Transforming your ad sales process just got a lot easier. Learn how to extract more value for existing technology and ultimately drive revenue, ratings and retention in Slack's new ebook.
Buying ads on the New York City subway is moving into the digital age.
In recent years, ads on the Metropolitan Transportation Authority’s trains and platforms have helped grow digitally native startups, firms like Casper and Hims, into household names.
But despite being a place for buzzy brands to advertise, the process of buying ads on the MTA has remained low-tech, with inventory only available via directly sold insertion orders.
Last December, Outfront Media—the digital out-of-home advertising company that contracts with the MTA to sell ads—began offering some subway inventory programmatically, meaning advertisers could buy ad space via a demand-side platform. The MTA is first publicizing these efforts now, Adweek can exclusively report.
For the MTA, programmatic doesn’t mean real-time bidding or identity-based targeting. Buyers can bid within the MTA’s available inventory, which, for now, includes the digital screens above subway entrances and exits, though that is expanding to screens in subway stations and Long Island Rail Road and Metro North platforms, according to Neil Shapiro, vp of programmatic at Outfront.
Advertisers can target by several variables including time of day, day of the week and location. Post-campaign reporting includes impression delivery, spend and timing of ad plays.
“Transit advertising is so effective because of its ability to reach consumers as they go about their daily journey, reaching them multiple times a day,” Shapiro said. “When coupled with the flexibility, speed to market, audience targeting, measurement and the ability to see campaign-wide reporting in one platform provided by programmatic, it’s a powerful combination.”
The large majority of campaigns are still direct buys, though programmatic is growing, Shapiro said. The goal of the MTA and Outfront is to attract new brands that might not have previously considered advertising with the MTA.
Those efforts are paying off: 78% of advertisers who bought ads programmatically are new to the MTA, according to Victoria Mottesheard, vp of marketing for the New York/East region at Outfront Media.
New revenue streams are important for the MTA, which has long faced financial struggles, particularly as ridership sagged during the pandemic. Last month, New York Gov. Kathy Hochul passed a budget bill that helped the MTA allay a nearly $3 billion deficit.
Meanwhile, digital out-of-home has rebounded steadily since dipping during the pandemic. U.S. investment in the sector is anticipated to reach $2.94 billion in 2023, according to Statista.
The efficiencies of programmatic
While bidding programmatically on subway panels doesn’t necessarily open up buyers to more inventory or a more targeted audience, it can put an ad buyer’s budget to work more efficiently.
“[If a brand campaign] has $15,000 for one week on digital screens, it’s going to be a lot more tricky to do manually,” said Brian Rappaport, CEO of out-of-home agency Quan Media Group, which has worked with Casper, Skims and Away. “[With programmatic], they’re going to help make those dollars work as hard as they possibly can.”
Plus, programmatic provides more flexibility than upfront deals for brands new to transit advertising, Rappaport said.
“A lot of brands are a lot more reactionary and don’t want as many restrictions having to cancel things,” he said.
Programmatic makes it easier for brands to purchase inventory, as they can see all their digital media buys in one spot, said Geoff Litwer, vp of programmatic and display media at Tinuiti.
“We look at that as a major enhancement or upgrade to make [the MTA] available programmatically,” Litwer said. “It’s the workflow automation. It’s the unification of reporting.”
Buying programmatically can be more expensive because of the introduction of tech fees.
When to go direct
Despite the potential value gained from buying programmatically, some of the most popular kinds of transit advertising are when a brand takes over an entire subway station, Rappaport said, a kind of inventory that wouldn’t make sense to buy programmatically.
“Generally, we’re big fans of outdoor advertising. It’s been having a resurgence, or a moment. A lot of it is predicated on the fragmentation of media and the opportunity to create a tangible presence in a real-world moment,” said Eric Perko, CEO of media agency Apollo Partners. “Programmatic is not totally in line with that because you’re buying it fractionally.”
Perko said that while programmatic might be useful for a new advertiser to experiment with transit, he can’t see it completely replacing direct.
“It makes a lot of sense as a complement to a bigger buy,” Perko said. “When given the option, and assuming the brand has a budget to do it, we would still… want to buy directly.”