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System Advertising Metro System Advertising ______________________________________________________________________________ Summary of Policy advertising based upon its guidelines for The agency’s System Advertising Policy is acceptable advertising content contained intended to define the use of revenue in this policy statement. generating advertising space and It was further determined that advertising informational advertising space on our own properties is a valuable means throughout the transit system. It was of communicating with our customers, determined that allowing revenue- explaining and promoting our transit generating advertising, which does not services through the dissemination of compromise public or employee safety, to information onboard bus and rail systems. be placed in designated areas on its transit Informational advertising space is limited, properties is a responsible means of and reserved exclusively for agency transit maximizing the use of capital information. All messages and materials investments. distributed by this means are prepared, The agency may enter into contracts with approved and/or authorized by the Chief outside vendors to sell and display Communications Officer (or designee). advertising on buses, trains, and transit On June 22, 2006, the Board approved the facilities for the sole purpose of generating amendment to policy on Metro System revenue. Issuance of such contracts must Advertising (COM 6) to permit non- be in accordance with procurement traditional advertising displays and policies and approved by the Board of advertising on rail car exteriors. Directors. Locations for revenue- generating advertising may include but are Historical Perspective not limited to: interiors and exteriors of The agency and its predecessor agencies, bus and rail vehicles, interiors of rail both public and private, have generated stations, and fixed outdoor displays on revenue for nearly a century through the agency property. Wrapped advertising on sale of advertising on the transit fleet. The buses is limited to no more than 30% of a agency and its predecessors have also bus’s total window surface and no more placed in-house advertising to promote than 50% of the window surface of any transit related objectives in a variety of bus side. No windows may be covered on forms and locations throughout the transit rail cars. No wrapped advertising, bus system. backs or oversized king ads are permitted on Metro Rapid vehicles or on any Staff drafted a comprehensive policy to articulated buses. formalize advertising practices and increase the efficiency of procedures Content restrictions include the related to them. The policy acknowledges prohibition of alcohol and tobacco the permissibility of generating revenue advertising, non-commercial advertising, from advertising; sets guidelines for the and any advertising promoting or relating acceptability of advertising content and to illegal activity and/or containing clarifies the use of advertising space for obscenity or profanity. Other restrictions agency transit services. include images or concepts that denigrate a specific ethnic or gender group, public In March 2000, the Board adopted a transportation or are sexually explicit in comprehensive advertising policy that nature. provided specific guidelines regarding Metro reserves the right to reject any revenue-generating advertising on agency vehicles. While the policy permitted Metro System Advertising ______________________________________________________________________________ advertising on most agency vehicles, it specifically prohibited the placement of exterior advertising on “rail vehicles, BRT vehicles, Rapid vehicles, and other new types of transit service.” Under the current advertising contract, the payment amount is tied to a benchmark of 1,700 buses used in peak-hour service that accept advertising. Should there an increase of 200 buses over the contract benchmark that accept advertising during peak-hour operations, monthly revenues would increase 10% commencing the following month. Similarly, should there be a net decrease of 200 buses during peak-hour service, monthly revenues would decrease by 10% starting the following month. On January 27, 2005, the Board approved the amendment to policy GEN-34 to permit revenue-generating advertising to be posted on the exteriors of Bus Rapid Transit vehicles. Last Board Action June 22, 2006 – Metro System Advertising The Board approved amending the Board- approved policy on Metro System Advertising (COM 6) to permit non- traditional advertising displays and advertising on rail car exteriors. Attachment Administration – Metro System Advertising: Revenue-Generating & Informational ATTACHMENT A New Revenue-Generatig Advertsing - Options with Known Revenue Potential A-1) Station Prominence - Using adhesive vinyL, a single advertiser decorates large sections of available wall space in a rail station. The effect gives the message prominence when viewed by customers accessing the station. Such displays are tyically posted for one month. Metro has at least six subway stations that would make attractive candidates for advertisers interested in a Station Prominence display. Transit systems in New York, Chicago and San Francisco are among those currently permitting this tye of advertising. CBS Outdoor has proposed testing the demand for Station Prominence displays on a revenue-sharing basis at Union Station, 7th Street/Metro Center, Hollywood/Vine and Hollywood/Highland, Universal City and Nort Hollywood, with 60% of revenue going to Metro. Based on a conservative estimate of having these displays posted just six months out of the year at each station, Metro would net in excess of $1,000,000 in the first year. If demand proves to be greater, revenues would increase. If approved, Metro wil pursue an immediate sole-source arrangement with CBS Outdoor to test Station Prominence advertising from JulY 2006 to December 2007. If viable, a longer- term option wil be included in the next competitive advertising procurement, scheduled to be awarded in June 2007 with an effective date ofJanuary 1, 2008. A-2) Exterior Train Advertsin - Using adhesive vinyl, ads are placed on the exteriors oflight rail trains in standard poster sizes, on entire doors, or as "wraps" of complete rail cars. Because of their visibilty from freeways, the Metro Green Line and Metro Gold Line are both attractive candidates for advertisers interested in exterior train advertising. Transit systems in Portand, Las Vegas, Chicago, Washington DC and Minneapolis are among those currently permitting this tye of advertising. CBS Outdoor has proposed testing the demand for exterior train ads on the Green and Gold Lines on a revenue-sharing basis, with 60% of revenue going to Metro. Based on a conservative estimate of having these displays posted on only 70% of the available space, Metro would net in excess of $1,000,000 in the first year. If demand proves to be greater, revenues would increase. If approved, Metro wil pursue an immediate sole-source arrangement with CBS Outdoor to test Exterior Train advertising from JulY 2006 to December 2007. Ifviable, a longer-term option wil be included in the next competitive advertising procurement, scheduled to be awarded in June 2007 with an effective date ofJanuary 1,2008. New Revenue Opportunities Page 5 A-3) Metro Orange Lie Advertsing - The current policy prohibits the display of ads on the exteriors of Metro Orange Line vehicles. As a number of national advertisers have inquired specifically about this line, it is likely that exterior advertising on the Metro Orange Line could be sold at a premium rate. CBS Outdoor has expressed interest in testing this demand and has proposed paying Metro a flat fee of$150,000 per year to sell and post standard exterior advertising (sides and tails, maximum of 3 ads per vehicle) on the 30 Orange Line vehicles. If approved, Metro wil pursue an immediate sole-source arrangement for the above with CBS Outdoor to take effect from JulY 2006 to December 2007. If viable, a longer-term option wil be included in the next competitive advertising procurement, scheduled to be awarded in June 2007 with an effective date of January 1, 2008. A-4) Tunel Advertsing - Through specialized displays, subway passengers are able to see a 15-second advertisement through the window between stations in what appears to be a motion picture on the tunnel walL. Metro has several locations, which would make attractive candidates for tunnel ads, including tunnels between the Hollywood/Highland and Universal City stations, and between Union Station and Civic Center. Transit systems in Atlanta, San Francisco and New York are among those currently permitting Tunnel Advertising. Two vendors, SideTrack Technologies and SubMedia, have expressed interest in testing the demand for this tye of advertising on the Metro Rail system. The vendors would bear all costs for fabrication, installation and maintenance. Based on leasing sites for two installations to each of these vendors on a one-year test basis, Metro could net an estimated $240,000. If demand proves to be substantial, a revenue sharing arrangement could be developed for the future. If approved, Metro wil pursue immediate sole-source arrangements with both vendors to test their systems for a period of 12 to 18 months. If the systems are found to be viable, a separate competitive procurement wil be launched to install/expand the systems over a longer term. A-5) Parkig Strpe Advertsing - In this program, adhesive strips are placed
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