Video Ads on Public Trains Could Be Sign of Financial Times

One of the largest public transit agencies in the nation — California’s Bay Area Rapid Transit (BART) — considered a handful of money-making moves this week that would allow ads in, on and around its trains, some of which could be delivered through a video network.

If approved, BART would join a few other big-city transportation authorities that are generating much-needed revenue by leveraging technology to deliver advertising to riders of public transit.

Though the San Francisco Bay Area transit service ended the 2010 fiscal year with a $4 million surplus — making it one of a few transit agencies nationwide not facing a deficit — officials said new revenue sources are needed in anticipation of future budget pressures. BART has projected a $7.5 billion deficit over the next 30 years, according to a news release.

During a Thursday, Sept. 23, meeting of the BART board of directors, marketing and research staff presented five revenue-generating proposals, some of which integrate technology such as video screens and networks. No decision has been made on whether to accept or reject the ideas, which include:
 

• an in-station video network (no audio) featuring advertising, news, weather, financial updates and train arrival times;
• an on-train video network (no audio) with news and advertising;
• selling station co-naming rights to allow a company to attach its name to a station name;
• selling advertisements on the trains’ exteriors, including full train “wraps,” ads on train doors or banners below train windows; and
• leasing sections of BART rights-of-way to advertisers, who would build digital billboards.
   

BART Board President James Fang, who requested that staff research the options for expanded advertising, said it’s imperative to generate funds to support the continuous upkeep of public-use facilities, like elevators and restrooms, and to avoid layoffs. The options were met with mixed opinions by the BART board; some members said that the revenues generated would be contingent on market demand, advertisement quality and the companies’ ability to deliver. While no decisions were made, staff was directed to further study the proposals.

Some officials aren’t in favor. BART Director Tom Radulovich said such moves would erode the “dignity” of the rider and experience, leading to a “sensory assault” by means of plastic-wrapped trains and other aesthetic changes.

“Let’s dignify the ride, improve the quality and polish the BART brand before putting advertising first,” he said.

Some of the nation’s largest transit agencies have already taken advantage of selling advertisement space to supplement their coffers. New York’s Metropolitan Transportation Authority (MTA) just introduced subway wraps (inside and outside) promoting TBS’ coverage of the Major League Baseball’s 2010 postseason. There are also video screens inside the subway cars that show replays of Major League Baseball highlights. The video screens inside the subway cars show replays of the previous night’s baseball highlights.

“The MTA earns more than $100 million per year from sales of advertising space, mostly through traditional print media, but this traditional advertising has suffered as a result of the recession,” MTA Chairman and CEO Jay H. Walder said in a press release. “Our uncertain finances mean that we have to think creatively to maximize the value of our physical assets.”

BART already contracts with a vendor — Titan Advertising — which manages the system’s train and station posters. Those ads brought in more than $6 million in revenue to BART in 2009, but the agency wants to make money now instead of when the next economic crisis hits, Fang said.

Because BART is already in an advertisement contract with Titan, the advertising agency gets the right to bid first on station monitors, which BART staff expects to occur. Until such a proposal comes through, BART has no estimate on how much money station monitors could garner.