Commuter Ads, a public transit-focused ad agency, is celebrating $1 million of revenue paid over time to Greater Dayton Regional Transit Authority (RTA) — as well as plans to expand.
Russ Gottesman, Commuter Ads president and chief executive, said the company plans to expand into a new market. While he wasn’t ready Monday to say where, he said it will be Commuter Ads’ fourth Ohio city and 12th overall. The city may be named in a week or so.
“Not only are we doing well, but our sales and our revenues continue to increase every single year,” Gottesman said. Annual revenue is at the “multi-million dollar” level and sales have increased 30 percent each year, he said. And the business enjoys a better-than 87 percent renewal rate among clients who book five-figure contracts for 4.5 months or longer, he said.
Commuter Ads patented a way to send 15-second audio and digital text-scroll commercials wirelessly to bus riders.
“We’re talking about a captive audience,” Gottesman said. “You cannot DVR” a bus ad.
An oversized $1 million check will be presented to RTA’s board of directors today
Jessica Heffner, RTA marketing manager, said the amount represents revenue from bus advertising paid since 2009. RTA is not receiving a one-time lump sum, she noted.
Commuter Ads was launched with the establishment of a contract with RTA. Dayton and RTA were the company’s first city and client.
“During the recession we were looking for alternative revenue streams to support our ability to continue to maintain service levels. When (Commuter Ads founders) Katie and Russ (Gottesman) made the pitch to leverage our existing GPS technology in the buses for location-based ads we felt that there was really no downside for us, only revenue potential,” Mark Donaghy, RTA chief executive, said in a statement.
“The rest is history, including a national company being headquartered here in our hometown as a result of our willingness to give them a chance,” Donaghy added.
CommuterAds says it is the only company to use existing technology on buses and trains to broadcast GPS-targeted ads along routes relevant to advertisers. According to its business model, ad revenue is split with transit companies. It has contracts with transit agencies in Cincinnati, Chicago, Tampa, Fla., Kansas City, Mo., San Bernadino, Calif., and elsewhere.