Bus Wrap Advertising_Rejection of RFPsMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Bus Wrap Advertising
DATE: July 21, 2010
Dubuque
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Economic Development Director Dave Heiar and ECIA Executive Director Kelley
Deutmeyer recommend the City Council reject all responses to the RFP for bus wrap
advertising because the cost for bus wrap advertising is too expensive in the Dubuque
market and they recommend implementation of a local plan as follows:
1. Mission Creative has agreed to mention the bus wraps /decals to their clients as a
resource for advertising and then refer those interested clients to ECIA. ECIA
would not actively sell the bus wrap advertising door to door as our current
marketing firm, Houck Advertising does, but we would utilize local resources for
promoting the bus wraps /decals such as Buyer Supplier Connection program,
business events sponsored by the Chamber, etc.
2. ECIA staff has the capability to design the bus wrap /decals advertisements in-
house and /or work with Mission Creative in the designs, and then use a local
company to produce the bus wrap. In this case, the wrap would not be a printer
full wrap but a partial cut vinyl wrap similar to what you see on the RTA
minibuses. See the attached sample of what is used on the RTA buses. No
more than 50% of the bus would have decal advertising.
3. ECIA staff developed a fee scale more reflective of Dubuque's local market and
would use that fee scale for both the City services and the RTA.
4. ECIA would work from the existing bus billboard contracts and hold a focus group
lunch meeting with the advertisers to discuss the bus wrap advertising and test
the market for the pricing structure and to get feedback on the local market
demand.
5. ECIA would review existing bus billboard contracts to determine City's
commitment to the existing advertisers and offer discounts on the proposed bus
wrap pricing structure to get the advertisers to move to bus wrap advertising
immediately from the bus billboard advertising.
6. Rather than full bus wrap advertising with 75 to 100% of the bus wrapped, use
bus decals with no more than 50% of the bus decaled.
7. The monthly fee received from the advertisers for the bus wrap /decal advertising
would be 100% City income versus splitting the income 50% with the advertising
firm. The production charges would be paid directly to the local company
producing the bus wrap /decal and doing the installation. The design fee would
be paid directly to ECIA for designing the bus wrap /decal image and coordinating
with the local vendor for installation.
The current Fiscal Year 2011 revenue projection of $75,000 appears to be unrealistic. It
is anticipated the income would be closer to $24,000.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David Heiar, Economic Development Director
Kelley Deutmeyer, ECIA Executive Director
chael C. Van Milligen
Keyline Transit
2401 Central Avenue
Dubuque, Iowa 52001 -3302
(563) 589 -4196 Office
(563) 589 -4340 Fax
(563) 589 -6678 TDD
transit@cityofdubuque.org
www.cityofdubuque.org
MEMO
TO: Michael C. Van Milligen, City Manager
FROM: David Heiar, Economic Development Director
Kelley Deutmeyer, ECIA Executive Director
DATE: July 20, 2010
RE: Bus Wrap Advertising
PURPOSE
BACKGROUND
Masterpiece on the Mississippi
The purpose of this memo is to recommend rejecting the two responses to the RFP for
bus wrap advertising and to select a local approach to the bus wrap concept.
A team of ECIA staff met and reviewed the bus wrap proposals submitted by two
consultants in response to the City of Dubuque RFP issued earlier this summer. Two
responses were received. One from Houck Transit Advertising from St. Paul, Minnesota
and a second proposal from MC Squared, LLC from Davenport, Iowa. We reviewed each
proposal and based on quality of the proposal and experience in advertising selected
Hauck Transit advertising for an interview. We eliminated the proposal submitted by
MC Squared because due to its very poor production quality for an advertising firm and
their limited client base and experience in bus wrap advertising. We also talked with
two local advertising firms, Mission Creative and Lamar Advertising about their abilities
to develop a hybrid type system where they would sell the bus wrap advertising and in-
house we would do the design and then have a local firm produce the bus wraps.
Neither Mission Creative nor Lamar Advertising has the staff capacity right now to take
on the bus wrap sales. However, Mission Creative indicated they would be willing to
direct potential bus wrap clients to ECIA if they have inquiries.
DISCUSSION
As the result of the information received from the local advertising companies, the ECIA
team met with Tom Houck of Houck Advertising to discuss their proposal and the
process for selling and installing bus wraps. Tom indicated the following:
1. Houck Advertising is the current marketing firm selling the current bus frame
advertising. He intends to continue selling based on the current contract until he
hears differently from the City and is provided a written notice. He has
relationships built with the existing advertisers such as Pepsi and American Trust
so we told him to continue to not endanger those relationships until the City
makes a decision on the bus wrap advertising.
2. We discussed the many grants the City is pursing to replace the full fleet as well
as the option to replace the fleet through leasing vehicles. Newer vehicles would
impact bus wrap pricing as well as the potential interest from local advertisers.
Newer vehicles could increase the interest level of the advertisers.
3. Houck indicated a large fixed route bus wrap costs $7,000 to $8,000 in upfront
costs charged to the advertiser. Price includes design, printing, installation,
removal and warranty. The monthly charge averages $1,250 per month in
addition to the initial up front installation costs. Houck advertising has their own
sales, design, and installation crew for the wraps. The wrap is a printed vinyl and
runs through a large printer and is different than the smaller cut vinyl version.
You could use a combination of both the cut vinyl and printed vinyl to save costs.
4. Minibuses cost $4,000 to wrap charged to the advertiser. The price includes
design, printing, installation, removal and warranty. The monthly charge
averages $500 to $600 per month in addition to the initial up front installation
costs.
5. If we intend to rebrand Keyline, we would NOT want to wrap the entire fleet.
The new brand needs to remain on the fleet to heighten awareness to the City
transit services. We may want to consider partial wraps or bus decal advertising
or a percentage of the vehicle to wrap based on the new identity and the size of
the vehicle.
6. We inquired about the number of buses wrapped in communities of similar size
and market to Dubuque and that are part of Houck's client base. Janesville has 0
buses wrapped; Minneapolis has 5 out of 1,000 buses wrapped; Rochester has 2
out of 40 buses wrapped; Omaha has 3 out of 120 wrapped; Waterloo has 2 out
of 22 buses wrapped; and Cedar Rapids has 4 of their 35 buses wrapped. All are
Houck Advertising accounts. Houck indicated the demand for bus wrapping has
been low based on the initial up front costs and the economy. In his discussions
2
5. Review existing billboard contracts to determine City's commitment to the
existing advertisers and offer discounts on the proposed bus wrap pricing
structure to get the advertisers to move to bus wrap advertising immediately
from the billboard advertising.
6. Rather than full bus wrap advertising with 75 to 100% of the bus wrapped, use
bus decals with no more than 50% of the bus decaled. See attached examples.
7. The monthly fee received from the advertisers for the bus wrap /decal
advertising would be 100% city income versus splitting the income 50% with the
advertising firm. The production charges would be paid directly to the local
company producing the bus wrap /decal and doing the installation. The design
fee would be paid directly to ECIA for designing the bus wrap /decal image and
coordinating with the local vendor for installation.
BUDGET IMPACT
As previously mentioned, the bus wrap advertising budgeted for FY'11 was $75,000.
This was very ambitious based on the costs to advertisers and the demand both locally
and nationally for this type of advertising. Currently, the billboard advertising revenue
based on three months statistics in FY'10 is $1500 per month or $18,000 per year.
Realistically, I am recommending setting a goal to wrap /decal 4 fixed route buses and 4
minibuses in FY'11. Estimated income based on this goal is as follows:
4 fixed x $549 /month* = $2196 /month x 6 months ** = $13,176
4 mini x $449 /month* = $1796 /month x 6 months ** _ $10,776
Total FY'11 = $23.952
*Based on 12 month contract pricing
* *Based on % of the year providing for a first year discount to switch to wraps /decals
and that we are already in FY'11
Second year and thereafter goals:
5 fixed x $549 /month* = $2745 x 12 months = $32,940
5 mini x $449 /month* = $2245 x 12 months = $26,940
Total FY'12 and after = $59,880
4
with the Dubuque market, he has not had any of the existing clients commit to
bus wrap advertising.
7. We discussed with Tom Houck that the cost for the bus wrap advertising is too
expensive for our smaller market and that the package he is offering is tailored
for larger metro areas that can withstand the higher bus wrap costs and monthly
fees. Our team did not see this fitting the Dubuque market. Houck agreed. We
asked if we could come up with a hybrid situation to reduce costs to the
advertisers and to reflect the smaller advertising market. Tom said he would
consider working with us on a modified version of his sales plan.
RECOMMENDATION
Neither proposal reflects the size of the Dubuque advertising market. We recommend
rejecting both bus wrap proposals as presented. The FY'11 budget had $75,000
budgeted for bus wrap income. As brought to your attention earlier, this amount is
unrealistic based on the market and extremely ambitious. Tom Houck is willing to
continue to work with the City on selling the existing advertising until we develop a
hybrid plan with him or move forward with a local in -house plan using local vendors and
keeping the project local. I would recommend we implement the local plan immediately
as follows:
1. Mission Creative has agreed to mention the bus wraps /decals to their clients as a
resource for advertising and then refer those interested clients to ECIA. ECIA
would not actively sell the bus wrap advertising door to door as Houck
advertising does, but we would utilize local resources for promoting the bus
wraps /decals such as Buyer Supplier Connection program, business events
sponsored by the Chamber, etc.
2. ECIA staff has the capability to design the bus wrap /decals advertisements in-
house and /or work with Mission Creative in the designs, and then use a local
company to produce the bus wrap. In this case, the wrap would not be a printer
full wrap but a partial cut vinyl wrap similar to what you see on the RTA
minibuses. See the attached sample of what is used on the RTA buses. No more
than 50% of the bus would have decal advertising.
3. ECIA staff developed a fee scale more reflective of our local market and we
would use that fee scale for both the City services and the RTA. See attached fee
scale.
4. Work from the existing billboard contracts and hold a focus group lunch meeting
with the advertisers to discuss the bus wrap advertising and test the market for
the pricing structure and to get feedback on the local market demand.
3
ACTION
We recommend the City Council rejecting the bus wrap bids and selecting the local plan
as outlined above and discontinuing the current Houck advertising contract after we
have met with the local advertisers and held the focus group discussion on the desire to
move to bus wrap /decal advertising.
5
Inside Bus Non profit /Public Service: FREE Notes: Both sides of a bus for decals. In case damage ocurrs to decal(s in the event of an accident or other incident, replacement
costs will be covered by insurance. Rates are as of June 2010 and are subject to change.
Type
Production
Design
$500
1 6 Month Contract
12 Month Contract
Total Campaign:
Cost
Price per
month ,
$749
} Total cost
of contract
$4,494
Price per 1
month
$549
Total cost
^ _ . _ of contract
$6,588
6 mo
$6,494
12 mo
$8,588
Big Bus
Both Sid.s
sx
-
__ __
$1,500
d
QC
Big B.,
Back
a - - - - '
$500
$250
$539
$3,234
$339
$4,068
$3,984
$4,818
CNIE
W
0
Q Bo
tmn
hIS Bus
. �"•+�° z ? '�
$1,200
$500
$649
$3,894
$449
$5,388
$5,594
$7,088
Small Bus
Bock
.s
� 1
007
$300
$250
$439
$2,634
$239
$2,868
$3,323
$3,418
Inside Bus (for profit rates)
$100
$100
$50
$300
$25
$300
$450
$500
Inside Bus Non profit /Public Service: FREE Notes: Both sides of a bus for decals. In case damage ocurrs to decal(s in the event of an accident or other incident, replacement
costs will be covered by insurance. Rates are as of June 2010 and are subject to change.
•