Management & Operations

Taking a Page From Transit’s Revenue Playbook

Posted on April 1, 2003 by Leslie Davis, executive editor

For the past five years, DeCamp Bus Lines in Montclair, N.J., has earned an average of $150,000 per year in additional revenue. No service was cut, no employees were fired and the company maintains a fleet of coaches that are within two years old. And the best part for DeCamp? Its revenue was increased without any out-of-pocket expense. Tapping into a revenue stream that transit agencies have been using for years, DeCamp realized the potential of bus advertising and decided to give it a go. “It provides a nice chunk of change with no cost to us,” says Gary P. Pard, vice president of operations and COO of DeCamp. “It’s a seamless way to generate revenue that may offset fuel and liability increases.” Out of its 80-vehicle fleet, DeCamp allows 50 of its commuter coaches to be fitted with “kingsize” ads. The ads, which are 12 feet long and 3 feet high, are placed on the last 12 feet of the vehicles to allow the company’s name and logo to remain visible. “It is important, more than the revenues, to keep our name visible,” Pard says. “It’s part of our promotion.” The ads are only placed on DeCamp’s commuter fleet, and not its charter fleet. “Commuters could care less what’s on the side of the bus,” Pard says. “On charters, people are specifically paying to go somewhere, and they don’t want ads.” Both sides of the buses are open for advertising, allowing DeCamp to have 100 sides available. Ads can run from as short as 90 days to as long as two years, and can bring in revenue of $4,000 to $20,000 per month. Viacom, the company that handles ad placement for DeCamp and also owns broadcasting company CBS, takes the first 15% over costs from the revenue. DeCamp and Viacom then split the remaining 85%. “The 42% we receive is 100% profit for us,” Pard says. Most advertising comes in the form of consumer products, such as movies, Broadway shows and clothing. DeCamp has restricted advertisements that promote alcohol, tobacco and sexual content. Though Pard says that advertising revenue has actually gone down in the past month and a half, it’s still quite profitable for the company. “We’re in New York, where advertising is a way of life,” he says. “In good economic times, this is a six-figure found money source with no cost.” DeCamp recommends contacting local transit agencies for their bus ad vendors if interested in trying it. Moving billboards Full bus wraps, which DeCamp doesn’t do in order to keep the integrity of its name, can bring in an average of $4,000 to $5,000 per month. That can mean up to $600,000 per year in additional revenue at no cost to an operator. “More and more operators come to us with requests for bus wraps,” says Esther Morissette, director of sales, coach division, at Turbo Images in Saint-Georges, Quebec. “It’s the fastest- growing market for outdoor advertisements. Buses are moving billboards, no doubt about it. And it’s much cheaper than advertising on highway billboards or in a magazine.” Turbo Images provides wraps to more than 1,000 operators and transit agencies in the U.S. and Canada. A full-service agency, the company designs, produces and installs the materials. In Morissette’s experience, the bus wrap provides both self-promotion for the operator and sponsored advertisements that allow operators to get a maximum return on their investment. About half of the requests Turbo Images receives are for full bus wraps. In many instances, operators do not want windows or other areas of the bus covered. That is especially true of tour operators, who want their passengers to be able to enjoy the scenery with minimal distraction. Keeping your identity For Pacific Western Transportation Ltd. in Mississauga, Ontario, bus wraps enhance its brand identity. “This program allowed us to create brand loyalty that would drive revenues up,” says Patty Pattison, director of sales and marketing at Pacific Western, which does wraps via Turbo Images. “Bus wraps are an entirely new revenue stream for our industry; however, owners should be certain that the wrap does not detract from their offering.” To that end, Pacific Western only accepts advertising that complements its services. Most of its wraps relate somehow to tourism, whether it be the promotion of the Lion King show or the Ontario Hockey League. “If your market is tourism, would a housing development wrap add value or fit with your offering?” Pattison says. “The concept of money per month is wonderful if someone out there is a good fit with your business and has the budget.” While Pacific Western does not want to lose its identity, it has no problem making sure its advertiser’s message gets across. “The customer’s name needs to get out there instead of ours,” Pattison says. “It’s our customer’s phone that needs to ring.” As a charter company, Pacific Western is most concerned with hiring out its coaches. Getting a company’s information and logo on the side of a vehicle may mean more charters from the company in the long run. Seven of Pacific Western’s 55 coaches are wrapped, and it has received nothing but positive feedback. “It gives a sense of ownership to tour operators,” Pattison says. “It makes it feel like it’s their vehicle.” Most popular are the operator’s Lion King buses, which bring the theme from the wrap to the inside of the vehicle. The interior is decorated with vines and other jungle-related items. It’s also typically the first bus people see when leaving the local airport, as the bus runs scheduled service between the airport and downtown. Pacific Western’s coaches are only partially covered in the back, and holes are built into the wrapping at window level so customers can see out. On charter coaches, no wrapping is done from the windows down. No matter the restrictions placed on wraps, it’s worth it for the operators. “Bus wraps can potentially increase revenues 30% to 40%,” Pattison says. Pricing it out The cost of a full bus wrap for advertisers averages around $7,500. That does not including the monthly rate for using the bus, which averages between $2,000 and $4,000. “The mode of operation of the vehicle wrapped and how it’s operated is crucial,” says Scott Campbell, president of Roadmark Inc. in Webster, Md. Most advertisers target where their ads are placed geographically or demographically. “As long as a defined route matches who the advertising client is trying to reach, then you can demand the advertising dollars,” he says. Roadmark acts as a liaison between advertisers and fleet operators, lining up everything from such major brands as Proctor & Gamble to local automobile dealers. “The client relies on us to execute an outdoor advertising program,” Campbell says. “We handle all the ingredients of the campaign.” Campbell says the most difficult part of any vehicle ad is assessing the statistical data. Advertisers like to know how many people will see their ad and who will see it. While the industry wrestles with the accuracy of such statistics, the most common way to judge viewership is estimating the number of people on certain types of roadways (an intercity highway probably has more people than a rural road) and multiplying that by the number of hours a day, days per year the bus is on the road. That means for an operator in Missouri, which probably runs routes in less populated areas, its buses will receive 12 million impressions per vehicle per year. A more traveled route may receive 25 million impressions. Since people are seeing the advertising while the bus is in motion, it is important to create understandable graphics and a clear message. “That plays a big role in the success of the ad,” Campbell says. “People must understand it within three seconds.” That means minimal copy and large graphics. It’s important to remember that operators should retain the final say when it comes to putting things on their buses. “They have an image to maintain,” Campbell says. “Where it makes dollars and cents is the bottom line.” One of the best ways to encourage advertisers to put their materials on your bus is to explain your mode of operation to see if it fits within their parameters. Also, in tough economic times, price does make a difference, and the monthly fee may have to be adjusted accordingly. “Make ads as economically affordable for clients and as profitable as possible for fleet operators,” Campbell says. “Also make sure the advertiser is married to the right coach operator.” Ads vs. wraps Bus advertising became popular in the early ’80s on transit buses, and expanded to motorcoaches in the early ’90s. Technology in printing and more advanced materials made the wraps more accessible. The advantage of bus wraps over framed advertising on the side of the bus is that less potential damage may occur. Wraps are produced from a pressure sensitive vinyl (similar to bumper stickers) created with adhesives that are not supposed to pull paint off the bus. For DeCamp, framed ads were often ripped off of buses if vehicles went through a narrow tunnel or around a tight corner. The frames also had to be drilled into the bus, causing permanent alterations to the body of the vehicle. With wrapped advertising, material is affixed to the bus much like scotch tape. Heat guns are used to remove the material once the advertisement has run its course. While DeCamp has had no problems with this process, other motorcoach operators have had issues with paint being removed along with the advertising. If that happens to DeCamp, its contract with Viacom says the agency will repair any damage. Another potential problem may arise if a wrapped bus is involved in an accident. Because the bus is identified with the advertiser, people may blame the company as much as the bus operator. “A crash is a black eye to advertisers because they are associated with an incident where their graphics were damaged,” Roadmark’s Campbell says. The first step Turbo Images’ Morissette says the idea of bus wraps is still blooming among motorcoach operators. Besides the obvious financial benefits, the design on the bus may help attract riders to it. “It’s a way to enhance the coach as well, especially on older coaches,” she says. To seek out advertising opportunities, start with your existing customer base. “Potential customers will not come to you, you must go to them,” Pacific Western’s Pattison says. Pattison also recommends looking for an agent, or at least someone who specializes in outdoor advertising. “Understand that you will have to pay a commission,” Pattison advises. “However, these people understand your business and can get fast results.”

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