Page 1 Transport Advertising in Hong Kong MTR Dr. Stella Kwan Senior Manager – Media Business MTR Corporation Limited 4 December 2008
Page 2 Content Part I – MTR Advertising Business Strategy Key Success Factors Limitations Forthcoming Challenges Strategies for Tomorrow -Trend -Digitalization Positioning Business Objectives Performance Formats Business Model - Main & Digital Product - AEL MMS
Page 3 Part II – Brand Marketing & Patronage Promotion through the medium Brand Marketing Patronage Promotion Content
Page 4 Hong Kong Area = 1,100 Km 2 Population = 7 million GDP = US$30,000 per capita A densely populated city Hong Kong
Page 5 Map of Hong Kong
Page 6 MTR System Network MTR (Kwun Tong, Tsuen Wan, Island, Tung Chung, Tseung Kwan O, Disneyland Resort, East Rail, Ma On Shan and West Rail Lines) Airport Express Light Rail Total route length:168.1km35.2km36.2km Total number of stations:80568 Number of train cars:1, Daily operation hours:19 Average number of passengers*: (in thousands) 3,441 (weekday) 28.7 (daily) 374 (weekday) * Source: MTR 2008 Interim Report
Page 7 MTR System Map
Page 8 1.The above non-fare revenue includes advertising, station retail and telecom businesses. 2.Non-fare business also improves customer satisfaction. Trend of Non-Fare Revenue (2001 – 2008 June) Source : 2001 – 2007 figures from annual reports. Merger on 2 Dec 2007
Page 9 Business Objectives Generate non-fare revenues Enhance passenger experience in their journeys Promote corporate image and branding Support passenger communication
Page 10 Trend of Advertising Revenue (1998 – 2008)
Page 11 Market Share Out-of-Home Advertising (2008 1H) Source: Estimate from JCDecaux Pearl and Dean + Industry Statistics Note: Neon, airport and AEL not included.
Page 12 Positioning MTR Advertising being the no.1 out-of-home medium in Hong Kong that offers the most creative flexibility reaching the most captive audience.
Page 13 Traditional Formats New Formats Digital Formats MTR Media Business
Page 14 Back-lit panels Traditional Formats
Page 15 Escalator Panels Traditional Formats
Page 16 Station walls Pillars Escalators Staircases Feature Ad New Formats
Page 17 6-sheet Scrolling Units Zone New Formats
Page 18 Bunting & Platform Screen Doors New Formats
Page 19 3D Arch + Zone Dominance + Audio New Formats
Page 20 Train Advertising New Formats
Page 21 Train Advertising (AEL) New Formats
Page 22 Station Exterior New Formats
Page 23 External Billboards New Formats
Page 24 Digital Escalator Crown Panels Digital Formats 32” LCD panel in key locations to allow high visual quality and enhance flexibility with domination impact Asia’s First Digital Escalator Crown Bank in the metro system
Page 25
Page 26 Digital Formats Digital Poster Launch in Q ” LCD panels packed in pairs for substantial network exposure and high visibility
Page 27
Page 28 Plasma Ring with Interactive Zone Digital Formats
Page 29 Concourse Plasma Digital Formats
Page 30 Trackside Plasma Digital Formats
Page 31 Newsline Express Digital Formats World’s First innovative in- train infotainment system Quasi real-time news updates Added-value service to passengers New source of advertising revenue
Page 32 High Speed Link Media Centre WiFi Network Content Provider System Overview
Page 33 Bloomberg Real-time Display Digital Formats
Page 34 Real-time Projection Zone Digital Formats
Page 35 Passengers Involvement Free news, infotainment, train services messages Shopping Guide Map Interactive Panel Info Panel Digital Formats
Page 36 Digital Formats iCentre eInstant Bonus Terminals MTR Club members registration and bonus Net money business Plasma TV advertising iCentre Free Internet Service eIB
Page 37 Airport Express In-train LCD Digital Formats Public LCD for operational information broadcast, infotainment and advertising Loudspeakers with individual volume control button at headrests
Page 38 Business Models
Page 39 Business Models MTR : Media owner - Product development and investment -Maintenance and enhancement - Inventory rationalization - Brand marketing Advertising Agents : Sales and marketing of advertising spaces Day-to-day operations Inventory management Revenue Commitment
Page 40 Business Models Revenue Sharing Model -For on-going partnership with proven track record -Ability to attract good sales agents 2.Minimum Guaranteed Fee Model - For revenue protection to MTR - For new agents 3.Combined Model - Revenue-sharing with bonus and penalty scheme
Page 41 Business Models 4.BOT model -With Minimum Guaranteed Fee - With limited number of vendors for unique technology and proven expertise -Role of MTR monitor the performance of system and the concessionaire -Role of Operator design, produce, operate and maintain the system content management sales and marketing of advertising airtime day-to-day operations
Page 42 New product development Advertising facilities –Design –Build –Maintenance –Enhancement –Rationalization –Additional/removal General cleaning Station renovation Operations Overview – Roles and Responsibilities of MTR & Advertising Agencies New product development Sales management Posting & De-posting –Commercial bookings –MTR’s own promotion –MTR’s barter –Fillers Screening and sensoring of Ads Cleaning of panels Tidiness –Regular checking Replacement –Clears, opal sheet, fluorescent rubes Safety MTR Advertising Agent
Page 43 Performance Management SALES Revenue Commitment –Bonus and Penalty ; or –Minimum Guaranteed Payment Pricing Sales Packages MARKETING Spending Commitment Types and No. of Marketing Campaigns MTR Brand Awareness The Best of the Best Awards Ceremony Ad Track Customer Satisfaction Survey Reach and Frequency Study
Page 44 “The Best of the Best Awards” Ceremony 2007
Page 45 “The Best of the Best Awards” Ceremony 2007
Page 46 “The Best of the Best Awards” Ceremony 2007
Page 47 Performance Management OPERATIONS for traditional formats Display Accuracy Occupancy Rates Clear/Opal Replacement Cleaning Frequency Checking Frequency Accidents Frequency Safety Audit Training OPERATIONS for digital formats Content Provision and Quality Airtime management: Commercial vs Operations needs Audio level Screen performance
Page 48 Key Success Factors Consistent and premium positioning Unique platform for advertising creativity Agency partnership and incentives Continuous products revamp and development Fast response to market changes and demand Specific and measurable performance
Page 49 Limited street-level exposure Statutory constraints Internal restrictions Relatively long production lead time Relatively high implementation costs Limitations
Page 50 Mobile marketing and internet advertising all competing for passengers’ time Intervention from Government body Increasing pressure from pressure groups Take time to educate advertisers on new products development and process Forthcoming Challenges
Page 51 1.Increase Digitalization -Impact & creative for target/niche market Future Trend Strategic Intent Passengers be able to watch, interact & enjoy with different creative & animated advertisements during MTR journeys Advertisers be able to do targeted advertising with strong impact & creative flexibility Trends Digitization Digitizing MTR Advertising Generate higher yield from advertising space Project a modern & forward-looking corporate image to passengers Meet passengers’ increasing demand for creative & animated advertisements Enable advertisers to cost-effectively target their customer segments Strengthen MTR’s leading position in OOH advertising market
Page 52 2.Retain Traditional Formats -Reach & Frequency -Lower CAPEX and OPEX -Easier to find suitable locations Future Trend (Cont’d)
Page 53 Brand Marketing and Patronage Promotion through MTR Advertising
Page 54 Brand Marketing Brand Building, Corporate Promotion, Customer Care, Passenger Behavior, Safety Patronage Promotion Privilege Offer, Customer Loyalty An effective means to reach targeted passengers. Effective Use of Other Media Print and Advertorial TV Commercial On-Line Marketing Advertising in MTR
Page 55 Customer Care Brand Marketing To promote MTR are serving passengers with “joy and care” Campaign advertisement put in the system got high awareness amongst other activities according to survey. Customer Service Campaign
Page 56 Customer Service Campaign
Page 57 MTR HODEE Campaign Encourage good behaviour of passengers Passenger Behaviour
Page 58 Privilege offer Patronage Promotion Bundle sale of MTR tickets with Wetland Park entry tickets Achieved good result within a short period after launching Joint Promotion with Wetland Park
Page 59 MTR Club Bonus Point Scheme Customer Loyalty Earn bonus points through taking ride of MTR for privilege
Page 60 MTR Club “Love our Site” campaign Customer Loyalty Invite passengers’ participation in redesign of Corporate website
Page 61 Thank you
Page 62 BACK-UP
Page 63 System Overview