Jorge Posada's likeness greets straphangers on the 42nd St. Shuttle. The wrapping and video screens are part of the MTA's increased push for more advertising dollars. (Photo by Lorenzo Bevilaqua/TBS)

The 42nd St. Shuttle now features in-car video advertising. (Photo via MTA)

The MTA’s fleet of shiny new R160s all come equipped with video screens on the FIND displays. Originally intended to show a rotating mix of MTA announcements and advertisements, these screens have served only as self-promotional vehicles for New York City Transit. This week, though, the MTA announced the introduction of video advertising to its favorite marketing guinea pig, the 42nd St. shuttle.

As part of an effort to milk every last dollar out of potential advertising opportunities, the MTA in conjunction with TBS and Major League Baseball unveiled 10-inch video screens in a fully-wrapped shuttle car that allow TBS to air its ads, sound-free. While the authority declined to reveal how much TBS had paid for the video screens as well as a fully wrapped shuttle train complete with seats resembling those found at a baseball stadium, the authority drew in over $127 million in ad revenue last year. That total is up from nearly $89 million in 2004, and the authority has only begun to tap into its branding potential.

“The MTA earns more than $100 million per year from sales of advertising space, mostly through traditional print media, but this traditional advertising has suffered as a result of the recession,” MTA Chairman Jay Walder said in a statement. “Our uncertain finances mean that we have to think creatively to maximize the value of our physical assets. One way we are doing that is by creating more dynamic advertising opportunities.”

TBS and Major League Baseball have branded one of the 42nd St. Shuttles in anticipation of the upcoming baseball playoffs. Mariano Rivera presides over subway benches made to resemble stadium seats. (Photo by Lorenzo Bevilaquia/TBS)

Shuttle wrapping has become de rigueur lately, and in fact, the 6 recently received a wrapped car of its own. The video screens, however, mark the first time that moving images have been used for the purposes of in-car marketing campaigns.“The MTA is creating new, dynamic advertising opportunities utilizing the latest technology to both increase ad revenue and communicate better with our customers,” Walder, in a buzzword-laden statement, said. “Inviting advertisers to “wrap” entire trains and the use of digital displays will generate a buzz among customers and advertisers alike.”

For the first few days, the in-car video screens will simply promote the upcoming baseball playoffs on TBS while star players — Jorge Posada, Derek Jeter and Mariano Rivera from the Yankees; Cliff Lee from the Rangers — decorate the outside of the cars. Once the playoffs begin, however, TBS says the video ads will include highlights from the previous night’s games and “up-to-the-minute information” on match-ups to come. “As people are commuting home and making decisions on what to do with their evening, Turner will reach millions of potential viewers in a creative way with messages about the excitement of the Postseason,” MLB Vice President Tim Brosnan said.

While executives can spew on-message quotes, baseball fans are the ones who are latching onto the ads. “It’s too bad I can only take this train one stop,” Anthony Polini told The New York Times. “I’d do this in my room, but my wife wouldn’t let me.”

Of course, while New York City Transit is celebrating an advertising first for them, City Room reminds us that PATH had video ads installed in 2009, and subway systems in cities such as Boston, Buenos Aires and Madrid have used video screens for years. The MTA says the agency’s budget problems will lead to more ad opportunities. “Customers in a transit environment can expect increasing levels of sophistication in advertising,” Aaron Donovan, agency spokesman, said.

Advertising will now appear on the outside of LIRR train cars. (Photo via MTA)

The video screens on the shuttle — sans sound — aren’t the only new frontiers unveiled this week. The authority also set the first commuter trains with external display advertising on the rails. Fifty of the LIRR’s M7 cars are displaying ads along the bottom as many IRT subway cars do today. The ads, says the authority, are visible to those boarding at stations as well as drivers and pedestrians who pass the train. If this three-month trial is successful, the LIRR fleet may see an uptick an ads. The MTA, however, did not say by what measure “successful” will be judged.

Over the years, subway advertising, whose revenues were once called a balm for hurt minds, has become more intrusive. Moving images will do nothing to stop that forward march, and the MTA says it is going to explore 3-D images and in-tunnel advertising as well. As much as we may bemoan — or look forward to — the themed subway cars, the MTA’s economic situation demands it.

After the jump, a video describing the new advertising initiatives and a behind-the-scenes look at the way MTA crews wrapped the shuttle and prepared the new video screens. Read More→

In 2008, an alluring ad for vodka loomed over a staircase at Broadway/Lafayette. (Photo by flickr user Dom Dada)

Since day one, subway advertising has been controversial. Today, we argue over religious themes and offensive images, but back in the early days of the subway, potential straphangers were outraged that ads would be thrust upon them. The revenue, said Squire Vickers, could serve as “a balm for hurt minds.”

When news broke yesterday that the authority had approved an anti-mosque ad sponsored by a right-wing organization based out of New Hampshire, a mix of support and outrage developed. Some believed the ad should stand on grounds of free speech and tolerance; others were dismayed that a callous and wrong-headed message would see the light of day; still others support the message and the medium. The MTA, as Michael Grynbaum reports today, had very little say in the matter.

In a piece that delves into legal history without getting too technical, Grynbaum explores how the authority hasn’t had much success in turning down advertisements. It has tried to beef up its review powers, but every time a decision is challenged in court, the MTA loses. Grynbaum reports:

The authority adopted rules in 1997 that allowed transit officials to reject advertising they considered obscene, deceptive or “directly adverse to the commercial or administrative interests of the M.T.A.,” among other reasons. (The guidelines were prompted in part by complaints about a racy Calvin Klein underwear ad.)

But transit officials have faced legal challenges before, and in those challenges the authority tends to lose. New York magazine successfully sued the authority in 1997 after transit officials removed ads poking fun at Mayor Rudolph W. Giuliani, at the mayor’s request. (The Supreme Court rejected an appeal.)

An ad submitted by riders’ advocates in 2000, which compared the morning commute to a packed ride in a cattle car, was initially rejected because it might discourage people from riding the subway. Those objections were quickly dropped after the New York Civil Liberties Union brought a lawsuit claiming censorship.

In June, the authority removed a Georgi vodka ad featuring a swimsuit model from some city buses after complaints from Hasidic leaders in Brooklyn. “We try to limit more suggestive ads upon neighborhood request,” the authority said in a statement. This week, the executives of Georgi Vodka said they wondered why the twin towers image made the cut and their company’s bikini ad did not. “We didn’t feel they came to bat for us,” said Phyllis Valenti, executive vice president for Star Industries, which owns the vodka. But she said lawyers had advised the company not to sue.

The real issue with the MTA’s ability to review and ultimately reject ads is constitutional in its scope. The MTA is a government actor and thus cannot enact regulations that limit the freedom of speech we enjoy as a First Amendment right. Even though advertising doesn’t enjoy the same broad protections that other speech does, as long as the ad is not misleading or defamatory, the MTA must allow it to proceed. For nearly $10,000, Pamela Geller’s ad will stand.

MTA officials recognize the intractable position in which the law places them. Plus, in age of uncertain economics, the revenue is still a balm for hurt minds. “We do the best we can within our guidelines, with the understanding that in a lot of cases, we’ll have to put up ads that we may or may not agree with,” Jeremy Soffin said to The Times. “There will always be cases where people disagree…You have people who are purposely trying to be provocative, and sometimes, frankly, more interested in the publicity that comes with the conflict, as opposed to the benefit of actually running the ad.”

For the past few weeks, New York City has been embroiled in a political battle over an Islamic Community Center near Ground Zero that will include a mosque. The Cordoba Center, approved last week by the Landmarks Preservation Commission, will take over the buildings at 45-47 Park Place, just two blocks away from Ground Zero, and the building will be modeled to resembled a JCC or a YMCA but with a mosque. It has been nothing short of controversial.

While Mayor Bloomberg supported the building, various politicians from across the country — including a prominent one from the remote state of Alaska — spoke out against it on the grounds that it was insensitive to the survivors of Ground Zero. Why should Muslims be allowed to proclaim their faith, even peacefully, in the shadows of the buildings brought down by religious extremists nearly nine years ago? The debate grew so heated that Bloomberg lashed out at those attempting to graft their views onto New York. “A handful of people,” he said, “should be ashamed of themselves.”

Now, the controversy will arrive front and center on New York City buses. Last week, the American Freedom Defense Initiative, a right-wing organization run by Pamela Geller, attempted to purchase ad space on MTA buses to run this ad, but the MTA declined, claiming that the ad violated its procedures. It didn’t issue a final ruling on the matter, and after Geller tried to tinker with the image, she filed suit against the MTA, alleging violations of her free speech.

Tonight, the MTA announced that it would accept the ad in its original form. “While the MTA does not endorse the views expressed in this or other ads that appear on the transit system,” spokesman Kevin Ortiz said in a statement, “the advertisement purchased by a group opposing a planned mosque near the World Trade Center was accepted today after its review under MTA’s advertising guidelines and governing legal standards.”

At her website, Geller proclaimed it a victory for her cause, but city representatives to the MTA had a different take on it. “The wonderful thing about our country is that people have a right to express themselves, as long as it doesn’t endanger anyone’s life,” John Banks said to The Times, “I support it, even though I disagree with it vehemently.”

For her part, Geller doesn’t seem to care if the imagery is hurtful to New Yorkers. “It’s part of American history,” she said. Who can argue with such logic?

From the start, the main issue over the mosque has been an attitude of fear and retribution vs. one of tolerance and acceptance, and the MTA has, by allowing this group to advertise, taken the side of the latter. Of course free speech should triumph in New York because free speech is one of the bedrock principles of the U.S. Constitution. But there’s a deeper question at play here: Does advertising on a bus even matter?

One of the challenges the MTA faces in selling ad space on a bus or train is one of inattention. We barely pay attention to subway ads today because they have become so ubiquitous, and every time a controversy crops up — whether it’s over a pro-atheism ad that few people even notice or some racy romance novel with a suggestive cover — transit riders ignore it. We hear the debate raging amongst the talking heads on TV and the shouters on talk radio. We see the consternation in our newspapers’ op-ed pages, and we know that a Sarah Palin and a Michael Bloomberg will square off on an issue that touches the lives of few in anything more than a symbolic way.

Yet, life goes on with transit. The MTA will make nearly $10,000 off of this ad, and most New Yorkers won’t even blink. As tasteless as the image might seen, it’s nothing we haven’t seen before.

While most Straphangers were busy adjusting to life in the post-service cuts era this morning, some along the 6 line probably did a double-take when their regular train pulled into the station. Transit this morning debuted its first ad-wrapped non-Shuttle subway train along the popular Lexington Ave. IRT local route.

The ad campaign is for Target, and it promotes the discount retailer’s new store. Initially, Transit had said that the fully-wrapped subway car generates $250,000 in advertising revenue over six weeks. The authority later said that this figure was incorrect. At that rate, Target would be paying just under $42,000 per week.

Transit says it took two work crews three days to complete the wrapping, and the process required the help of computer imaging software. At first, the sight of such an obvious ad is a bit glaring, but why shouldn’t the MTA be milking as much money as it can out of its pristine advertising surfaces?

After the jump, a pair of views of this train car. All images come courtesy of NYCTSubwayScoop on Twitter. Read More→

A few weeks ago, the Working Families Party sent out an email about a planned ad campaign aimed at Mayor Michael Bloomberg. Using parodies of the MTA’s ubiquitous service advisory signs, the WFP wanted to bring attention to the fact that Bloomberg had made some lofty campaign promises concerning transit in New York City but had failed to live up to those promises so far. Using the subway bullets to take jabs at the Mayor, the WFP proclaimed “OMFG” and “WTF?”

When these ads hit my inbox, I had a feeling the MTA would reject them. They resembled the service advisories, and the MTA would allege that the signs would confuse riders into thinking the authority itself endorsed the views expressed by the WFP. It is unsurprising, then, to read today that the MTA has rejected these ads on exactly those grounds. The agency will forego between $25-$50,000 and may incur a First Amendment challenge. But the ads, they say, are obscene.

The Daily News’ Pete Donohue has more:

Transit officials rejected the spots because the acronyms imply obscene language that many riders may find “offensive, improper or in bad taste,” MTA spokesman Kevin Ortiz said. The ads also look too much like the real thing, using subway-line logos to form the suggestive acronyms, according to the MTA. Some riders might believe they are real authority bulletins, officials said – or that the authority agrees with the political message.

The Working Families Party was looking to spend $25,000 to $50,000 for a four-week run in the transit system, party spokesman Bryan Collinsworth said. “We were really hoping to put some pressure on the mayor,” Collinsworth said. “We think he controls a central piece of the puzzle.”

…Bloomberg spokesman Marc LaVorgna said the campaign was simply off track, in part because the mayor speaks out daily about the need for more transit funding. “Their anger on this issue is misdirected,” LaVorgna said. “They should be directing their anger to the state, which has yet to come up with a successful funding source for the MTA. They should be talking to the entity that controls the MTA, which is the state and the state Legislature.”

Although LaVorgna is right in telling people to direct their ire toward state officials, Mayor Bloomberg has not tried to deliver on his lofty campaign promises and has not fought hard for transit either at the state or local level. The city hasn’t volunteered to up its contributions to the Student MetroCard program and isn’t searching for alternative city-based funding schemes. The ads indeed had the right message.

But for the MTA, it made sense to reject these ads, and it will make sense for the WFP to explore a lawsuit. Commercial speech isn’t as protected under the Supreme Court’s First Amendment jurisprudence, but as the MTA is a government actor, the WFP may be able to sustain a challenge to this decision. The resources, though, would be better spent fighting for transit funding instead of against the MTA.

As the MTA struggles to close an ever-widening budget gap, the authority is bent on maximize its revenue sources. If the agency, the argument goes, can find ways to tap out its self-generating revenue streams, the city and state might be more willing to help close the remaining gap. As laughable as the latter part of that line of reasoning sounds, the MTA is at a point where it cannot ignore potential money-making schemes.

Enter the argument for station naming rights. Last June, after being rebuffed by the Mets and Citi over a station naming rights deal in Queens, the MTA secured an annual payment from Barclays to append a corporate moniker to the Atlantic Ave./Pacific St. stop. The Barclays Center will one day rise above that busy Brooklyn station, and when the Nets’ new arena opens, the station will be called some permutation of Atlantic Ave./Pacific St./Barclays Center. Whether the corporate name will come first remains to be seen, but the MTA will enjoy 20 annual payments of $200,000 for these rights.

For the MTA, these naming rights deals are forging new ground, and the authority hasn’t formalized publicly how the station names will be structured. Straphangers need the geographic indicators that now mark stations throughout the system, but beyond that, does anything go? Perhaps the MTA could take a cue from the Chicago Transit Authority. In the Windy City, the CTA is in straits as dire as our own MTA, and the agency, as The Sun-Times recently reported, is looking to pursue an aggressive naming rights sales pitch.

Mary Wisniewski spoke to Philip A. Pagano, the head of the CTA, about the naming rights deals. “There may be a real interest by businesses located along our stations to get advertising,” Pagano said. The example he gave was of a nearby hospital. Perhaps that institution would pay for the station name. What sticks out, though, is Pagano’s insistence that every station would retain its so-called traditional name to go along with the sponsor’s branding. In New York, then, for instance, 34th St./Herald Square — already a freely branded station even if that brand is defunct — could become 34th St./Herald Square/Macy’s.

It seems nearly inevitable that transit agencies will resort to station names and that traditionalists will bemoan the corruption of, well, tradition. On the one hand, it’s jarring to hear and see something along the lines of Times Square/42nd St./Disney. On the other, since Day 1, the part of the subway not devoted to travel has always been about advertising. In fact, August Belmont’s original contract for the operation of the IRT lines allowed advertising as long as it didn’t interfere with “easy identification of the stations.”

The only drawback though is the amount of money the MTA could realistically expect to see from these naming rights deals. The Atlantic/Pacific stop is the 29th most popular one in the system, and for that, the agency drew in just $200,000 a year, chump change in the face of an $800 million budget deficit. As much as I believe naming rights to be an inevitable evil, I have to wonder if it’s worth it for such a pittance. Sometimes, tradition deserves to win.

Titan Outdoor Holdings oversees ad space on the city’s buses and commuter rail trains. (Photo via Titan Outdoor)

As the MTA looks for ways to shore up its leaking budget, the agency is going to have to pursue every available revenue avenue. From service cuts to the unthinkable fare hike, nothing is off the table, and that includes milking every last dollar out of its available advertising surface. What happens, though, if the companies contracted to manage and sell the authority’s ad space can’t pay up?

Today, the Daily News asks just that question in highlighting an internal audit that shows how one of the MTA’s advertising contractors owes the authority $18 million. Titan Outdoor Holdings, the company that sells ad space on city buses and the MTA’s commuter rail system, has not been fulfilling its contractual obligations to the MTA. Pete Donohue has more:

Titan Outdoor Holdings has stiffed the MTA out of about $18 million, coming in short with its monthly payments for nearly a year and engaging in some questionable accounting, an internal Metropolitan Transportation Authority audit revealed. The MTA could recoup the money by cashing a multimillion-dollar letter of credit Titan posted. But officials fear the move would bankrupt the company – meaning even less ad revenue for the authority, according to the audit. “We’re exploring all of our options,” MTA spokesman Jeremy Soffin said.

Titan sells and manages ad space in buses and commuter trains. To win the decade-long contract, Titan promised the MTA 72% of gross revenues – the highest in the industry – or $5.4million a month, whichever is greater. Meeting the high bar wasn’t a problem in 2007 – when the contract started – and 2008 but apparently became tougher early last year as companies trying to survive the recession cut back on advertising. Since February 2009, Titan has paid the MTA about $4 million a month, about $1.4 million short of its monthly minimum, the audit states.

According to the audit, Titan has not been forthcoming with its revenue statements and has been filing some financial reports 18 months late. Yet, as Donohue points out, the MTA is not ready to cut ties with Titan. The agency may lower the required monthly payment, but authority officials do not believe they can secure as good a rate as 72 percent from any other media sales company right now.

As Donohue notes in his article, the money owed to the MTA by Titan would be enough to cover the estimated $17.5 million in subway service cuts the agency plans to initiate later this spring. That is, however, something of a false dichotomy because the MTA has to balance its need for this revenue now against the long-term financial health of its advertising partners. Pushing Titan toward bankruptcy by cashing the letter of credit would solve one problem and create another. Still, with money tight, the authority will be looking to draw in as much revenue as it can and as it should.