March 7th, 2009

Why You'll Be Seeing More Ads in Public Spaces

By Robert Klara
BrandWeek

Every day, hundreds of jets lift off from Runway 33 of the George Bush Intercontinental Airport, laying trails of gray exhaust across the muggy Houston sky. The planes climb steeply toward cruising altitude, and by the time they’re over the northern suburb of Humble, everything on the ground looks pretty small. Even the huge billboards that dot the city’s metro area are difficult to see. The lone exception is the roof of Humble High School. It’s a perfect 160,000-sq.-ft. box. And if Cynthia Calvert has her way, it will soon have an ad on it.

“We’re looking for an advertiser who wants to be under all those people,” she says. “We have found a company that’ll paint it.” And what will the school get from surrendering the very roof over its head? Calvert can’t put it more plainly: “Found money,” she says.

Calvert runs a new company called Steep Creek Media, which also is looking to sell ads in the school’s parking lot, its stadium, and even at the bottom of its swimming pool. If her ideas raise eyebrows, here’s another fact to ponder: If and when Humble High finds its advertisers, it’ll hardly be unique. Across our recessionary land, cash-strapped municipalities—their coffers depleted by a dwindling tax base—are suddenly in marketing mode, chumming up with companies ready to pay for the honor of having their ad, name or logo on a high-visibility civic property.

The initiatives range from naming rights to massive vinyl ad wraps, and the examples abound: Chicago is currently taking RFPs that would allow companies to buy the right to name individual stations stops on its “L” transit line. New York’s Metropolitan Transportation Authority has already wrapped an entire subway train—inside and out—with ads, in addition to selling space on station columns, turnstiles and even the floors. Meanwhile, back up on the streets, a Brooklyn legislator has proposed selling ads on city trash cans, and the City Council may soon allow 8-foot ads to be stuck on construction scaffolding. The city of San Angelo, Texas, just gave the green light for advertising in its venerable 50-year-old coliseum. And, perhaps most controversial of all, several municipalities across the country have begun to quietly sell advertising space on the outsides of school buses.

Advocates say that, in times like these, such deals are a no-brainer. Brands get exposure in high-visibility locations that were never available to them before, and cities (most of whom are reluctant to raise taxes at a time when unemployment is already at historic highs) get a revenue stream simply by signing a few pieces of paper. “We’ve been seeing, for a number of years, a trend toward more partnerships between communities and advertisers,” observes Jeff Golimowski, the communications director at the Outdoor Advertising Association of America. “It’s an opportunity for advertisers to reach consumers in new, surprising and delightful ways, and an opportunity for communities to develop new revenues.”

Opponents, however, are somewhat less delighted. They maintain that taxpayer-supported, civic property is no place for a junk-food ad, and the proliferation of public-space messaging is, in the words of Vanessa Gruen, special projects director at New York’s Municipal Art Society, “unnecessary, visual pollution.” One thing’s certain: As the recession deepens, more cities are likely to explore these measures. If it’s true that you can’t fight city hall, you may soon be able to buy an ad on it.

Brother, can you spare a budget?
It’s no mystery why municipalities are warming to the idea of selling ad space in formerly off-limits locations like parks and civic buildings: Most of them are either flat broke or deep in the red. Last year, for example, the city of Colorado Springs fell short of revenue projections by $10 million (in case that figure sounds small, consider that the city only has 407,000 residents). This year, another gap is expected. Last month, the city announced a partnership with Active Network of California to look into getting ad and sponsorship revenue out of the city’s many properties.

“While this is certainly timely with the economy, we’ve been considering it for three or four years,” says Sue Skiffington-Blumberg, the city’s public communications manager. Though Blumberg says that the city “will not be putting signs up on everything,” plenty of ideas are on the table. For example, she says, “Naming rights for our new state park will be under consideration.” Though Blumberg maintains that it will take until the 2010 budget is in to “have a feel for the revenues,” the Denver Post reported that the city hopes to take in as much as $5 million from the effort.

In New York City, “signs up on everything” is already a status quo of sorts, which may be why the city government seems less concerned about buddying up to advertisers and making no apologies for it. In Brooklyn, city councilman David Yassky (a Democrat, by the way) recently floated the idea of selling the sides of trashcans and garbage trucks to advertisers, and is currently drafting his idea into a bill. Yassky spokesman Danny Kanner says that the legislator “made the proposal because it is a common-sense source of revenue during a time that the city should be taking full advantage of every potential revenue stream.”

A separate measure currently before the City Council would permit ads to be placed on the plywood skin of scaffolding erected around buildings under construction or renovation. For years, such signs were technically illegal, though the city usually looked the other way. The measure under consideration now would give the city a permitting fee and perhaps another slice of revenues, as well. The Municipal Art Society’s Gruen, who recently testified against the measure, says that in this economic climate, the proposal enjoys strong support. “All the council members of that committee said that this is a win-win, and why object? The city needs the money.”

Yes, the city does need the money. The subways especially need the money. “We have a budget deficit of $1.2 billion for 2009,” says Metropolitan Transit Authority deputy press secretary Aaron Donovan. “So we’re turning over every rock to identify new revenue sources, and advertising is one of them.” Numbers show just how many rocks have been overturned. In 1997, the TA’s take from underground ad sales was $38 million. By 2007, it had risen to $106 million. Last year, that figure climbed to $125 million. Brands that have signed column- and train-wrap deals include the History Channel and the Marriott-owned Eden Roc resort in Miami Beach.

The MTA has two other brand-friendly ideas on the drawing board. One is “station domination,” in which all of one stop’s available ad space is sold exclusively to a single buyer. The other is flip-book-style advertising on the tunnel walls, which subway systems in Atlanta, Montreal, and other cities have already experimented with. The optical illusion created when the train window passes a series of illustrated panels would make the ads “move.” To those who’d object to the wrapping of columns and cars, Donovan says the choice is simple: “More ads are simply a way to avoid fare increases.”

For smaller municipalities—especially ones that depend on natural beauty to draw tourists—such deals with advertisers usually come in subtler forms. For example, the city of Huntington Beach, Calif. (which has trademarked the name “Surf City” to apply to its three miles of pristine beachfront) recently reduced its budgetary burdens by inking a deal with Toyota. Signs, however, are off limits. In the arrangement, the city took delivery of 17 showroom-new 4WD vehicles that lifeguards now use to patrol Surf City’s public beach (and occasionally issue parking tickets). So what’s in it for Toyota? “Low key advertising,” says Development and Concessions manager Dave Dominguez. “Toyota’s the official vehicle of Huntington Beach; they can say that, and they have the right to use the Surf City moniker in their advertising.” Dominguez says the city wanted to avoid “littering the city with banners and logos.” He estimates that Huntington Beach saves as much as $500,000 a year—the money it would cost the city in taxpayer dollars if it had to go out and purchase the vehicles it now has donated.

Get on the bus
Perhaps nowhere is the collision between public space and private enterprise more apparent or contentious than advertising on school buses. While the South Carolina Board of Education voted to outlaw school “busvertising” in September of last year, many districts quietly allow it, including ones in Arizona, Colorado and Texas.

Cynthia Calvert started Steep Creek Media when she discovered that Texas permitted school-bus advertising but that no companies were taking advantage of it. (Besides, Calvert also owns three local newspapers, and was looking for an added revenue source of her own.) Today, her firm holds the exclusive five-year contract to sell bus ads for 20 districts. The deal is straightforward: Bus ads come in two sizes—a large panel on the rear that sells for $350 per month per bus, and a narrow strip above the windows that goes for $150. The company handles everything from the artwork to the actual installation. The district gets a 60 percent cut of gross revenue, and Steep Creek keeps the rest. “Every 45 days, we send a check [to the district],” says Calvert. “You can quickly get into several million dollars.”

Calvert asserts the school superintendent “did not receive a single negative comment” from the public about the ads, and rhetorically asks would-be objectors if doing without the ad revenue would be preferable to them. “Our district is looking at no [money for] the band, or the golf team. If that’s your choice, then ads on buses seem nice and friendly.”

Signs of danger
But civic-space advertising doesn’t seem so friendly to people like Matthew Johnson of the watchdog group Media Awareness Network, who claims that cities selling off their spaces violates an implied social contract. “In the same way that governments have a duty to protect wilderness areas, they have a duty to preserve some areas as being free of advertising,” he says.

Robert Weissman, managing director of Commercial Alert in Washington, is especially exercised about school buses and academic settings becoming venues for brand advertising. “School districts should not be complicit with the further bombardment of children with commercial messaging,” he says. “It’s contrary to the development and educational mission of schools.”

There’s also the risk that an ad will end up in a location that’s inappropriate. Calvert recently had an inquiry for a local Halloween-costume shop that wanted to buy an ad on the side of one of her school buses. She was interested until she saw the store’s logo. “I said, ‘We’re not putting a grim reaper on a school bus,’” she recalls. Scenarios like this are why most cities and school districts have a review process in place for all prospective advertisements.

Opponents also charge that these arrangements are not as simple as the win-win they’re made out to be. For one thing, the “found money” that cities get is sometimes a mere pebble tossed into the gaping maw of budget shortfalls. New York’s scaffold-ad permitting, for example, would furnish the City of New York an estimated $4-6 million for this year—hardly enough to patch a handful of potholes. “It’s nothing,” Gruen says. “The city budget is billions of dollars.” (It is, to be precise, $43.4 billion, according to the mayor’s latest estimate.)

What’s more, civic-property advertising has its share of skeletons in the closet. Back in 2003, a number of police departments signed on with a company called Government Acquisitions, which promised to supply police cruisers for just $1—in exchange for permission to place advertising on the doors. A few major brands including Wal-Mart and Johnson & Johnson said publicly that they would not get involved with police-car advertising. In the end, not a single car ended up being delivered.

Huntington Beach’s Dominguez also learned a hard lesson about entrusting a civic service to the fiscal vagaries of a private brand. Before Toyota agreed to supply his lifeguard vehicles, Chevy had done so. But when GM fiscals took a nosedive, “They said, ‘We need our vehicles back in 30 days.’ That was tough for us.” Had the city not found a replacement sponsor immediately, Dominguez says, “We’d have had to go out and buy the vehicles—and we’re looking at $30,000 apiece.”

Meanwhile, Calvert will keep looking for a brand that wants to buy the roof of the local high school. And if they don’t want a 400-foot-long space, well, she’ll sell them the side of a school bus instead. “I’ve had calls from all over the state of Texas,” she says. “Districts are hurting, and if they can make $1,000 or $100,000 [from these ads], well, hallelujah.”

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