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Toronto may soon give advertisers the chance to brand subway stations, but marketers should consider more than just naming rights. The Toronto Transit Commission (TTC), which oversees one of North America’s largest transit systems, recently awarded its media selling contract to Pattison Outdoor. The 12-year deal calls for the significant expansion of advertising operations, most notably the prospect of sponsored subway lines and stations
Several cities have embraced transit as an ad platform with varying models and returns. Philadelphia’s SEPTA system (824,000 daily riders) sold naming rights for a single station to AT&T for more than $5 million in a five-year contract. Portland, Oregon’s streetcar system, which reports nearly 4 million riders annually, sells monthly sponsorships for 46 stops, bringing in just $275,000 per year for mostly subtle activations.
Bob Leroux, a vice-president at Pattison, says Toronto is at least two years away from implementing subway sponsorships (provided it passes internal and public scrutiny). But if scale is any indication of potential, consider that Toronto’s population is bigger than Philadelphia and Portland’s combined.
Pattison is already fielding queries from marketers and agencies despite the potentially lengthy assessment process that could halt the program before it starts. It will probably be worth the wait though. There are some big crowds under Toronto. The TTC reports ridership at approximately 2.5 million daily and four of its 69 subway stops see more than 120,000 rides every day. But Brent Barootes, president of Partnership Group, recommends that potential sponsors should think bigger than just “eyeballs.”
“Too many corporations don’t understand sponsorship,” says Barootes. If awareness is the only concern, then getting a logo in front of the throngs at Yonge-Bloor station suffices. But he suggests, using Marketing’s parent company Rogers Media as an example, that there’s more to be negotiated.
“What if Rogers wanted the rights at ‘their’ station to include magazine sampling? What if Flare got handed out four times a year? What about CPG brands that buy an ad package with Chatelaine? These agreements can be arranged all at once during sponsorship negotiations rather than bought piecemeal.”
Neither Barootes or Leroux would speculate on prices for such sponsorships. They would likely vary by station and scope of services on offer. Brands should also consider costs of possible repairs to some stations.
The ultimate winner in all this, however, will be the TTC. In 2010, it reported $18.9 million in ad revenues (mostly from posters, streetcar/subway wraps and digital screens). That’s mere pocket change compared to the $934.9 million that came in through fare boxes. But while the new deal won’t shift that balance drastically, it does indicate big ad ambitions: $324 million in ad revenues over 12 years, which comes out to a rough average of $27 million annually.
