The Metropolitan Transportation Authority (MTA) is a vital cog in New York City’s infrastructure, serving millions of commuters daily. As the country’s largest public transit network, it utilizes advertising across its extensive subway system to bolster its financial standing.
The MTA’s advertising initiatives have transformed its revenue stream, contributing significantly to its operating budget, separate from its capital projects. In 2023, it is estimated that advertising will generate approximately $175 million, aiding in the nearly $20 billion budget essential for maintaining essential services like emergency repairs and cleaning.
“It’s an important source of revenue that, mixed with our other revenue sources, allows us to operate the system and provide numerous services,” John McCarthy, the MTA’s chief of policy and external relations, stated. “It goes back into the railroads, the buses, the subways. It pays for maintenance.”
Through its partnership with OUTFRONT, the MTA has structured its advertising framework to ensure that about 70% of ad revenue returns to the agency. While fares and taxes contribute a considerable portion of the operating revenue, advertising support from companies like Brex and Seamless is crucial in covering operational costs related to labor.
Labor and labor-related expenses comprise nearly 58% of the MTA’s budget, making the funding from advertising indispensable for sustaining salaries, pensions, and healthcare benefits.
The digital age has ushered in significant changes to transit advertising. Gone are the days of static posters; the MTA has embraced digital technology that allows for quick updates to advertisements displayed in subway stations. This shift not only enhances the freshness of the ads but also eliminates the potential for outdated promotions to linger past their relevance.
“What you had for many years were hardcopy posters affixed to the wall,” McCarthy noted. “There’s an expense to the placement of those ads, but also they could go stale. You could be waiting for a train at 59th Street and there would be an ad for a movie that was no longer playing.”
Many New Yorkers might remember the enduring presence of Dr. Jonathan Zizmor, a dermatologist whose ads have permeated the subway since the 1980s. Today, however, Zizmor would likely benefit more from the modernized digital screens, able to provide timely reminders about his skin care procedures.
With over 10,000 digital screens peppered throughout the transit system, these devices not only promote products but also deliver vital real-time information to riders. The MTA introduced digital signage in 2018 and saw its implementation surge in popularity during the COVID-19 pandemic. The screens, valuable for displaying crucial health and safety information, became especially relevant when ridership dipped.
However, while digital screens elevate advertising potential, they also attract vandalism, leading to damage and graffiti that undermines their effectiveness. Although the MTA’s contract with OUTFRONT ensures the maintenance of these displays, it still has to navigate the challenges posed by criminal activity.
“We watch that very closely,” McCarthy affirmed. “And we work with the police department on tracking down anyone who’s going to cause a problem with the screens or anything else in the system.”
Despite the issues associated with vandalism, the introduction of digital displays has largely proven beneficial for the MTA’s bottom line. “Digital screens have really changed the way we advertise,” stated McCarthy. Looking forward, he expressed intent to continue optimizing these assets for increased ad revenue.
The impact of subway advertising extends beyond mere financial gain; it actively shapes consumer behavior. A recent study by OUTFRONT, conducted in collaboration with MFour, revealed that over 60% of subway riders let advertisements influence their purchasing choices, particularly within ten targeted product categories.
“With over 4 million daily trips reaching 94% of New Yorkers weekly, the MTA is the ideal canvas for impactful IRL advertising,” noted Phil Stimpson, east region executive vice president at OUTFRONT. Riders report engaging more with brands after encountering ads in the subway, often leading them to websites, social media, and retail locations.
Sentiment among riders about subway ads is mixed. Dawn Paolillo reminisced about Dr. Zizmor with amusement, mentioning her longstanding fixation on subway ads as a way to avoid eye contact with fellow commuters. On the other hand, Vittorio Bugatti from the Bronx voiced frustration, describing the digital ads as distracting when waiting for essential train information.
In a more pragmatic view, Reginald, a regular rider on the 7 train, offered support for the ads, stating, “If it helps keep the trains moving, I’m all for it.”
As the MTA continues to adapt to the evolving landscape of advertising, it remains to be seen how these efforts will balance rider satisfaction with revenue generation. With mixed reactions from the public and an ever-pressing need for funds, the subway advertisements illustrate a complex relationship between commerce and public transportation in New York City.
image source from：amny
