Chicago Transit Board Approves New Advertising Contract

December 9, 2009

The Chicago Transit Board today approved a five-year contract with Titan Outdoor, LLC, for the sale and placement of print and digital advertisements throughout the agency’s properties.  Under the terms of the print agreement, CTA is guaranteed a minimum of $80 million or 62.5 - 63.5 percent of net advertising receipts, whichever is greater, from print advertising over the next five years. 

For digital advertising, CTA is guaranteed a minimum of $3.3 million for all five years of the base contract. Under the agreement, Titan must recoup all costs associated with the purchase and installation of the digital displays – through revenue generated from digital ads – before CTA begins receiving its share of guaranteed revenue from this portion of the contract. Currently, there are 92 digital displays at 17 rail stations, 25 king size digital displays on buses, one urban panel and one turnstile display at the 47th Street Red Line station.
 
“More than half of CTA’s operating budget is funded by system-generated revenue and after fares advertising is the largest source of revenue,” said CTA President Richard L. Rodriguez. “New and innovative opportunities for advertisers have been introduced over the past several years on CTA properties to appeal to advertisers.  The revenue generated helps support the agency’s day-to-day operations.”

Previously CTA’s advertising contracts for print and digital advertising were under separate contracts.  The approved contract has both types of advertising managed under the same agreement which is more advantageous for CTA and advertisers in coordinating opportunities for companies that want to advertise on the system.

Both print and digital advertising have been impacted by the weak economy and the new agreement takes into account the current market conditions and expectations moving forward.

The contract also contains five one-year renewal options for both print and digital advertising.  In the event all five-year options are exercised for print advertising, the agency would be guaranteed a minimum total of $105 million or 65 percent of net advertising receipts, whichever is greater. For digital advertising, the additional five-year options for would provide a minimum of $7.6 million. If, however, revenues from digital advertising exceed the minimum guarantee, CTA would receive 55 percent of all revenues for the duration of the contract. 

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