Ad Campaign Generates Profit: MTA's Advertising Push Yields Significant Revenue for New York City's Transit System and Ensures Smooth Rides for Commuters
In the heart of New York City, the Metropolitan Transportation Authority (MTA) has transformed its transit system with the introduction of over 10,000 digital screens, providing a valuable canvas for impactful in-real-life advertising. These screens, strategically placed throughout the system, reach an impressive 94% of New Yorkers weekly, making them an effective tool for advertising.
During the COVID-19 pandemic, these digital screens took on an additional role, displaying crucial safety information to help keep riders informed and safe. However, they are not without challenges. Vandalism, ranging from being kicked in, scratched, or covered in graffiti, is a common issue, with the MTA closely monitoring such incidents and collaborating with the police department to track down perpetrators. The MTA's contract with OUTFRONT ensures that vandalized screens get fixed promptly.
The revenue generated from these advertising partnerships plays a significant role in supporting the MTA's operating costs. In 2021, the MTA expects to bring in about $175 million in ad revenue, contributing to its nearly $20 billion operating budget. While this represents less than 1% of the total operating budget, it is a crucial source of income, specifically around 0.875% of the budget based on these figures.
The immersive environment of the subway ads has been found engaging and trustworthy by riders, prompting them to act by visiting brand websites, searching online, visiting retail locations, or engaging on social media. In fact, over 60% of subway riders claim that ads on the subway impact their purchasing decisions in 10 growth product categories.
Digital technology has revolutionised subway ads, with static posters being replaced by dynamic, updatable digital screens. This transformation has led to significant growth in revenue for the MTA. Approximately 70% of ad dollars go back to the MTA, helping fund emergency repairs, maintenance, and cleaning.
Despite the benefits, not all New Yorkers are fans of transit ads, with some finding them annoying, especially when seeking information about train schedules. However, the MTA continues to strive for a balance, ensuring that important information is still easily accessible to riders while maintaining a valuable revenue stream.
The MTA's digital signage was launched in 2018 and saw significant growth in 2020, demonstrating the potential for further expansion and innovation in the future. As the city continues to evolve, so too will the MTA's advertising landscape, providing opportunities for both advertisers and riders alike.
- In addition to promoting lifestyle, sports, entertainment, general-news, and technology products, digital screens in New York City's subway system have been instrumental in broadcasting crucial safety information during the COVID-19 pandemic.
- The revenue generated from advertising partnerships, accounting for about 0.875% of the MTA's nearly $20 billion operating budget in 2021, contributes significantly towards financing emergency repairs, maintenance, and cleaning in the transit system.
- As the MTA's digital signage network continues to grow and innovate, it provides opportunities for advertisers to reach over 94% of New Yorkers weekly, while offering engaging, dynamic, and trustworthy advertising content that influences purchasing decisions in various categories, including growth products.
