Fast Track to Revenue : L.A. Subway System Ad Policy Is Likely to Be High Tech and High Profit

A journey into the Los Angeles subway system may soon resemble a trip to Disneyland.

While the rides won’t be as hair-raising as Space Mountain, some of the technology and advertising concepts of the Happiest Place on Earth may find themselves in the bowels of the new Metro Red Line and on the platforms of the Metro Blue Line by the summer of 1994.

In devising an advertising policy for the subway and light-rail systems, the Los Angeles County Metropolitan Transportation Authority is considering a cache of cutting-edge ideas that would go beyond traditional billboard advertising. The policy would make subway tunnels and trains more enticing to advertisers, transit officials said, while keeping them free of unsightly graffiti.

Among the ideas being considered:

* Video screens suspended from terminal ceilings offering the Commuter Channel, already widely used in San Francisco, Chicago and Philadelphia. The closed-circuit system broadcasts a mix of news, weather and sports, along with transit information and commercials. ABC News and Dow Jones Information Services are among those that appear on the channel. Walls of video screens with spectacularly huge, single-image displays might also carry the Commuter Channel.

* An “adopt-a-station” program similar to many Disney attractions, in which a major corporation sponsors an individual station and perhaps provides a theme and its own attractions. Holographic displays, such as the ghosts in Disneyland’s Haunted House, would be one likely device used by a sponsor to provide transit information. They could be programmed to respond to patrons’ spoken questions and to plug a sponsor’s products.

* Interactive video kiosks with touch screens that would allow riders to map out travel routes and learn about the city and state. When idle, the screens could flash silent advertisements.

“We have a wonderful opportunity in Los Angeles to look to the 21st Century . . . and have a transit system that is as user-friendly, clean and safe as possible,” said Jessica Cusick, director of the art program for the MTA.

With that vision in mind, the transit authority has hired two consultants--Javier Del Valle, president of DivTech, a technology consulting firm, and Joel Rubenstein, president of J. R. Associates Inc.--to develop an advertising strategy by mid-April that moves away from static images that transit systems have long used in bus and commuter rail systems, to one that employs advanced multimedia technology. The full MTA board is expected to vote on a policy by early summer.

Del Valle and Rubenstein are analyzing a myriad of possibilities, including conventional billboard-type ads, and have been in contact with companies that contract with advertisers to learn what is more likely to sell in a commuter rail system.

While the transit authority isn’t ruling out the use of fixed signs in illuminated panels now being used for public service ads in the Red Line, Cusick said electronic media would not be the easy targets for graffiti that signs are, and would help avoid the “visually cluttered” environment that irritates riders and discourages advertisers.

The MTA wants to get people out of their cars and onto the trains, something officials say video could help accomplish because it is less susceptible to graffiti--a sign of urban decay.

Except for a smattering of public service ads in illuminated fixtures, the tunnels remain free of ads. The trains, designed to be ad-free to avoid graffiti, will likely stay that way, Cusick said.

While transit officials say they are eager to maximize commercial revenue by appealing to advertisers’ changing needs, they insist that ad revenue has little effect on keeping fares under control.

“Advertising revenue has never been a factor in setting fares,” said Tom Rubin, the MTA’s controller-treasurer.

Rubin noted that the $4.8 million in advertising revenue the MTA pulled in from its buses in 1992 was less than 1% of the more than $600 million used to operate the system.

The story is the same at established rail systems across the country. The New York City Metropolitan Transit Authority, the nation’s largest, pulls in only about $7 million a year in ad revenue. San Francisco’s BART system took in an estimated $1.2 million in 1992.

Rubin said the Los Angeles County MTA has been unable to make projections about potential ad revenue because the rail lines are too new to establish a ridership level and because the board has yet to decide on which media to use.

Still, transit officials concede that every dollar counts and say that preliminary research shows that electronic media can help maximize revenue.

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To capture the attention of commuters waiting in tunnels or on platforms, advertisers favor more exciting media, such as video, said Peter Stranger, president of Stranger & Associates, a Los Angeles-based advertising firm.

“There is a premium for electronic media over print because the sight, sound and motion allow the advertiser to make a stronger impression,” Stranger said. “They’re going to be willing to pay more for that.”

Mark Gill, senior vice president of publicity and promotion for TriStar Pictures, a potential advertiser, agreed. Most consumers feel better about a movie after previewing a chunk of actual footage than they do after seeing a billboard-type ad, he said.

Equally important, “advertisers are looking to a medium that can be updated almost immediately,” said Joseph A. Calabrese, general manager of Metro Vision of North America Inc., the Syracuse-based company that operates the Commuter Channel.

Thus the transit authority stands to generate more revenue in the subway by opting for high-tech electronic media.

Typically, single-sheet, poster-type ad space is sold at the monthly rate of $1 a month for every 1,000 people exposed to the ad, while commercial time on the Commuter Channel costs $3 per 1,000 people exposed to it, Calabrese said.

Installation of the systems would likely cost Los Angeles taxpayers nothing. Ad companies would install the systems at no cost and pay transit authorities set fees.