The Corporation of the
TOWN OF MILTON
Report to:
Mayor G. A. Krantz and Members of Council
From:
Jennifer Reynolds, Director, Community Services
Date:
July 21, 2008
Report No.
COMS-033-08
Subject:
Milton Transit Bus Advertising Program
RECOMMENDATION:
THAT Staff Report COMS-033-08 regarding the Milton
Transit Bus Advertising Program be received for
information;
AND THAT the Milton Transit Bus Advertising Program be
implemented in-house as a one (1) year pilot;
AND THAT the User Fee By-Law be amended to reflect the
price structures identified in Schedule A.
EXECUTIVE SUMMARY
The purchase of Town-owned transit fleet has garnered further opportunity for
increased transit revenue generation through bus advertising. The Milton Transit Bus
Advertising Program is recommended by staff to be internally administered and
coordinated as a pilot project, to balance revenue generation potential with local
business interest and transit branding preservation.
REPORT
Background
Following the decision making framework of the Transit Business Plan (2006), the Town
purchased four (4) new 30ft fully accessible transit buses to replace aging Oakvilleowned fleet. The investment into transit fleet has garnered further advertising
opportunities for generating transit revenue.
Transit buses can be used as an advertising tool to riders, pedestrians, and vehicular
traffic via interior and exterior options. Types of transit bus advertising include (but are
not limited to):
The Corporation of the
TOWN OF MILTON
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Council Report No.COMS-033-08
Page No. 2
Interior Cards – Advertising on interior panels inside the bus
King Displays – Advertising on the side of bus
Tail Displays – Advertising on the rear of bus
Partial and Full Body Bus Wraps – Vinyl advertising wrapped around bus body
Transit advertising can also have the potential for local community awareness,
involvement, and recognition. Revenue generated from transit advertising helps support
further transit developments and initiatives.
Discussion
There are two (2) delivery options for the Milton Transit Bus Advertising Program:
1. In-house Programming
2. Outsource Programming
1. In-House Programming
This option focuses on keeping the entire transit bus advertising program within
current Town resources, administered within the existing corporate advertising
program. The Milton Transit Bus Advertising Program would be administered,
implemented, and maintained internally by Town staff, particularly, Coordinator,
Sponsorship and Coordinator, Transit. Advertising pricing would be determined by
staff (based on market potential and current arena advertising pricing) and would
include associated production/artwork costs, staff time, Town promotional allowance,
and any capital requirements necessary for program delivery. The Town would
receive all revenue generated.
2. Outsource Programming
Various advertising agencies have informally expressed interest in coordinating the
Bus Advertising Program on behalf of Milton Transit. This option would require a
tendering process to develop a contractual agreement between the Town and
external agency, based on terms and negotiated revenue share (similar to the type
of agreement currently in place with bus shelter advertising between the Milton
Transit and Pattison Outdoor). In this situation, the contractor would fully administer
the advertising program, including price setting. Revenue generated would be
shared (negotiable percentage) with the Town.
The following table outlines some of the advantages and disadvantages of each
advertising program delivery option, highlighting revenue potential, Town promotional
opportunities, and staff resource requirements.
The Corporation of the
TOWN OF MILTON
In House
Programming
Advantages
Disadvantages
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Outsource
Programming
Council Report No.COMS-033-08
Page No. 3
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Best opportunity for revenue
generation at this time
Follows Town direction of
single administration
coordinating corporate
advertising – ability to “one stop
shop” for corporate advertising
Increased opportunity for Town
event advertising and
promotion – pricing includes
overhead allowance for Town
advertising/promotions
Allows for local companies that
may not be able to compete
with National brands
Allows Town greater control to
showcase Milton Transit brand
by constraining media typology
Opportunity to showcase as a
pilot for one (1) year
All coordination, installation
completed by contractor
Less time required for
administration
Contract can possibly be
combined with transit shelter
advertising
Ability to source to other out-oftown advertising opportunities
(i.e. if Cogeco wants to
advertise in Milton and Oakville,
contractor can handle request
efficiently)
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Added staff time required - Coordinator
Sponsorship, Coordinator, Transit for
coordination, installation, etc
No full-time position dedicated for
transit advertising
Small revenue share dependent on
sales – due to few buses available (may
be negotiable to a degree)
Little opportunity for discounted Town
advertising/promotions
Little control over type of advertising
(i.e. bus wrapping versus bus king)
May compromise growing Milton Transit
branding (i.e. bus wrapping)
Logistics of contractor installation of
advertising complex – no garage facility
with easy accommodation
Potential for two companies to be
coordinating transit advertising, thus
contradicting the “one stop shop” for
corporate advertising
Estimated Pricing Structure and Revenue Projections
Depending on which method of program delivery is adopted, potential revenue
generation is an important determinant for assessing the type of method to implement.
The following table compares estimated in-house pricing versus expected outsource
pricing for two comparable advertising types – interior displays and bus king displays.
The Corporation of the
TOWN OF MILTON
Council Report No.COMS-033-08
Page No. 4
Annual Revenue Projections
Advertising Type
Interiors
1 interior card in one bus for 1 year
Bus Kings
1 bus king for 1 bus, 1 year
Total
Advertising Type
Interiors
1 interior card in one bus for 1 year
Bus Kings
1 bus king for 1 bus, 1 year
Total
Rate
(for 1 year)
In-house Programming
Estimate:
Revenue
Production costs,
Share
staff time, etc
Town
Revenue
500.00
285.00
100%
215.00
2,000.00
1,168.00
100%
832.00
1,047.00
Typical Rate
(for 1 year)
Outsource Programming
Typical
Total advertising
Revenue
Revenue
Share
Town
Revenue
520.00
455.00
20%
91.00
3,000.00
2,835.00
20%
567.00
658.00
In-house pricing sources were based on current arena board advertising rates as well
as market potential (Schedule A). Outsource pricing was based on estimates from a
typical advertising contractor for a market the size of Milton.
In summary, the result represents a potential increase of 37% in revenue generation
from in-house programming compared to an outsourcing program. Assuming 75% of
advertising space is sold, potential annual revenue for the Town would surpass $9,500.
Recommendation
Staff recommend that the Milton Transit Advertising Program be administered and
implemented in-house as a pilot for a one (1) year period. Keeping the program in-house
is quite common in small transit properties. It will allow staff to obtain increased revenue
potential while controlling advertising forms and maximizing the prominence and
visibility of the Milton Transit brand. It will also offer further opportunities to market
Town-related promotions/initiatives. Upon completion of the pilot, staff will review the
program to analyze progress, monitor pricing strategy, and recommend further action for
program continuation.
The Corporation of the
TOWN OF MILTON
Council Report No.COMS-033-08
Page No. 5
Additional Opportunities
• Further opportunity to promote Town initiatives/events when there is unsold space.
• The bus shelter contract with Pattison Outdoor expires in 2010. Therefore, upon
substantial transit capital and operational growth, the Town may be in a better
position to bundle the bus advertising program with the transit shelter advertising
program when opportunity comes to tender.
• As Milton Transit continues to grow, there will be more potential advertising avenues
with greater number of fleet and increased service level possibilities.
Relationship to the Strategic Plan
The development and implementation of the Milton Transit Bus Advertising Program
follows the goals and directions of the Town’s Strategic Plan:
Goal: A responsible, cost effective and accountable local government
Direction: Ensure that the cost effectiveness of service delivery is a priority when
making decisions on how services are to be delivered and by whom.
Financial Impact
There is no financial impact as all costs associated with the program are included in
advertising price structure. Revenues from this program were approved as part of the
2008 Town of Milton operating budget.
Respectfully submitted,
Jennifer Reynolds
Director, Community Services
If you have any questions on the content of this report: Tony D’Alessandro, 905-878-7252 ext
2548
Attachments:
Schedule A. Milton Transit Advertising Program Pricing Schedule
CAO Approval: _________________________
Attachment A: Milton Transit Advertising Program Pricing Schedule
Interior Bus Advertising Pricing (per unit)
3 Month Contract
# of buses
1
2*
3*
4*
SUB TOTAL
GST
TOTAL
6 Month Contract
# of buses
1
2*
3*
4*
SUB TOTAL
GST
TOTAL
9 Month Contract
# of buses
1
2*
3*
4*
SUB TOTAL
GST
TOTAL
4 buses 3 months 3 buses 3 months 2 buses 3 months 1 bus 3 months
$
133.75 $
133.75 $
133.75 $
133.75
$
120.38 $
120.38 $
120.38
$
108.34 $
108.34
$
97.50
$
459.97 $
362.46 $
254.13 $
133.75
$
23.00 $
18.12 $
12.71 $
6.69
$
482.96 $
380.59 $
266.83 $
140.44
4 buses 6 months 3 buses 6 months 2 buses 6 months 1 bus 6 months
$
256.25 $
256.25 $
256.25 $
256.25
$
230.63 $
230.63 $
230.63
$
207.56 $
207.56
$
186.81
$
881.24 $
694.44 $
486.88 $
256.25
$
44.06 $
34.72 $
24.34 $
12.81
$
925.31 $
729.16 $
511.22 $
269.06
4 buses 9 months 3 buses 9 months 2 buses 9 months 1 bus 9 months
$
384.38 $
384.38 $
384.38 $
384.38
$
345.94 $
345.94 $
345.94
$
311.35 $
311.35
$
280.21
$
1,321.88 $
1,041.67 $
730.32 $
384.38
$
66.09 $
52.08 $
36.52 $
19.22
$
1,387.98 $
1,093.75 $
766.84 $
403.60
One Year Contract
# of buses
4 buses 1 year
3 buses 1 year
2 buses 1 year
1 bus 1 year
1 $
500.00 $
500.00 $
500.00 $
500.00
2* $
450.00 $
450.00 $
450.00
3* $
405.00 $
405.00
4* $
364.50
SUB TOTAL $
1,719.50 $
1,355.00 $
950.00 $
500.00
GST $
85.98 $
67.75 $
47.50 $
25.00
TOTAL $
1,805.48 $
1,422.75 $
997.50 $
525.00
Two Year Contract
# of buses
4 buses 2 year
3 buses 2 year
2 buses 2 year
1 bus 2 year
$
500.00 $
500.00 $
500.00 $
500.00
$
450.00 $
450.00 $
450.00
$
405.00 $
405.00
$
364.50
SUB TOTAL
$
1,719.50 $
1,355.00 $
950.00 $
500.00
less 5%
$
85.98 $
67.75 $
47.50 $
25.00
SUB TOTAL
$
1,633.53 $
1,287.25 $
902.50 $
475.00
GST $
81.68 $
64.36 $
45.13 $
23.75
TOTAL $
1,715.20 $
1,351.61 $
947.63 $
498.75
1
2*
3*
4*
Three Year Contract
# of buses
1
2*
3*
4*
SUB TOTAL
less 10%
SUB TOTAL
GST
TOTAL
4 buses 3 year
3 buses 3 year
2 buses 3 year
1 bus 3 year
$
500.00 $
500.00 $
500.00 $
500.00
$
450.00 $
450.00 $
450.00
$
405.00 $
405.00
$
364.50
$
1,719.50 $
1,355.00 $
950.00 $
500.00
$
171.95 $
135.50 $
95.00 $
50.00
$
1,547.55 $
1,219.50 $
855.00 $
450.00
$
77.38 $
60.98 $
42.75 $
22.50
$
1,624.93 $
1,280.48 $
897.75 $
472.50
Bus Kings Advertising Pricing (per unit)
3 month Contract
# of buses
1
2*
3*
4*
SUB TOTAL
GST
TOTAL
6 month Contract
# of buses
1
2*
3*
4*
SUB TOTAL
GST
TOTAL
9 month Contract
# of buses
1
2*
3*
4*
SUB TOTAL
GST
TOTAL
4 buses 3 month 3 buses 3 month2 buses 3 month 1 bus 3 months
$
535.00 $
535.00 $
535.00 $
535.00
$
481.50 $
481.50 $
481.50
$
433.35 $
433.35
$
390.02
$
1,839.87 $
1,449.85 $
1,016.50 $
535.00
$
91.99 $
72.49 $
50.83 $
26.75
$
1,931.86 $
1,522.34 $
1,067.33 $
561.75
4 buses 6 month 3 buses 6 month2 buses 6 month1 bus
$
1,025.00 $
1,025.00 $
1,025.00 $
$
922.50 $
922.50 $
922.50
$
830.25 $
830.25
$
747.23
$
3,524.98 $
2,777.75 $
1,947.50 $
$
176.25 $
138.89 $
97.38 $
$
3,701.22 $
2,916.64 $
2,044.88 $
6 months
1,025.00
1,025.00
51.25
1,076.25
4 buses 9 month3 buses 9 month 2 buses 9 month 1 bus 9 months
$
1,537.50 $
1,537.50 $
1,537.50 $
1,537.50
$
1,383.75 $
1,383.75 $
1,383.75
$
1,245.38 $
1,245.38
$
1,120.84
$
5,287.46 $
4,166.63 $
2,921.25 $
1,537.50
$
264.37 $
208.33 $
146.06 $
76.88
$
5,551.84 $
4,374.96 $
3,067.31 $
1,614.38
One Year Contract
# of buses
4 buses 1 year 3 buses 1 year 2 buses 1 year 1 bus 1 year
1 $
2,000.00 $
2,000.00 $
2,000.00 $
2,000.00
2* $
1,800.00 $
1,800.00 $
1,800.00
3* $
1,620.00 $
1,620.00
4* $
1,458.00
SUB TOTAL $
6,878.00 $
5,420.00 $
3,800.00 $
2,000.00
GST $
343.90 $
271.00 $
190.00 $
100.00
TOTAL $
7,221.90 $
5,691.00 $
3,990.00 $
2,100.00
Two Year Contract
# of buses
4 buses 2 year 3 buses 2 year 2 buses 2 year 1 bus 2 year
$
2,000.00 $
2,000.00 $
2,000.00 $
2,000.00
$
1,800.00 $
1,800.00 $
1,800.00
$
1,620.00 $
1,620.00
$
1,458.00
SUB TOTAL
$
6,878.00 $
5,420.00 $
3,800.00 $
2,000.00
less 5%
$
343.90 $
271.00 $
190.00 $
100.00
SUB TOTAL
$
6,534.10 $
5,149.00 $
3,610.00 $
1,900.00
GST $
326.71 $
257.45 $
180.50 $
95.00
TOTAL $
6,860.81 $
5,406.45 $
3,790.50 $
1,995.00
1
2*
3*
4*
Three Year Contract
# of buses
1
2*
3*
4*
SUB TOTAL
less 10
SUB TOTAL
GST
TOTAL
4 buses 3 year 3 buses 3 year 2 buses 3 year 1 bus 3 year
$
2,000.00 $
2,000.00 $
2,000.00 $
2,000.00
$
1,800.00 $
1,800.00 $
1,800.00
$
1,620.00 $
1,620.00
$
1,458.00
$
6,878.00 $
5,420.00 $
3,800.00 $
2,000.00
$
687.80 $
542.00 $
380.00 $
200.00
$
6,190.20 $
4,878.00 $
3,420.00 $
1,800.00
$
309.51 $
243.90 $
171.00 $
90.00
$
6,499.71 $
5,121.90 $
3,591.00 $
1,890.00