EDITORIAL: Improve Efficiency, Grow Revenues with Urban Advertising Program

Cincinnati City Council made the well-intentioned decision to prohibit advertising within the public right-of-way. The idea was to rid the city of what some perceived as unsightly bus bench advertisements and invasive and heavily lit billboards.

As is often the case with new regulation, it has created unintended consequences including the inability for Metro to collect advertising revenue from their bus shelters and stymieing the ability for Cincy Bike Share to properly advertise on its planned system in order to pay for its annual operating expenses.

As a result, the City of Cincinnati should toss out the ordinance approved last January and replace it with a new comprehensive Urban Advertising Program that protects residents from unsightly additions in their neighborhoods, while also preserving the flexibility for the city and its various agencies to collect revenues that reduce the burden placed upon taxpayers.

SORTA Non-Transportation Revenue

Public Right-of-Way Advertising Lease
Under UrbanCincy’s proposed plan, the City of Cincinnati would lease their advertising assets. These assets would include a predetermined set of advertising locations (bus benches and shelters, newspaper stands, bike share kiosks, car share and taxi cab stands, and intercity bus stops).

The lease with the private company that would manage the system would then include a small upfront payment for the rights to the assets and annual payments to an authority that would oversee the program.

Such agreements are commonplace in many other North American cities and are often undertaken by companies like JCDecaux, Clear Channel and Lamar.

Program Membership & Representation
In this proposed arrangement the City of Cincinnati would be one entity, albeit the primary one, in the overall program since they control the right-of-way. The Southwest Ohio Regional Transit Authority (SORTA) would also be involved so that they could have representation for their Metro bus and streetcar systems. Cincy Bike Share would then be a third organization that would need to be represented, along with a representative for private taxi cab, car share and intercity bus companies.

The City’s established Community Councils should also have representation on the board, and potentially even share directly in the revenues generated by the program outside of those funds paid to the City of Cincinnati.

The share of the annual revenue payments, of course, would not include any of the private companies operating within the public right-of-way, such as Megabus or Zipcar, but their representation on the board would ensure that their interests are in fact considered in the oversight of the program.

Essentially their lack of collecting annual revenue payments would serve as their annual payment to advertise their particular operations within the public right-of-way without needing to go through the private company managing the assets. This allows those companies to advertise for their services in the public right-of-way, which is currently prohibited.

The members appointed by these various agencies and companies would then become the decision making board governing the new program. This board would also be responsible for contracting out the management of the program.

Urban Advertising Program Org Chart

Economies of Scale
Bringing all of these various entities under one roof, with one unified leasing strategy, will increase the value of public right-of-way advertising. Businesses could work with their advertising representatives to ensure the exact market saturation, exposure and risk aversion as is desired. They would have one contact point that could manage their advertisement campaign in a comprehensive, city-wide manner.

This would also mean that the various government agencies and private companies operating in the public right-of-way involved would not need to have their own full-time staff equivalent to manage their own individual advertising program. Instead, they would collectively decide upfront on an initial value assessment of their various assets, and an ongoing value share agreement based on the contracted annual payments.

Standard Guidelines
The appointed board would be able to determine what kind of content to allow to be advertised. This would need to be a decision made up-front and in conjunction with the private operator so that there is no confusion later. But this would, in theory, allow advertising to return but in a regulated marketplace, thus preserving neighborhood character and integrity.

This is not something that can be accomplished without a separate operator involved, since the City and other public entities are not allowed to decide who and who cannot advertise.

Right now none of these entities are able to take advantage of the potential advertising revenues that would otherwise be available. And if they were, the total profits from the system would be severely diluted due to the fractured and duplicative management and oversight needed.

This Urban Advertising Program would solve those problems by allowing for the capture of an unrealized revenue stream in a well-regulated manner that would protect the integrity of our neighborhoods.

But perhaps even better is that the program is scalable and could include other cities like Norwood, Covington and Newport to opt in should they so choose. All that would change is the representation on the board and the share of the annual revenue payments.

Advertising is part of everyday life. By prohibiting our local governments and public agencies from benefiting from the revenues that come with it, we are only tying their hands and placing an even greater burden on taxpayers. There is certainly a balance to be struck, but UrbanCincy is confident that the representatives that would make up this board would be more than capable at striking that right balance.

This is the third part in a series of proposals offered by UrbanCincy that would help grow city revenues, enhance public services and make for a more efficient local government. If you are interested, you can read our proposal for shifting to a Pay As You Throw trash collection system and our eight-point plan for fixing the city’s broken parking system.

  • Matt Jacob

    There’s so much that this all could mean depending on how it’s implemented. I think it makes sense to have a board overseeing the whole scope of advertising in the city either way. Any idea if there’s a current function within the city administration that has similar or part of these responsibilities already? who enforces the current advertising rules?

    SORTA (and possibly the Bike Share too) should get an exception to advertise their own services no question. But I’m not so sure they should be able to advertise for businesses at their stops in the name of additional funding. McDonalds and Taco Bell ads at stops, along with the bench ads, were a part of the problem if I recall correctly and even if SORTA was making money on those I’m not so sure we want to see those type of ads return. If the stop ads could be tailored to give local businesses an advantage, say you can only advertising for a business within a half mile of the stop or stops are set asside for the closest NBD businesses, it might be more palatable. If not done right though it could revert back towards what we tried to fix before.

    For the same reason I don’t think that I like the lease idea to Lamar/CC types. I think they bring in too many generic/national ads vs local neighborhood ones and tend to contribute toward the clutter problem that we tried to clean up. But again it might work if the right restrictions are put in place to avoid this, so it’s hard to say. Additional funding via this avenue would be nice, but I think the way our city looks has a big effect on the quality of life that shouldn’t be soldout here for money’s sake.

    Randy, where do the hanging banner ads on the CBD light poles and sidewalk sandwich boards fall into this plan and regulation in general? They still are being used currently in the public right of way to this day; banners all throughout downtown and most notably the Gwynne building has multiple sandwich boards (are those springy ones still considered sandwich boards?) on the sidewalk out front (in addition to multiple other places throughout downtown).

    • http://www.UrbanCincy.com/ Randy A. Simes

      The problem with the previous bench ads was that they were illegal and unregulated. Creating a marketplace where people can advertise would seem to fix that.

      I understand what you’re saying about the look of the city not being overtaken by ads. While there is a potential that ads can do that to a city, it merely takes some level of regulation to the system to avoid it. Furthermore, I would contend that the bus shelters that are ad-less are now bigger eyesores than before. If you don’t utilize an expert ad company like Lamar/CC, then you’re just creating inefficiencies in the system and ensuring you won’t get the best performance.

      Finally, the banners up on light poles are considered more along the lines of public information, not ads. Yes, they are advertising something, typically a public event, but they are classified differently under the code.

    • Matt Jacob

      Personnally I think the new bus shelters at the transit hubs look better ad-less and their clean design promotes the brand and image for SORTA better than any ad could. The old ones were and still are huge eyesores like for example at Main and Central Parkway where it’s now hollow because all the glass was broken. I see increasing advertising at shelters as more of these eyesores which might look good today and then fall into disrepair later.

      The level of regulation is the biggest wild card towards whether this is successful or not, but I’d like to err on the side heavier-handed regulation like we have now than too light. Any change needs to be gradual and measured.

      Why is that on the banners? What makes them different, any ideas? And any idea on the sandwich boards? Where would both of these fall within your system?

    • http://www.UrbanCincy.com/ Randy A. Simes

      There is more flexibility if the ads are public service announcements, which is generally what those banners are. It’s also publicly owned, so there is no transfer of money with them like there is for advertising.

      Sandwich boards are often permissible under the zoning code for businesses, but they must typically apply for a sign permit. If you really want to get down into the weeds, feel free to take a look at any city’s signage ordinance. This is a separate thing altogether, so it would be separate from what I’m suggesting here.

  • Mark Christol

    Your regulation & hierarchy seems a little Byzantine but, yes they should try to get more advertising. The ban on non profit ads definitely needs to be lifted. Route specific ads on buses make a ton of sense to me. Any idea what the revenue from the audio ads are?

    One of the things that’s going to be interesting moving forward is how displaying ads is going to change with cheaper video screens and stuff like epaper. Route specific ads + GPS + modifiable displays would be great. Isn’t the location part of the audio ads on the buses?

    Looking at old photos, it’s amazing to see the amount of advertising that used to be on the city streets.
    http://drc.libraries.uc.edu/handle/2374.UC/718490

  • EDG

    Seems too open-ended, the city already barely enforces illegal signage and zoning has no authority over signage in the right-of-way, so then you have an administrative issue.

    It would be simpler to construct a set amount of billboards along highways and then lease that space. Revenue would be multiple times leasing bus shelter ad space.