Advertising Request for Proposals. Recommendation to Award September 19, 2016

Transcription

1 Advertising Request for Proposals Recommendation to Award September 19, 2016

2 Advertising RFP: Original Goals Revenue Growth Improved Customer Experience Rapid Digital Build-out 6x expansion of digital panels (from current 90 to 640+) $25-$35 million in gross digital revenue projected by FY20 2

3 Advertising RFP: Bidders Who they are Sample clients Intersection, LLC Large national firm Incumbent vendor (formerly Titan Outdoor); now a division of Alphabet CTA, NYC MTA (partial) Outfront Media, Inc. National firm (formerly CBS Outdoor); large, publicly-traded company LACMTA, WMATA, NYC MTA (partial) Direct Media, Inc. Regional firm; previously held MBTA business Providence, Baltimore, Charlotte 3

4 Advertising RFP: Process: Best Value Procurement Evaluation Committee & Advisors Five members from Marketing, Design and Construction, Finance, OPMI, and Real Estate Advisors: CPO, Director of Revenue, Industry Consultants Initial Review of Proposals Proposals received and oral presentations completed in July. Committee elected to shortlist Outfront and Intersection based on their responses and reference checks. Clarifying Questions Best and Final Offer Committee sent two rounds of clarifying questions to respondents in August and September, including supplemental interview round. Committee finalized technical scoring on September 8. Best and Final Offers (for financial proposal) were requested, and Respondents submitted by Tuesday, September 13. Financial review conducted under consistent assumptions around revenue. Scoring + Decision Completed Wednesday, September 14. 4

5 Advertising RFP: Outfront Media, Inc. Strong Financial Position $2.91 billion market capitalization; $1.5 billion in revenues in calendar year 2015 Strong Technical Expertise Successful digital installations in New York, Washington, and Los Angeles Partnerships with blue-chip technology providers and engineering support Strong Local Presence Already holds part of MBTA billboard contract and employs local sales staff 5

6 Advertising RFP: A Transformational Contract for the MBTA 63% 70% FY16 Revenue Share New Contract Revenue Share According to a leading transit consultant, the MBTA is receiving one of the highest known advertising revenue shares of any peer US transit agency, while paying no capital costs to build a state-of-the-art digital display system of 700 screens. 6

7 Advertising RFP: Revenue Impact on Existing Inventory Under Current Contract FY16 Under New Contract Under Current Contract FY17 Under New Contract Net Billings $31.1 million $31.1 million $32.6 million $32.6 million MBTA % Share 63% 70% 65% 70% Net Revenue to MBTA Difference $19.6 million $21.8 million $21.1 million $22.8 million +10% (+$3.9 million) 7

8 Advertising RFP: Projected Net Revenue to MBTA with New Contract: Projected 81% Total Growth Comparing FY16 with FY21 8

9 Advertising RFP: Rollout Plan 1. Dedicated Project Manager on MBTA side Previous digital rollout efforts slowed by internal barriers Outfront s proposal will fund two FTEs on the MBTA side to speed placement progress 2. AECOM serving as Implementation Consultant Knows MBTA system well; frequent partner with D&C Engineering support to ensure rapid placement 3. Proposed Approach to Panel Placement Begin to identify which sites go in which batches, and when Plan placement in rolling batches of panels Identify locations and do site prep Complete placement of one batch, while concurrently scoping work for another batch 9

10 Advertising RFP: Contract Terms Five-year initial term, with two five-year extensions at the MBTA s discretion Revenue share of 70% to MBTA Commitment to place 700 new digital displays at Outfront s expense, including two FTE headcount on MBTA side to facilitate Full integration with MBTA software and content management system Full audit access and detailed reporting requirements Full compliance with MBTA s standard terms and conditions 10

11 Advertising RFP: Staff Recommendation to the FMCB Award of a new Systemwide Advertising Concession; Contract No. FC686 in November 2016, with Outfront Media Inc. of New York, NY, for a duration of five years, with two subsequent five-year options to extend at the MBTA s discretion. 11