Franchising advertising space

The infrastructure owner and the commercial company that wants to advertise are brought together by a third company that franchises the advertising space. This intermediary is responsible for the maintenance of the equipment and manages the advertising itself. It is a useful tool for the infrastructure owner (interchange operator, municipality or transport company) as the costs for maintaining space at interchanges are high – all of this equipment needs to be maintained, repaired and kept clean for the passengers to use it in a convenient way. The commercial parties will pay a sufficient amount for the advertising so that the intermediary can maintain and repair the area and make some profit.

The whole infrastructure of the public transport interchange should be designed in such a way that make passengers feel safe and comfortable, in order to make sure that they will continue to use this form of transport. Passengers arrive on foot, by car or bicycle and then find their way into the area for the mode of transport they want to take. They either go directly to their bus, metro or train, or stop at one of the selling points for a coffee or newspaper. Spaces are needed where people can sit down and wait for their connection. There are also shelters for people who have to wait outside, for instance at bus stops, where they are protected from the weather. When they look around, they also can see the advertising around them. Large posters on the walls, smaller posters in the bus shelters.

All of these passengers are of great value for the commercial parties that display their brand at transport interchange hubs. Thousands of people will to see their ads, day in day out. As a result, interchanges are locations of strategic value for advertisers and the space around the waiting areas is ideal for advertising.

From an interchange manager perspective, these areas also need to be kept clean and well-maintained. Consequently, some of these waiting or transfer spaces at public transport interchanges are franchised to companies that maintain the area and manage the advertising. It is a system in which every party wins, including the passengers that use the interchange for (part of) their journey.

At the same time, local authorities and landowners need to keep a check on how much advertising is present at interchanges. Contracts should be well defined and should include clear design guidelines. Bus stops need to be adequately designed to respond to user needs, including PRM. Also, advertising should not get in the way of providing wayfinding and travel information to passengers at the interchange. Transferring between modes should remain the main purpose of an interchange and needs to be easy and convenient, While advertising may be perceived as a useful source of revenue for interchange managers and owners, the user perspective should always remain central. It is interesting to note that some station managers choose not to display advertising (such as RotterdamCentraal and Stockholm Central).

When applying the tool, particular attention should be paid to the actual costs incurred and the length of contract, as well as the land value in terms of commercial purposes and the actual effect on the local economy, bearing in mind the real cost for a company to use such advertising displays. Public authorities must use designers who have good knowledge of legal formalities.


NODES strategic objectiveContribution
Enhance accessibility and integration 0
Enhance intermodality 0
Enhance liveability +
Increase safety and security conditions +
Increase economic viability and costs efficiency +
Stimulate local economy +
Increase environmental efficiency 0
Increase energy efficiency 0

Good practice

JCDecaux is the world market leader in the field of modern, functional and user-friendly furniture design. Millions of people worldwide come in contact with their equipment on a daily basis. JCDecaux makes special and exclusive arrangements with municipalities. In return for free, user-friendly furniture and its maintenance and repair, municipalities provide the exclusive rights to use the available adverting space on and around these items.

Through this method of advertising, target audiences for advertisers can still be reached even though there may be a decrease in coverage and response through traditional ways of advertising, such as newspapers and TV commercials.

JCDecaux has a presence at busy locations where people pass by on a daily basis, such as supermarkets and public transport hubs. In this way, out-of-home commercials can be seen on a daily basis by people who usually take the same route to work day in and day out. JCDecaux not only has the staff to repair broken furniture, but also has marketing specialists who design and implement the marketing campaigns for the commercial parties.

At the NODES testing site in Toulouse, JCDecaux has the monopoly on bus shelter advertising. This involves a contract signed with the City of Toulouse. In addition, Tisséo is not entitled to place advertising on urban furniture in the city. JCDecaux provides and maintains the advertising on bus shelters .

APPLICATION IN NODES SITES: For the main interchanges in Toulouse, the tool of franchising advertising space has been applied since 1973. It applies to the entire Tisséo local transport network, whose interchanges include those of Marengo-SNCF, Arènes and Aéroport Toulouse Blagnac. These are three of the five major interchanges in the Tisséo network, two of which reach out nationally (Marengo-SNCF railway station) and internationally (Aéroport Toulouse Blagnac). The management of advertising networks (advertising boards in metro stations, on buses, bus shelters, etc.) owned by Tisséo is delegated to agents via contracts for periods of 5 to 7 years. These agents are responsible for marketing these spaces, affixing posters, maintaining the furniture, etc. They pay Tisséo a share of the revenue, as stated in the contract.

The choice of the advertising operator is based on several criteria:

  • Technical management abilities;
  • Financial proposal: rate of repayment to Tisséo and commitment to a guaranteed minimum to pay;
  • Perspectives for development of revenues: sales policy, sales teams, strategy;
  • Innovation: ability to propose innovative and successful products (e.g. digital panels in the metro to replace conventional panels, new media in and on buses, development of non-media means such as posters in metro carriages, events and promotional campaigns, etc.

These contracts have been signed: one for the metro (about 500 panels and 670 advertising faces); one for buses and trams (1,600 adverts placed on the sides and the back of buses); and one for bus shelters (about 425 advertising bus shelters and 750 advertising faces in outlying towns).

Tisséo is currently conducting a study to develop and optimise interchanges in connection with the Tisséo urban transport network (2014-2015). The purpose is to consider a global economic model for the interchange by analysing the possible activities at interchanges (advertising spaces, commercial leases, human presence, other market and non-market services and economic development). A first test application took place at the Arènes interchange in late 2014.

 

In Belgium, Clear Channel offer traditional solutions such as 1m² and 2m² advertising panels. The presence of around 100 digital 70-inch LCD screens in the 10 largest train stations in Belgium make it possible today to reach one million consumers per week, and this figure is likely to rise considerably given the growth of public transport. At Belgian railway stations, Publifer, a joint venture between the NMBS/SNCB Holding and Clear Channel Belgium, has exclusive responsibility for the advertising sites.

Clear Channel Belgium (CCB) is part of Clear Channel Internaitonal (CCI). CCI is represented by more than 650,000 traditional and digital displays in over 28 countries in Europe, the Asia-Pacific region and Latin America. These out-of-home solutions can be found on the street, in retail outlets, point of sale, airport, transit and lifestyle environments.

Clear Channel manages the advertising across rail, bus, metro, tram and ferries in the cities of Oslo and Akershus by Norwegian public transport company Sporveis-Annonsene AS. This contract, the largest single advertising contract in Norwegian history, is also one of the largest advertising contracts in the world.

Clear Channel has a contract with SL (the public transport company in Stockholm), covering all advertising inside and outside buses, metro, trams, commuter trains and stations in the capital city. It also won the bus and tram shelter tender in the Swiss capital city of Berne.

Transport for London (TfL) has partnered with media and advertising company Clear Channel UK to trial a real-time mapping tool at a Regent Street bus stop. The panel also offers local area information, including maps and walking routes to tourist attractions, theatres and shops. The panel also offers local area information including maps and walking routes to tourist attractions, theatres and shops.

Clear Channel also sells advertising on bus shelters in the West Midlands until June 2016 through a contract with Centro, the body responsible for delivering public transport in the region, which is also a NODES project partner.

 

There are other innovative ideas, too. One well-known concept is Tesco’s virtual shop in South Korea, Tesco virtual shopping walls . The launch of the Virtual Supermarket at the Seoul metro station was in July 2011. The project was implemented by Tesco Home Plus at Seolleung Station, an interchange between Line 2, the Bundang Line and a very busy station. To shop on the move, commuters just scan the product’s QR code and the purchased items are saved in the shopping basket, administered by the shopper’s own account at the virtual store. To check out, the shopper can use the T-money payment device also installed on the phone. The products will then be shipped to a chosen address. Of course, virtual stores cannot fully replace the vibrancy and personal dimension of shopping physically, yet for commuters who have to travel long hours and live a busy life, this provides a convenient option. The service adds further value to the public transport journey and creates another reason for commuters to spend time at the public transport interchange.


Potential interchange performance improvement

The franchising of advertising space helps making public transport interchanges more attractive. Since the franchising company wants to be as profitable possible, it will make sure it keeps the public areas and furniture as clean as possible. Passengers in the waiting space are not the only ones to benefit from a pleasant environment. The commercial parties involved also benefit from an attractive location for their marketing campaign, relating their product to the high-quality environment.


Resources

The two parties are brought together by a separate company that franchises the advertising space. This company is responsible for maintenance of the equipment and handling the advertising. The commercial parties pay sufficient for the advertising to ensure that the intermediary party can maintain and repair the area, as well as make a profit. This means that the cost of this tool for the interchange owner is low and involves only the man hours that are spent on setting up the construction, which is then carried out by the intermediary company.

References

JC Decaux www.jcdecaux.com

Clearchannel http://www.clearchannel.be/en