Tapping into Transit San Diego MTS Naming Rights California Transit Association November 18, 2015
The Dark Days of 2009 – State took our money – We were all scrambling to reduce costs • Employee layoffs – MTS reduced management positions by 20% • Reduced employee benefits • Fare increases – From $64/mo to $72/mo in 2 yrs. – Service reductions – Rethink non-fare revenue strategies
Diverse non-fare revenue sources – Railroad Right of Way -- $1 million – Real Estate -- $1.9 million – Advertising -- $2 million – Station Activations -- $250,000 – Concessions/Vending -- $500,000 – MTS-TV -- TBD
Bus Advertising Policy
The Naming Rights Deal – RFP for a firm with Naming Rights expertise – Superlative Group • Did the Health Line in Cleveland plus sports • Teamed up with IMG – The Superlative process • Asset Evaluation • Letters of Interest vs. RFP • Negotiations • CEO/Board member participation in meetings
Monetizing Assets Rapid Network Trolley Map
Mid-Coast Extension • 11.5 miles • 20,000+ new riders • UC S an Diego – 60,000 students, faculty and staff • Maj or Employment • Dense Residential • One-seat ride from border • Direct link to downtown and Trolley network
Based on 324 million impressions per year, what would an advertiser expect to pay? Based on 81,000,000 impressions in each medium Media CPM Cost Radio $12.92 $1,000,000 TV $12.03 $1,000,000 Billboard $ 2.56 $ 200,000 Print (UT) $10.28 $ 800,000 Total $3,000,000
Considerations – That’s a lot of money! • MTS wanted at least $1 million per year – It’s a big commitment for agency • Reprinting signs at stations • Reprinting timetables and other collateral • Meeting with local planning groups – Big commitment for Naming Rights Partner • MTS wanted a long-term commitment of at least 10 years
Creating Impressions Trolley Wraps (6) Station Names (3) Freeway/Street Bridges (3) Station Activations (6) Station Signage • Destination • Line Designation • Route Maps • S ystem Maps On-Board Signage • Route Maps • S ystem Maps Printed/Web/Digital • Timetable • Pocket Guide • One-way Tickets • WiFi and Digital Ads
$36 Million Contract – 30 years – $675,000/year until Mid-Coast is complete – $945,000/year upon completion – Increases with CPI • Uses historical average of 3% – Value increases to $1.85 million/year by end of contract
Who We Are – UC S an Diego Health 7500+ 850+ 563-bed Employees Physicians Health System Two Campuses: $1.7+ Billion La Jolla and Hillcrest Operating Budget 15
trategy Business Drivers for Partnership S 2011-2015 One of the most competitive health care markets in the U.S. Some of the most expensive advertising rates in the U.S. Two well established competitors with mature positioning and high level of brand awareness
Partnership 1 – North County Transit District
Partnership 2 – UC S an Diego Campus Buses
S ummary County discharges peaked in 2011 and have trended down 3.0% through 2014 while we grew 6.5% from 2011 to 2014 Market share grew from 9.2% to 10.1% over the same period Transportation partnerships are undervalued marketing assets Accurate valuations of transportation assets allow them to be competitive with traditional advertising
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