A new advertising strategy is targeting one of the largest captive audiences in the world: riders of New York City public transportation. This city of some seven million people boasts the nation's largest transportation system, logging more than five million trips a day. And, according to the Metropolitan Transportation Authority (MTA), almost three-quarters of those riders now carry electronic fare cards. Ads printed on the backs of the Metrocards debuted in September 1997, promoting the likes of Sprint, the Virgin Megastore, and the Fox News Channel.
"Because of the volume of riders using the system, this is like a new medium," says Tim Kunhardt, marketing director of Instep Marketing, the sole agency on the MTA's Metrocard advertising account. Since ridership is consistent-varying by no more than 2.5 percent throughout the year-advertisers are virtually guaranteed to reach a certain number of riders during a given time period, many of whom are daily commuters. So those riders don't just see the ad once, but many times, because they keep their cards an average of four weeks, according to the MTA.
While marketers can opt to reach the entire Metrocard-carrying population, the most popular strategy so far has been to target potential customers more carefully. "It could be an ethnic, demo or a business skew," says Kunhardt. For example, when the Virgin Megastore in Manhattan's Union Square neighborhood announced its grand opening last August, the company ran ads on cards being sold only at nearby subway stations. Fox News Channel wanted to reach businesspeople, so last March it concentrated its campaign in Midtown and Wall Street stations. Sprint, the long-distance telephone company, launched a campaign on October 1 specifically designed to reach ethnic markets: cards carrying bilingual ads were sold at stations in Hispanic and Chinese neighborhoods. For advertisers, the minimum order is 100,000 cards at a cost of $29,000.
New York City transit riders comprise some of the most attractive consumer demographics in the country. Thirty-eight percent make $50,000 or more a year; 30 percent are college graduates; 39 percent fall into the 24-to-35 age group that advertisers are eager to reach; and 65 percent have full-time jobs. For companies like Sprint that want to penetrate ethnic markets, the statistics are equally compelling; 39 percent of riders are African-American; 21 percent are Latino; 5 percent are Asian.
Since its launch, Metrocard advertising has grown at a slow but steady rate, with some 16 campaigns run in 1998. Christopher Boylan, deputy executive director of communications for the MTA, estimates that 19 percent of all Metrocards now contain advertising; the card campaigns added more than $400,000 to the city coffers in 1998. It is a promising start, but still a small part of the MTA's total advertising revenues garnered from ads on subway platforms, bus shelters and elsewhere: about $25 million per year.
Outside the Apple New York isn't the first city to leverage the backs of Metrocards; the Washington Metropolitan Area Transit Authority has been selling ad space on their fare cards since 1984. But D.C.'s enthusiasm for the strategy has waxed and waned. Last year, according to Lorraine Taylor, assistant manager of sales, the program made less than $50,000. "It can be more successful," Taylor admits. In the program's best years, revenues reached $200,000. But, says Taylor, "We have limited staffing to devote to the program. It's a low priority."
Advertisers have yet to summon much enthusiasm for running similar campaigns in other cities with sizeable mass-transit systems. Chicago has the second largest public transit system in the country-1.3 million rides per day-and has offered transit cards for the past 18 months. In that time, the cards have featured only one campaign. "New York," says Kunhardt, "is a completely unique animal unto itself, given the tapestry of the people that live here and the sheer, raw size of the marketplace. In Chicago, since the ridership is so much smaller, you can't target a large enough group."
Los Angeles, which has the third largest public transit system in the country, has never run advertising on its fare cards. Nor has San Francisco, though it flirts with the notion periodically. "We've sent the idea out[for bids] in the past, but had no takers," says Janis Yuen, a spokesperson for the railway. The idea is also fairly new in Philadelphia where, in the last nine months, the program has had three paying clients.
Even in New York, many advertisers have been reluctant to jump on board. Says Kunhardt, "There's a healthy dose of skepticism throughout the advertising community as far as efficiency is concerned."
Not all marketers are intimidated, however. The New York University School of Continuing and Professional Studies ran a campaign last August on 100,000 cards that featured a Web address and a phone number. The school created another 100,000 cards for release in late 1998. "We are fairly experimental in our advertising," says Dorothy Durkin, associate dean of public affairs and student services.
In other words, the novelty of the Metrocard program turns some advertisers away, but attracts others. Last March, Virgin Records bought 100,000 cards to promote the release of a new album by the rap group Gang Starr. The cards were distributed in select neighborhoods in Brooklyn, the Bronx, and Upper Manhattan-home to many of the young consumers that make up the group's core audience. The album later went gold and has sold more than 67,000 copies in New York City alone. "We were very happy," says Michele Smith, director of marketing at Virgin Records Urban. "It was something that the world of hip-hop had never done, and it ended up causing a great stir because it was the easiest and fastest way of reaching our target audience."
Smith also believes, however, that as Metrocard advertising becomes more prevalent, it may lose some of its appeal. "If it becomes the norm, it's not special anymore."
In the long run, the ability to retain these innovative clients may prove to be the basis for the program's success. A new strategy in the works is to turn the Metrocard into a "scissors-free" value-added coupon. Daily commuters would be reminded at least twice a day that there's a coupon conveniently stored in their wallets. Even better, stores honoring the coupons would likely be located near the subway stop at which the cards were sold.