Out-​of-​Home Inventory Growing in Public Spaces

Marketers are finding  a number of ways to get their names in front of consumers. It has nothing to do with traditional media companies. Instead, media companies are now competing with state and local governments to get ad money from marketers.

The Great Recession was particularly unkind to local governments that are staggering under the load of costly pension payouts and a general downturn in tax revenue. To raise money, local government agencies and schools are increasingly reaching out to marketers and offering the use of public space in exchange for ad money. A recent New York Times article highlighted how commonplace this practice has become.

Consumers are accustomed to seeing sponsorship-​type out-​of-​home ads in places like stadiums. For many public agencies, extending the concept of sponsorship or out-​of-​home advertising is seen as a preferable alternative to raising taxes, cutting service or hiking fees for transit systems. This climate explains why Barclays is now sponsoring a subway stop in New York City for $4 million over a period of 20 years. And consumers who ride the L in Chicago will soon be looking at ads in stations. These arrangements can also be worth a lot of money to a struggling school district. For example, one media company that helps marketers arrange billboard-​style ads on school buses notes that advertising on 250 buses for a 4‑year period will cost a business about $1 million.

Not everyone approves of this idea. At least one organization, the Public Citizen’s Commercial Alert project, wants consumers to be aware of how our public spaces are ‘being co-​opted by the private sector.’

But as more of these space become available, the management of the advertising business may be put out to bid. Media companies may find opportunity in bidding for these contracts.

[Sources: Rampell, Catherine. On School Buses. Ad Space for Rent. NYTimes​.com. 16 Apr. 2012. Web. 29 Jun. 2012; Cooper, Michael. Your Ad Here, on a Fire Truck? NYTimes​.com. 24 Jun. 2012. Web. 29 Jun. 2012] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.