Sun, Jun 03, 2018 - Page 15 News List

Start-ups colonize New York subway

By Gerrit De Vynck  /  Bloomberg

You have seen them if you have been to New York recently or are one of the city’s harried commuters. Bright, colorful, funny, cheeky ads for start-ups selling everything from insurance to mattresses, plastered in every subway car and station.

The New York City Subway had long been known for ads hawking questionable services from plastic surgeons and personal-injury lawyers. Then, young, well-funded companies, such as Casper Co and Seamless realized that even in the age of Facebook Inc and Google, subway ads are a cost-effective way to grab attention.

In a testament to the growing power of the city’s start-up scene, these upstarts have helped push up the price of certain subway campaigns sevenfold in the past five years and chased away many of the surgeons and lawyers.

“It’s become a rite of passage for start-ups and tech companies in New York,” said Jennifer Fitzgerald, chief executive officer of PolicyGenius Inc, an insurance-comparison start-up. “You’ve made it when you’ve got your subway ads.”

In a recent four-week campaign, PolicyGenius spent about US$250,000 to buy a “brand train,” which involves covering with ads half of the inside of about 550 randomly selected subway cars, or about 9 percent of the total fleet.

Five years ago, the home services platform Handy paid less than US$50,000 for the same thing, chief executive officer Oisin Hanrahan said.

John Laramie, who runs the tech-focused marketing agency Project X, said brand trains are almost sold out for the rest of the year and are now going for US$345,000.

Outfront Media Inc, which sells ads on behalf of the subway system, declined to comment on pricing, but said it launched campaigns with 100 venture-backed companies last month, 30 percent more than it did in 2016.

Not all of the space has been gobbled up by local start-ups, of course; big established brands, including Google’s YouTube and Twitter Inc, have taken over trains and stations, too. Late last month, Spotify Technology SA ads blanketed Union Square station in Manhattan.

The rising cost of subway marketing is crowding out long-time advertisers. One is Manhattan Mini Storage, famous locally for sassy ads featuring such quips as: “Why leave a city that has six professional sports teams, and also the Mets?”

“We’ve had a great run with the subway part of our campaign and I think we would continue to consider it, but price is always a factor, you want to get the best reach for the best value,” said Jason Morros, who runs marketing for Manhattan Mini’s parent, Edison Properties. “To have an impact you really have to have those big buys that these start-ups have been doing.”

After years of false starts, New York’s tech scene is growing up. Venture capital investment is ballooning, tech giants, such as Google, are adding thousands of jobs in the city, and former bankers, advertisers and retail executives are lining up to disrupt their former industries.

These consumer-focused companies use New York’s population of 8.5 million as a testing ground for new products and ideas, from electronic toothbrush subscriptions to food delivery services.

The subway is ground zero for many of them.

Not so long ago, new brands were deeply skeptical of advertising on the trains; they thought long and hard before putting an ad next to controversial campaigns, such as one for breast augmentation that ran a couple of years ago.

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