We wrote recently about the challenges WMATA would face in selling station sponsorships. However, Metro does seem to have a lot of success selling advertisements at station screens, in rail cars and buses, and in “whole station takeovers” as regularly seen at Capitol South, where lobbyists target Hill staffers.
Metrobus Rides May Include Audio Commercials
According to the Washington Post, Metrobus riders could encounter a new form of advertisement soon: audio messages broadcast over the speakers used for “Stop Requested” and other announcements:
“With Metro needing to make more money, the agency has begun playing ads on buses. The 15-second Megabus ad is the only one to air since the program’s Nov. 1 soft launch. But more advertisers are expected to follow.”
WMATA Metrorail Riders Might Also Get New Audio Advertisements
WMATA contracts with OUTFRONT Media for the existing digital and analog display ads, but the transit agency has contracted with a different firm for the audio adverts. If Metro chooses to, the aural commercials will make their way to Metrorail as well. From The Post:
“Eventually, Metro rail riders could hear ads too, said Russ Gottesman, founder of CommuterAds, the Dayton, Ohio-based company that has contracted with Metro to provide the ads.”
Audio Ads Guarantee $250 Thousand Per Year for Metro
“Metro says the contract guarantees the cash-strapped agency will get at least $250,000 a year in ad revenue, and Gottesman says new technology that plays ads based on the location of a bus will provide ads that riders will actually want to hear, such as ads for deals at nearby stores. ... The Megabus ad is being played on nearly all Metro buses at 7:18 a.m. and 5:18 p.m. each day, regardless of where the buses are. But the company is also using CommuterAds’ geolocation software, which Gottesman said allows advertisers to strategically target ‘a captive audience.’”
Audio Ads Unlikely to Help Metro Given Their Budget Situation
Whether it’s easy or difficult to sell these ads, $250 thousand is a *tiny* amount of money regarding the tens of millions of dollars WMATA needs to expand service as GM Wiedefeld hopes. $250K is one percent of the up to $30 million shortfall in Metro’s proposed budget. That’s after rounding up to the nearest percentage.
The minor budget impact of these ads raises the question: does the cost of contracting out and standing up these audio messages benefit Metro’s budget situation? There are benefits to contracting services like ad sales out. But, there are also costs of collaborating with an outside consultant. If CommuterAds doesn’t generate many times more ad revenue than they guarantee, is the contract a net benefit to Metro given the outside firm’s fees and the internal costs of staff time?
Let’s say Metro’s audio ad inventory generates $1 million net to Metro. Four times the guarantee sounds like a raving success. But, is that better than alternative strategies that could’ve been pursued by the staff time given up to this effort? Is it more beneficial to Metro, given the massive deficit between their funding and what they want to do with service increases, to spend time on larger dollar efforts like capital raising or alternative funding streams that number in the millions or tens of millions of dollars?
As we’ve written before, the “small ball approach” or “pocket change approach” to closing Metro’s budget gap seems at once the least politically controversial, but also the least effective at actually fixing the problem.
Let’s see how practical this approach has been for Cleveland: “[the agency’s marketing director] describes the Cleveland transit agency’s take from the ads as ‘a hair-thin line on a revenue pie chart.’” I see. “But Metro spokesman Dan Stessel said every bit helps.” Sure.
New Advertising Technology Makes Your Smartphone a Frenemy
As mentioned above and here from the same WaPost article, location data from smartphones, buses, and rail cars may make this advertising more valuable and thus help Metro’s budget more. But, the audacity with which ads drop into commuters’ lives may face a backlash:
“As advertisers decide they want to reach riders at other locations, other routes will get ads. Next year, CommuterAds plans to let businesses go online and schedule ads to play on buses as they pass by their stores.”
“The idea is similar to how advertisers are increasingly sending advertising to cellphones based on where your phone’s GPS says you are, said Donna L. Hoffman, a George Washington University marketing professor and co-director of its Center for the Connected Consumer, which studies how consumers interact with smart devices connected to the internet. Brick-and-mortar stores trying to compete with online retailers like Amazon, for example, are sending ads reminding targeted consumers who’ve opted in that they happen to be near one of their stores and what the day’s deals are. Even when they’re inside the stores, customers will get ads — including aisle by aisle — pointing out things they might want to grab, she said.”
“But as NPR reported in May, that has led to excesses. Personal injury lawyers are even using the technology to send ads to people waiting in Philadelphia emergency rooms.”
Getting a push notification from Harris Teeter every time I pass the Kraft salad dressings sounds like a nightmare. Though, speaking as a former political campaign staffer, the ad targeting potential of demographic groups sounds interesting:
“In largely Somali neighborhoods of Champaign, Ill., buses play ads in Somali for the University of Illinois-Champaign, which wants to reach out to people in the ethnic group.”