City explores ads on buses

Revenue projections, however, aren't that exciting
Wednesday, October 8, 2008 | 4:46 p.m. CDT; updated 6:09 p.m. CDT, Wednesday, October 8, 2008

COLUMBIA — Columbia Transit is scoping out ways to raise money to soften the effects of high fuel prices that have punctured pocketbooks. One idea provides local businesses with an additional vehicle of promotion.

The city is revisiting the possibility of allowing businesses to turn buses into billboards by buying ads that would be placed on the sides of buses. But whether the potential income is enough to justify the program remains to be seen.

“We have goals to augment the bus system in town, and we’ve come up to the ceiling on a lot of the funding sources,” First Ward Councilman Paul Sturtz said.

“We’re coming up with some creative ideas for squeezing blood from stone.”

The city would like to find the money to expand bus routes, have buses run more frequently and avoid having to increase fares again and to subsidize low-income passengers, said Jill Stedem, a spokeswoman for the Columbia Public Works Department. That department oversees Columbia Transit.

But the bus system, which has a $5 million budget for fiscal 2009, already is financially strapped.

“We were $100,000 over budget in fuel costs alone for 2008,” Stedem said.

The subject of advertising on buses came up at the Sept. 15 City Council meeting in a report to the City Council, whose members decided to address the issue in more detail at a work session later this month. Stedem doesn’t expect any specific proposal to make it to the council’s official meeting agenda until at least early 2009.

The idea isn’t entirely new. The council in 2004 and 2007 discussed advertising on buses but didn’t move forward.

The program suggested in a 2007 report called for hiring a contracted advertising agency to run the program and to affix frames to the sides and backs of buses that would hold billboard-style ads. Although hiring an ad agency would have required the city to split the revenue, it also would have saved the expense of hiring workers and administering the program in house. At the time, the estimated cost of installing frames on the city’s bus fleet was $20,988.

The 2007 report estimated revenue from ads on each bus would fall between $1,000 and $1,600 per year. Calculated for 25 buses, that would add up to between $25,000 and $40,000 per year. Columbia Transit now operates 26 full-size buses.

Sturtz is unimpressed by the revenue projections.

“The effect would be pretty minimal. We’re not talking much money,” he said.
That said, officials with Lincoln Star Transit of Lincoln, Neb., and the Waterloo Transit Authority of Waterloo, Iowa, are pleased with their bus advertising programs.

Both cities hired the Minnesota-based Houck Transit Advertising, which services more than 20 transit systems in the Midwest — including some in Missouri — and gives its clients half the gross advertising revenue.

Lincoln Star Transit operates a fleet of 60 full-size buses and nine smaller buses for people with disabilities. It just finished its first year with Houck and collected $95,000.

Lincoln Star Transit Manager Larry Worth said the arrangement with Houck is easy.

"I just get a check. It's all profit to us," Worth said.

Waterloo Transit Authority operates 43 buses and projects earnings of $18,000 for the year. Both systems place advertisements on buses using both a frame medium and a wrap medium, in which vehicles are covered in plastic with ads printed on it.

Columbia officials explored the wrap medium when preparing the 2004 report on the potential for bus ads. It estimated that method could earn the city $4,500 per vehicle per year. With 26 buses today, that would amount to $117,000 per year.

In addition to increasing cash flow, creating a formal advertising program for the buses also would address the complaints of business owners who say it is unfair that some buses that stop at large retailers include the names of those retailers on their marquees. They should list the names of streets and intersections instead, the complainants say.

Sixth Ward Councilwoman Barbara Hoppe said some business owners downtown have complained that it is inappropriate for larger businesses to have free advertising without the city extending that advantage to smaller businesses.

“They felt that we were subsidizing large corporations, mainly Wal-Mart and Hy-Vee,” Hoppe said. “If they’re getting free advertising, they need to be paying the city for that.”

Though much remains to explore about the potential for a bus-advertising program, Hoppe said it’s a serious matter.

“I think it’s just more urgent and timely that we improve our mass transit system as a service to the people,” Hoppe said. “The time has come to move on it.”

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