NYC Outdoor Market Gets More Competitive

Van Wagner, Titan Each Win MTA Contracts

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NEW YORK (AdAge.com) -- The New York City public transportation system is about to get a lot more congested, and not because of human traffic. Two new Metropolitan Transportation Authority contracts for 2007 signed this week have made the country's most pivotal outdoor market even more competitive, with Van Wagner and relative newcomer Titan Worldwide making significant dents in the space.
Van Wagner won a contract to service phone kiosks and billboards, while Titan will handle bus advertising.
Van Wagner won a contract to service phone kiosks and billboards, while Titan will handle bus advertising.

"The New York market has become increasingly crowded over the last 10 years or so," said Jodi Senese, exec VP-marketing for CBS Outdoor, a company that has lost its largest contract renewals with the city to competitors in recent years. "There's an absolute proliferation of phone kiosks and more wild posting than any other city."

On the comeback trail
Van Wagner, for one, is on the comeback trail following yesterday's announcement that it had won the license to manage the MTA's outdoor billboard advertising on all NYC Transit Authority properties. Since Van Wagner lost the bid for Manhattan's street furniture contract last year to Cemusa, the deal was especially crucial for a company that has made its mark in billboards. The privately-held outdoor-advertising company will operate 300 large-format billboards across the city, nearly doubling its current inventory, in addition to its highly visible public-telephone-kiosk panels. Van Wagner now has 9,000 advertising panels in Manhattan.

President-CEO Richard Schaps said the company had the opportunity to bid on all MTA properties but instead chose to focus on billboards. "It's difficult to grow in the out-of-home media business, but we have done a great job in the climate," he said. "Our competitors have bought these assets from others, but we build, and they buy."

Bus advertising
Titan Worldwide, meanwhile, will takeover bus advertising on 6,000 vehicles across all five boroughs. The contract win is a territorial reclaiming of sorts for CEO Don Allman, who held the bus contract in the late 1980s with Titan Chairman Bill Apfelbaum under the now-defunct Transportation Displays.

Mr. Allman said the 10-year deal will offer plenty of room for innovation. "We are into doing things everyone else is doing in addition to bringing new products to the market," he said. Titan's simultaneous win of Minneapolis' transit system this week only adds to its national growth.

These deals, coupled with Cemusa's impending street-furniture takeover and Clear Channel's outstanding stake in Times Square, have made New York City much harder to monopolize since Viacom -- now known as CBS -- dominated in the late '90s. "It used to be you could sit down with CBS in the old days and go with your entire budget," said John Connolly, president of Mediacom Outdoor. "You could buy bulletins, phone kiosks, the subways. You could literally buy New York City in a one-stop shop. This is absolutely, positively not possible now."

Key platforms
CBS still has enough visible properties scattered across key platforms -- LCD screens in subways, fully-wrapped shuttles -- for Ms. Senese to consider its stake to be the "crown jewel" in New York out-of-home products. "Clearly we have the most creative palette for experiential engagement, digital, etc.," she said, citing other contracts in Washington, Chicago and Atlanta. "We're still a dominant player in the transit space in New York City -- all major outdoor properties, buses, shelters and subways. We feel, with the combination of underground subways, we have the best offerings for any advertiser."

The same inventory is still available to New York buyers, just with different ownership, Mr. Connolly said. Having a broader palette to choose from keeps prices competitive and guarantees higher with renewed contracts. "We don't have a problem with increases as long as [the company] can prove they can deliver a higher value that's more than the typical cost of living," Mr. Connolly said.
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