Could generate more revenue
Plans to outfit the resort’s Boardwalk trams with digital ads are gaining traction for this summer, and if implemented could end up flowing more cash into the city’s transportation budget.
Members of the resort’s Transportation Committee voted last week to begin the steps to transition the space on the city’s eight rear tram carriages to digital advertising platforms. The idea was floated in the fall when Gateway Outdoor Advertising was preparing to take over the contract to sell ad space on city buses and trams from longtime contractor Vector Marketing.
Transit Manager Rob Shearman said Gateway officials researched the concept and determined that they could replace the regular screens, which have been a hard sell to local vendors, with digital ones for an overall bigger return on investment. Shearman likened the new ads to digital displays on billboards that change regularly on short intervals to showcase different vendors.
Shearman said company officials believe they can generate three to five times the revenue currently collected on the spaces.
“We currently charge $1,500 a month for ads on rear facing panels of trams,” Shearman said. “[The company] suggested that the revenue could be between $4,500 and $7,500 for the backs of the trams for the month.”
While Shearman called the projection “ambitious,” he said he believes the initial startup costs can easily be recovered within a year or two.
Gateway officials determined that the initial hardware and installment will cost $37,000 and floated several different financing options. They consisted of having the town pay for the equipment and owning it, similar to the setup with the current LED backlit displays; amortizing the cost across the six-year contract term; or having the company pay for it outright and take ownership at the end of their contract.
In response to a request for a recommendation on the options, Shearman and Public Works Director Hal Adkins said, despite some pushback in the past about tram ads overall, that it is good idea pursue digital ads for the trams. They also said they like the option of the company paying for the equipment and owning it.
Shearman said he was initially hesitant to make a recommendation to OK the digital ads because of the resistence that has been received, which committee members said came from members of the Ocean City Development Corporation in the past.
Glenn Irwin, the executive director of the OCDC, said in an email this week that organization members have not yet been asked to weigh in on the digital ads for the trams and have no comments, but that they have not always been in favor of the tram ad concept overall.
“In the past years our Boardwalk Committee has not been pleased with the signage design of the boardwalk trams or of the type of signs,” he said. “Many of the advertisers were often not from Ocean City and not local businesses.”
Committee members said they see the ads as a revenue generator and positive attraction and want to expand the offerings.
“I think people like seeing the ads,” Mayor Rick Meehan, who serves as committee chairman, said.
The committee ultimately voted to direct staff to fully research the digital ad concept and bring them final details to review for a formal recommendation to the mayor and council at their next meeting in February.