Media assesses RTA's projected ad revenues

RTA is inviting advertisers to display their products on air-conditioned bus stops (PIA TORELLI)

Claims that newly introduced advertising sites on the Metro and bus shelters could generate revenues of up to Dh500 million a year are being questioned by industry experts.

The estimate came from the Roads and Transport Authority (RTA), which launched the projects.

Advertisers are being invited to buy naming rights to 23 of the 48 Metro stations. And displays on the air-conditioned bus shelters, which are being installed across the emirate are also up for grabs.

Supporters say the schemes will benefit from an expected expansion of the Dubai advertising market driven by business growth, which will boost revenues by up to 30 per cent per year.

But critics say the advertising market is worth Dh5.87bn and say the Dh500m target – equal to 8.5 per cent of the total – is over ambitious. They believe the target audience, visibility and locations of the sites do not justify the estimate and question whether the sites will be useful as marketing tools. Avi Bhojani, CEO of BPG Group, said that "although the advertising opportunity is huge, RTA needs to assess market realities before setting high revenue expectations from outdoor and media opportunities being created as a result of the Metro.

The total advertising expenditure pie will need to be looked at by the RTA, and I believe that RTA could well capture 10 per cent to 15 per cent of this total since traditional media vehicles such as newspapers, TV, radio, magazines and outdoor as well as new media such as internet are also aggressive with innovative offerings for advertisers". An expert at a major Dubai media buying company said that Metro station naming rights could form an effective tool in building brand awareness.

"The name of the brand is converted into a landmark recognised on maps, in communities and by tourists and visitors. But who needs such branding and who can afford it?" He said another important factor was the issue of who would commute on the Metro or travel on public transport busses.

"These services are mostly used by low-income groups so only a few sectors with affordable products – such as fast-food brands, low-cost mobile phones and consumer products – will benefit from these advertising opportunities," he added.

Eric Bequin, Regional Managing Director of OMD Mena, was more optimistic about the initiative's potential. "Public transport advertising forms part of the traditional array of advertising formats, both complementary and out-of-home advertising," he said.

"The development of this type of advertising is exciting because it provides advertisers with a captive audience and is therefore very likely to contribute to the growth of the market in general and of outdoor advertising in particular.

"Bus stops in Europe now add Bluetooth technology to send out messages, while in other cases consumers can play or download content from them. What was once static is now dynamic and interactive."

The RTA has said it expects billions of dirhams to be generated from the naming rights sales over the next 10 years. Bidding for each station will start at Dh6m per year but the cost is expected to double during the sale process. The successful buyers will enter into a 10-year commitment.

As a comparison, a large hoarding costs between Dh1m and Dh5m a year, while a bridge banner cost between Dh60,000 and Dh120,000 a month.

Advertising fees for each of the new bus shelters developed and operated by Right Angle Media are set at Dh30,000 per month. The RTA will receive a fixed percentage of the revenues in addition to a Dh17.5m annual operating fee.

Scott Rowe, Right Angle's Business Development Manager, estimated that up to Dh30m would pour in by the end of December 2008, when 1,000 shelters are due to be in place.

"The new RTA bus shelters have the capacity to deliver a fairly broad coverage targeting various audiences."

Comments

Comments