Taxi Advertising: How to improve profitability and effectiveness through Digital Signage

As seen in a previous article, advertising agencies have the difficult task of creating messages which are relevant to the viewer and finding the right place to display them.
We discovered that a Digital Signage solution offering targeted and relevant content makes it possible to improve the potential of an advertising message.

This post will take a look at taxi advertising and illustrate how Digital Signage can significantly improve profitability and simplify the work of advertising agencies.

Taxi advertising limitations

At present, taxi advertising has many limits:

  • Paper advertising, in the form of a single leaflet on the headrest, allows to display only one message.
    The displayed message will be relevant and effective in very few cases.
  • Updating leaflets entails significant logistic and economic commitment: printing, distribution, manual insertion in the headrest, removing the previous advert, etc.
  • The points above make short-term or last-minute marketing campaigns impossible.
  • The static nature of paper support makes it impossible to show multiple advertising messages. This has a significant impact on the possibility of generating turnover.
  • There is no way of knowing how many people view the ad.
  • The pricing model is based on rigid criteria and lump-sum payments.

Taxi Advertising DIgital Signage

Potentials of Digital Signage solutions

Shifting to a Digital Signage-based solution opens many interesting doors for operators in the field who can:

  1. Update ads in real time, with just one click.
  2. Easily select single taxis or groups of taxis on which to show the commercials.
  3. Choose the duration of the campaigns, thus meeting the end clients’ requirements.
  4. Create dynamic advertising schedules which vary according to the time, geographical position of the taxi, weather conditions, gender and age of the viewer (with an optional Face Detection integration).
  5. Have certified proof of play according to the POPAI guidelines, with a detailed report of the broadcasting of the ads.
  6. The possibility of offering different pricing models: fixed prices, consumption-based, time-based prices or a combination of the three.
  7. Integration with third party provisioning and payment solutions.

Dynamic, customisable, measurable

Lt’s take a deeper look into the first 5 bullets of the list:

  1. Update ads in real time, with just one click
    Let’s imagine that an agency has a contract with 100 taxis and that it is asked to distribute an ad on the taxis’ headrests.
    In short, this is what will happen: the graphic file will be received, printed, packaged and shipped to the main taxi station, and then the leaflets will be manually fitted.
    At the end of the campaign, the old ad will have to be removed, and then the procedure repeated again, etc. This makes it impossible to program any campaign in a short amount of time.
    Thanks to the Digital Signage solution, all you’ll need to do is place the file in the advertising programming schedule, define the parameters, click Enter and hey presto!
  2. Easy selection of individual taxis or groups of taxis on which to show the ads
    The agencies who manage advertising on taxis generally have a network which is limited to one or more cities.
    The client is forced to purchase all the slots or none, because organising a campaign for a small part of the fleet becomes too onerous.
    This makes taxi advertising inaccessible to many companies from the offset and constitutes a big obstacle for people who want to make a small investment.
    With a Digital Signage solution, it is possible to sell slots on single taxis or groups of taxis, adapting the costs to the actual needs and features of the client, thus communicating both with local financial and national operators
  3. Choose the duration of the campaigns, thus meeting the end clients’ requirements
    As we have already seen, a marketing campaign on a paper support entails significant logistic and financial burdens.
    These costs make programming a short-term ad campaign rather inconvenient.
    However, in many cases, companies require an ad for a short period of time, sometimes even just a day.
    Think about events, special offers…
    With a platform that allows you to program ad slots with maximum flexibility, it is possible to create any solution you may need in order to tap into new market segments.
    In practical terms, you can program an ad campaign on a taxi the same way it is done with Google Adwords
  4. Create dynamic schedules based on hours of the day, geographical position of the taxi, weather conditions, gender and age of the viewer (with the optional Face Detection module)
    In a previous post, we analysed the importance of dynamic proximity marketing. In the case of taxi advertising, there are many appealing possibilities for advertising agencies:
    • The ads can be programmed for specific time slots.
    • Geographical parameters can be set, so certain ads will be showed only if the taxi is circulating in a specific geographical area, retrieved by the GPS device.
    • Parameters can also be connected to the weather: the ads of a refreshing drink will be relevant if the temperature outside is warm, rather than cold. Furthermore, different options can be set for the same product or company which are displayed automatically according to the weather conditions.
    • If the solution includes Face Detection, it will be possible to automatically select ads according to the gender and age of the viewer.  This tool is extremely useful in order not to waste advertisements and reach the highest relevance-per-target ratio.
      Let’s think of a young lady in her 20s: how relevant will she find an ad about a 0-30 W lubricant with magnetic particles to protect turbo-diesel common-rail engines? Or a man in his 50s subjected to yet another ad about mascaras which increase the length of your lashes by 25% for a deeper and more sensual gaze…
  5. Have certified proof of play according to the POPAI guidelines, with a detailed report of the broadcasting of the ads
    With paper advertising, there is no way to verify whether the ad has been displayed or seen by potential clients. In the case of Digital Signage solutions, we’ll have a detailed report of the showcasing of the ads, for which it will be possible to implement a “pay per impression” sales model and a “pay per view” which are very appealing to clients.

Up to now, Digital Signage solutions for taxis (or buses) have been based solely on PC architecture.

This has entailed substantial initial investments which have dissuaded people from moving from paper to digital ads.

Pricing models and integrated payment solutions

What options can an agency offer to advertisers? Let’s continue to review our bullet list:

  1. Several pricing models: fixed prices, consumption-based, time-based prices or a combination of the three
    At present, advertising agencies offering taxi advertising through paper support can only offer a lump-sum pricing model in which the variable factors are only the number of taxis and duration of the campaign. On the one hand, this makes the offer quite inflexible and on the other it constitutes a barrier for those who want to purchase advertising slots on taxis.  A Digital Signage-based solution allows you to completely revolutionise the business model and set different pricing models:
    • Fixed pricing for the period: the client pays a certain number of slots for a fixed period of time.
    • Consumption-based: the client purchases a set number of slots which are consumed according to a “pay-per-view” criteria. This model, to which Google Ads owes its success, allows a higher profitability compared to lump-sum pricing, because the client is certain that his message has been seen by the taxi passenger. The profitability for agencies is further maximised because the system automatically manages and optimises the programming of slots with a higher cost-per-view and total revenue.  The advertiser can check the budget and obtain the maximum conversion rate.
    • Time-based: the client decides when the ad should be displayed. Thanks to the ad management platform, the period can vary from one day to as many days required. It is also possible to set the times in which an ad should be displayed
    • Other parameters: the agency can combine these pricing models and other parameters, such as weather conditions, gender and the age of the viewer. In this case, there are infinite combinations and potentially very effective ones.
      For example, an advertiser can purchase a thousand views to show the ad of an ice-lolly or a refreshing drink which will be displayed only if the temperature outside is above 30°C.
      A nightclub can purchase a permanent campaign and pay-per- views based on consumption (pay-per-impression) and the ad can be programmed to be displayed only after 22:30 and if the viewer is a man.
      A make-up manufacturer can choose for an anti-aging cream ad to be displayed only if the passenger is a woman above the age of 30, while if the passenger is a man, to show an ad for a Q10 aftershave.
  2. Integrations with external provisioning and payment solutions: Digital Signage is an open solution which can operate with external tools and enables the integration of existing and future provisioning and payment systems. This makes the Digital Signage solution even more personalised and offers a complete service.
    In a not-so-futuristic scenario: the client is welcomed by name, his demographic information is gathered when he orders his taxi, the system knows the route to follow in advance and can send geo-localised advertising messages, news and tips, according to his destination.
    The client will also be able to use the display to pay via credit card (through an optional module) or through the QR code, with one of the many smartphone platforms.

A truly killer application

In conclusion, we can state that taxi advertising should veer towards a model based on interactive, dynamic and measurable Digital Signage, a truly killer application available on the advertising market which promises excellent returns on investment, both for agencies and independent advertisers.

The only thing preventing this business model from gaining momentum is its complex and expensive installation cost based on Windows, which requires very invasive modifications to the vehicle.

Thanks to the new Android-based solutions, investment on hardware can be reduced by 80%, the installation can be done easily and quickly on any taxi with little or no modification required for installation.

This would allow the Digital Signage solution for taxis to be immediately competitive and profitable, generating excellent return for advertising agencies and independent advertisers alike.

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3 responses to “Taxi Advertising: How to improve profitability and effectiveness through Digital Signage

  1. Interesting article, but screens on the inside of a taxi are still a narrowcast proposition with limited audience reach. It is also quite invasive in a private environment; it has had limited success in London taxis. I agree with the use of realtime activation triggers and whilst relevancy is of course key to advertisers, it cannot be achieved without audience reach. Despite being a little biased, we think the effectiveness and future of digital in taxis is more powerful on the outside….specifically on the roof!! TaxiCast is the only product truly delivering this level of relevancy and reach.

  2. Many thanks for your insight! Inside the taxi you reach one or two person at a time, but if the messages are really relevant, you have very high chances to reach the target. Replicating the inside logic on the outside would be the maximum. We are waiting for flexible screens that can be wrapped around the car. Greetings from Minority Report :-)

  3. It depends what one is after:
    1. on one side you have massive audience, with very little relevant content;
    2. on the other side you have selected audience, with high relevant content.

    Maybe a combined solution would the optimal solution. Some kinds of messages can be relevant to a very large audience, and you will put in the external part of the taxi; Other kinds of messages can be linked to a specific call to action on a customised approach, this can go inside.

    At least, as long as we can’t make the whole car exterior as a digital display :)

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