Astral Out-of-Home is asking Toronto council to amend its current street furniture agreement to permit digital ads on some of its nearly 2,500 ad-enabled transit shelters.
Toronto Public Works recommended that Toronto council adopt the changes at an April 10 meeting. Council will vote on the proposal at its May 7 meeting.
If the request is approved, Astral plans to convert some 30 existing transit shelters within the city’s commercial areas by this fall, said the company’s senior vice-president of real estate, Ron Hutchinson.
The number of shelters featuring digital advertising will be capped at 10% of Astral’s total transit shelter inventory – an estimated 400 units – said Hutchinson.
Astral would spend an estimated $1.65 million (approximately $55,000 per unit) to convert the 30 units, including some existing units that currently feature scrolling advertising. The new units are expected to generate an additional $1 million a year in advertising revenue, said Hutchinson.
Digital is part of what Hutchinson called a “new wave” of street-level out-of-home advertising already common in major cities like London, New York and San Francisco. “It’s something new, it’s modern and it’s what advertisers are increasingly demanding,” he said.
The proposed changes will impact only the exterior advertising faces of the transit shelters said Hutchinson, and will reduce the size of the ad units by approximately 30% – from 20.8 square feet to approximately 14.5 square feet.
The units would be powered by renewable energy sources, and will be capable of displaying up to six ads for between 8-10 seconds each. The city would receive 8.5% of the inventory to promote its own programs and services.
Hutchinson said that the conversion to digital will reduce the street furniture program’s environmental footprint by eliminating the need for work crews to transport posters from its warehouse in Vaughan and drive around the city installing them.
“There’s lots of talk in Toronto about gridlock and congestion on the streets, and what this means is that we don’t have to have crews driving around changing those posters,” said Hutchinson. “It just means that all of that goes away.”
Astral has been operating a similar 30-unit digital network on its way-finding units in Montreal since last August. “The experience there has been very positive for everyone,” said Hutchinson.
There is some opposition to the proposed changes however. Jayme Turner, CEO of the Toronto Public Space Initiative, said that bright roadside advertising is a “proven distraction” to drivers, risking traffic safety while contributing to the ongoing ad creep prevalent in major urban centres.
“The new digital ads will be more distracting and grab the attention of drivers and pedestrians,” said Turner. “This is good for Astral, but many residents find being bombarded with aggressive advertising wherever they go very frustrating.
“This is just part of a wider advertising push and ordinary people are starting to get more upset,” added Turner. “It’s not just about ruining the city’s charm and beauty – it’s also about public health and safety.”
But Hutchinson contends that by limiting street furniture advertising to only transit shelters and information pillars, the contract has significantly contributed to a decline in street-level advertising – the number of street furniture elements featuring advertising has gone from approximately 6,700 at the start of the contract to 2,552 today – while generating significant revenue for the city.
Power Problems
Toronto is currently midway through the seventh year of a 20-year contract with Astral that will see the company install an estimated 25,000 pieces of street furniture. To date, Astral has installed approximately 33% of the pieces. The program guarantees Toronto a minimum of $429 million in direct revenue from advertising rights. According to a March 21 status report from the city’s general manager of transportation services, the city has received $69.8 million in revenue from the program to date.
The transit shelter rollout hasn’t been without its problems, however. According to the March 21 report, Astral continues to have difficulties in powering some units because of a combination of work delays and Toronto Hydro’s refusal to accept a connection from the street lighting system that powers some furniture elements.
The report says that 680 transit shelters are currently without power, and notes that Astral has lost “significant major customers” because of poor illumination levels and its inability to deliver guaranteed levels of illumination for campaigns.
Astral has said that the problem is causing it to lose $2.4 million per year in advertising revenue, and the report notes that the company is “extremely concerned” about additional costs involved in connecting to other power sources.
Hutchinson said that there has been a “pretty concerted effort” by both Astral and Toronto Hydro to resolve the problem. “I think we are working towards a satisfactory resolution with Toronto Hydro and the city that will see the shelters illuminated at a much higher-level than they are now.”
The report from the city’s general manager of transportation services also noted that Astral has provided “excellent service” in street furniture maintenance, and close to 100% compliance in addressing emergency situations, safety matters and removal of ice and snow.
Astral recently commissioned Leger Marketing to conduct a public opinion study of the street furniture program, with 96% of respondents indicating that it contributes to the functionality of city streets. Eighty-four per cent of respondents said that they preferred the new transit shelters while 88% preferred the new benches. Only 60% of respondents said they liked Astral’s litterbins, however.
