transit advertising website, populated with resources for media planners as well as for transit agencies and sales contractors. 9. Establish an industry-level project team for development of an audience measurement system. 10. Establish an industry-level work group to develop strate- gies for aligning transit agencies’ and sales contractors’ incentives to pursue new product and technology devel- opment. 11. Encourage transit agencies to generate plans with their con- tractors to improve procedures for ensuring the cleanliness of their clients’ advertising. 12. At the transit agency level, gain the explicit commitment of transit general managers, board members and other decision makers to the efforts required to drive significant increases in advertising sales. Further Research The following recommendations are for additional research. Qualitative Interviews with Media Planners A finer level of detail than the quantitative survey afforded would be useful on several topics: • Drivers of overall satisfaction with media sales representatives—From the survey was learned that lack of 69

70 selling materials and lack of demographic data are deficits, but the degree to which these drive media planners’ overall satisfaction with their sales representatives is not known. A deeper exploration of even more factors that may influence satisfaction is warranted. • Drivers of the mediocre price–value perception—The research team has hypothesized that the lack of an audi- ence measurement system is a main reason that a mediocre price–value relationship is perceived. However, there is likely to be more to it than that. The research team also rec- ommends exploring the significant minority perception that production costs are not reasonable. • Drivers of greater ease in working with transit media—It would be useful to determine what kind of information and resources media planners would find helpful and in what type of format they would like to receive it. The ideas that came from the research include a directory of which advertising sales contractor represents which transit agen- cies’ advertising. Another idea is to provide core facts on the top 10 or 20 transit advertising markets. • Validation of the proposed positioning—The recom- mended positioning was deduced from the research con- ducted, but it was not presented to media planners in its complete form for feedback. The research team recom- mends validating the benefit expressed in the positioning as being something of value as well as differentiating this value proposition versus other media. • Exploration of perceptions held by many media planners that advertisers’ perceptions of transit advertising are not positive—It would be very useful to understand exactly what is driving this perception among media planners. How much of this perception is based on recent actual experience with advertisers, and how much is based on some story the media planner heard long ago? Gathering (alleged) adver- tisers’ objections would be useful for exploring the issue with advertisers themselves. Transit Advertising Effectiveness Study As discussed in Recommendation 8 previously, in the absence of a credible audience measurement system, transit needs to conduct a multi-city study quantifying the effec- tiveness of transit advertising. The intent is that the results become part of the selling information used by transit sales representatives all over the country. This study should also explore the demographics of the transit advertising audi- ence so that the industry can improve the quality and pre- sentation of the demographic data it presents to prospective customers. Survey of Advertisers More information about advertisers’ images of transit advertising would be useful, especially in shaping commu- nications. A fairly high percentage of media planners (44%) are on the fence with respect to the statement “Clients’ perceptions of transit media are positive” and 10% dis- agreed. Our advertiser interviews were too small in number to draw any general conclusions; however, both very sup- portive and unsupportive views were expressed by those interviewed. The research team hypothesizes that advertisers’ views of transit advertising will improve measurably upon encounter- ing positive messaging about transit media. This is the impor- tance of Recommendation 2 above, to initiate a marketing campaign with both media planners and advertisers as target audiences. However, before that takes place, getting a sense of advertisers’ perceptions would be useful as a baseline from which to measure improvement over time. Should measurement of advertisers’ attitudes reveal that media planners have too negative a perception of advertisers’ perceptions, this would be a very important message for media planners to receive. Tracking Study of Media Planners over Time Once the transit media industry begins investing in its growth, it will need to track the impact of its initiatives. The media planner survey was structured so that it can be used, perhaps once every two to three years, to track improve- ment in perceptions of, usage of and attitudes about transit advertising.

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Practical Measures to Increase Transit Advertising Revenues Get This Book
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TRB’s Transit Cooperative Research Program (TCRP) Report 133: Practical Measures to Increase Transit Advertising Revenues explores strategies designed to significantly increase transit’s share of total advertising expenditures. The report examines advertising decision makers’ perceptions about current and future transit advertising products and highlights a strategic responsive communications plan designed to improve those perceptions and increase transit revenue.

An executive summary and PowerPoint presentation on this report are available online.

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