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Landing ad revenue: Airport charged up over sponsorship of electrical outlets

January 30, 2006

Advertisements for mutual funds, watches and kolaches.

Now as you wait at the gate for your flight, you'll even see ads on electrical outlets.

The Indianapolis Airport Authority on Jan. 20 was expected to approve a $65,000 marketing partnership with Chase in what is the latest and certainly the most electrifying of all advertising schemes at Indianapolis International Airport.

These are desperate times for marketers. Too many ads are getting lost in the shuffle. And barraged consumers have figured out ways to avoid television ads, what with TiVo and other devices that zap commercials.

"The old, interruptive model of advertising is not enough anymore. There are advertisements on almost everything, everywhere," said Ben Carlson, an executive at Bradley and Montgomery Advertising in Indianapolis who helped develop the airport ads for Chase's commercial banking unit.

"We wanted to break through the clutter of advertising in Indianapolis," said Jill Hill, a marketing manager for Chase commercial banking. New York-based JP Morgan Chase recently acquired Chicago-based Bank One, which had the largest banking market share in Indiana.

Chase already advertises in business publications to reach executives. But, Carlson said, "Non-traditional media is where a lot of the exciting part of advertising is right now."

But electrical outlets?

"Initially, I went, 'What?'" said Mary Ann Falatic, retail director for BAA Indianapolis, the private firm that runs the airport for the Authority. Understand that this BAA executive's mind perpetually hums like a tuning fork for ever-more revenue opportunities.

But there's genius in this, insists Carlson. Those outlets are already used by lots of business travelers to recharge their iPods, laptops, wireless phones and other gadgets. So what better place for Chase to target business prospects who might even log on to its Web site while they're waiting for flights?

"We realized the airport was a place where a lot of business-to-business decision makers clustered. You have men and women with expensive suits, sitting cross-legged on the floor."

Carlson said Bradley and Montgomery is exploring the concept for Chase elsewhere in the United States-perhaps at other airports.

As for the copy surrounding the outlets, the puns are on parade.

"This outlet works. Now you can, too," says one. "We empower business right down to the batteries," says another.

The cost of electricity used by passengers to charge electrical devices is negligible, said airport spokesman Terry Burns. And they're going to do it, anyway.

Other schemes are in the works. Many of the airport's flight monitors will soon be surrounded by Chase ads.

"We hope it's the first of many things, not only with Chase, but with other business partners," Falatic said.

She declined to elaborate, nor would she speculate about what advertising approaches might be carried over to the new midfield terminal set to open in 2008. "We've not addressed any specifics of our advertising program at midfield," said John Kish, manager of the $1 billion project.

Penciled-in for the midfield's round "civic plaza" are plans for a curved wall above ticket counters that could display video images. Using the panels for advertising did come up in discussions, but "we've not revisited that yet," Kish added.

The midfield terminal will open with about 40 gates, compared with 33 in today's terminal. The larger space likely will afford more opportunities to boost advertising revenue.

BAA rakes in for the Airport Authority about $500,000 a year from advertising, according to Falatic. Also included in that amount is a cut of advertising managed by two other firms: JCDecaux and Clear Channel, which sell ads in the parking garage, ground transportation center, the lower level of the terminal and along terminal access roads.

The advertising revenue collected by BAA is not insignificant considering total concession revenue, including that paid by retail and food/beverage vendors, was $4.8 million in 2004-the most recent year available.

BAA has steadily grown that number from $2.2 million in the mid-1990s when it landed its airport management contract.

"The more non-airline revenue we can generate, the more we can control costs to the airlines," Falatic added. Airport officials said it was difficult to boil down how much that advertising actually reduces rents and fees paid by airlines. Carriers are already facing steeper costs to help pay for the midfield terminal now under construction.

So where does this all end-airport toilet seats sponsored by, say, Dulcolax?

Why not let sports teams buy naming rights to an airport?

"You know, it's been kicked around in the past," said Don Hinchey, an executive of The Bonham Group, an Englewood, Colo.-based sports and entertainment marketing firm. It negotiated a number of stadium-naming deals, including PNC Bank's sponsorship of the Pittsburgh Pirates' baseball stadium.

Corporate America already sponsors amphitheaters and college buildings-how about a meeting facility at a major U.S. airport? Not inconceivable, Hinchey said. Boston is already talking about finding sponsors for its rapid transit stations, after all.

Cities "are really beginning to explore the possibilities ... . Municipalities all across the country are pinched for revenue."
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