Airport hoping to double ad revenue with digital push

September 15, 2008

Indianapolis International Airport officials hope to double advertising revenue, pushing it past $1 million, when the midfield terminal opens in November. That income, officials said, is important because it helps ease pressure on cash-strapped airlines, allowing them to focus on offering more flights.

The airport relies on non-airline revenue, such as food sales and advertising, for about 60 percent of its revenue. Ad revenue now accounts for just shy of 2 percent of non-airline revenue, but officials hope to push it closer to 8 percent, the high end for U.S. airports.

Previously, companies paid to have their messages posted on banner-like ads at various locations around the airport. But the $1.1 billion midfield terminal was designed to allow a variety of digital and interactive displays--including 65-inch wide-screen monitors at luggage conveyors and 10-foot-wide digital kiosks with information on area hotels, restaurants and other attractions. It also will feature a system that pipes advertising messages to travelers' cell phones, as well as sponsored battery-charging stations for laptop computers.

This month, the Indianapolis Airport Authority, which oversees airport operations, signed a 10-year deal with Clear Channel Interspace Airports, a division of Phoenix-based Clear Channel Outdoor Inc., to handle airport advertising sales.

CCIA manages 250 advertising programs at such airports as Chicago O'Hare, Chicago Midway, St. Louis and Kansas City. CCIA officials said some of the digital technology rolled out in Indianapolis is available in only a handful of airports nationwide.

Airport officials chose CCIA because of its experience and ability to bring clients' advertising, marketing and promotional programs together in multiple ways, said Jeremiah Wise, the authority's director of new airport business development.

"We want to maximize revenue, but we want to make sure we don't undermine the aesthetics of the new terminal," Wise said. "The advertising has to complement, not detract from, the facility, and we're confident [CCIA] can do that."

CCIA officials plan to meet with more than 70 prospective advertisers in Indianapolis in the next couple of weeks. Several prospective advertisers contacted by IBJ would not comment because they are still in negotiations.

"The idea is, we're going to blow people away with this new terminal," said Scott Appnel, CCIA project coordinator. "It's early, but so far we're getting very positive feedback."

CCIA projects that it will generate $1.3 million in ad revenue annually at the midfield terminal. Under its contract, CCIA and the airport authority will roughly split the take. Under a program managed by London-based JCDecaux, the current airport terminal generated $450,000 to $800,000 annually in ad revenue. JCDecaux was not among the five bidders for the contract at the new terminal.

Ad pricing at the new terminal will range from $350 per month to $6,000 per month, Appnel said, with most ads priced at $3,000 or below. The low end of the price scale equates to an ad placed over a urinal in a restaurant bathroom, advertising experts said, and the high end corresponds to what some prime billboard space around Indianapolis costs.

Despite the push to bring in more advertising cash, Appnel said CCIA will use a "less is more" approach.

"In years past at airports, it's been sign, sign, sign, just complete bombardment," Appnel said. "We want to make this more of a pleasant experience for travelers. We want to give them information they can truly use. We also want to give it an air of exclusivity for the advertisers. We really want these advertisers to be a who's who of local, regional and national companies."

From the concourse to the bag claim--the most valuable advertising space in an airport--there will be only 12 to 15 sponsor/advertising options, Appnel said.

Advertising experts said new digital signs give airport officials the option to place five advertisements in a location where only one appeared before.

"It's less clutter to the eye in some ways, but the new technology allows them to get more messages in a compact area, and that really drives revenue up," said Bob Gustafson, a Ball State University advertising professor. "It also allows advertisers to really diversify their messages and be more timely."

Because much of the infrastructure for digital advertising is Web-based, Appnel said, ads and messages can be changed quickly from a remote location. CCIA will spend $600,000 to outfit the midfield terminal with the hardware and software required for the advertising program.

There simply wasn't room in the current terminal for much of this digital infrastructure, Wise said, but the new one was built with these elements in mind.

Advertiser demand tends to be strong for airport space, in part because of high visibility. About 10 million people pass through Indianapolis International Airport annually.

"You get a captive audience, and this audience is more upscale and more educated than your average audience," Gustafson said. "And you will get repeat views from business travelers, who are the most common frequent fliers."

Hotels, restaurants, automobile rental agencies and financial institutions are all common airport advertisers. But increasingly, retailers, tourism organizations and tourist destinations also want an airport ad presence.

But not just any campaign works in an airport. Some ad messages can get lost on an increasingly harried traveler.

"Most people in airports are just hurrying to get out of there," said Randy Kron, president of Kron & Associates Advertising Inc., a local ad agency. "The challenge is to have something dynamic that will get noticed. Otherwise, I think an ad could get lost in the hustle and bustle, and you'd have to wonder if a well-placed billboard isn't going to get more eyeballs more often."

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