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SR 08-23-2011 3L~;tYO, Clt~/ C®Ui1(:~' R@pOrt Santa Konica City Council Meeting: August 23, 2011 Agenda Item: 3'°L- To; Mayor and City Council From: Fred Gilliam, Acting Director of Transit Services Subject: Promotional Campaign Services Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a contract with Trailer Park, aCalifornia-based company, for promotional campaign development and production. The contract would be for two years in the amount of $116,000 for FY 2011-12, and then $55,000 for FY 2012-13 for a combined total of $171,000. Terms would include an option for FY 2013-14 in the amount of $55,000, which if exercised would result in a total contract amount of $226,000. Executive Summary Over the next few years the Big Blue Bus will modify service to accommodate Expo Phase I in Culver City, and launch several new programs designed to improve the rider experience and increase ridership and/or revenues. The Big Blue Bus is seeking to contract with a creative agency that has proven results-oriented promotional campaign experience. While BBB contracts with more than one creative agency at a time for promotional services like graphic design, this firm would be used when there is a need to produce comprehensive promotional campaigns involving multiple media tools, all with a similar theme. These services include a range of target market research, metric development; delivery method and/or graphic design services that exceed current Big Blue Bus staffing levels. The maximum contract expenditure if the option year is exercised would be $226,000. Background The Big Blue Bus (BBB) operates as an enterprise fund department, and must generate revenue to fund its operations apart from the City's General Fund. In addition to revenue generated from fareboxes, BBB also generates funds via grants, sales of ads on its buses and by increasing ridership, which results in more farebox revenue. The Big Blue 1 Bus is also working diligently to meet the goals of the Land Use and Circulation Element (LUCE) to achieve "no net new trips" by encouraging public transit use. One of the methods by which BBB increases ridership/revenues is the execution of promotional campaigns targeting niche markets to increase awareness about BBB services and products. During FY 2011-13, BBB plans to implement some of the most widespread service changes in over a decade, in preparation for interfacing with Expo light rail service and to meet the City's mobility goals outlined in the LUCE. Also planned is the launch of new and unique on-board bus promotional products-such as interior wall ads. Staff recommends contracting with a promotional campaign services firm to ensure all target markets are aware of the changes, which may improve revenue generating opportunities for the BBB. This firm will be used when there is a need to produce a comprehensive marketing campaign consisting of multiple public information and promotional elements with a similar theme. Discussion Strateav BBB's Customer Relations Division is responsible for creating educational, outreach, and promotional campaigns that communicate the benefits of new services and products to 22 million customers and the general population across a 52 square-mile service area, as well as specific target markets to generate increased ridership and passenger revenues. These campaigns occur at least once per fiscal quarter and involve target market research and analysis, metric development, delivery method analysis and/or graphic design services. Contracting promotional services for target market campaigns is a common strategy employed by transit providers of similar sizes and budgets in the California region. While Big Blue Bus staff provides direction and manages coordination of these campaigns, engaging a promotional services firm with capacities to conduct supporting 2 research, and produce the designs of campaigns is recommended to ensure timely and effective campaign launches. For example, in FY 2010-11 when BBB fares were restructured, staff focused on updating fare information on all public information materials. At the same time, a promotional services firm was contracted to develop the messaging, imagery and graphic design of promotional tools to ensure the public understood the changes. The result was a timely promotional campaign that successfully shifted pass sales from single day passes to multi-day passes, and that helped increase pass usage by 13.85% in FY 2011 over FY 2010. Campaigns planned for FY 11-13 The recommended promotional services firm would help execute the following campaigns: • New promotional sales materials: to increase ad sale revenues by promoting several new products now being offered by BBB including the addition of ad space on Culver City buses, full-back promotional ads, and updating sales materials with new 2010 Census demographics. • New service changes: ensure awareness and increase ridership around new routing and schedules to help BBB riders connect with new services such as: Expo Phase I service in Culver City and the planned Rapid 7 extension to the Metro Purple Line. • New customer technologies: to educate customers about new online, telephone-based and on-street services for accessing real-time bus information and trip planning services. • Increase SMC ridership: to educate students about the new swipe-card boarding pass technology and promote ridership benefits among this highly- transitory target market. 3 Examples of deliverables produced will include but not be limited to design and production of exterior bus ads, digital and print .ads, point-of-purchase displays, environmental graphics and outdoor signage. These campaigns are projected to result in approximately $200,000 in increased promotional revenue and help increase annual ridership by an estimated four percent. Contractor/Consultant Selection An RFP was posted to Planet Bids on June 24, 2011. Responses were due on June 30, 2011. Eleven .complete responses were received, including two from the City's pre- qualified vendor list. Bids were evaluated by Big Blue Bus staff on previous experience, work samples, and pricing structure. Trailer Park has successful experience with integrated promotional campaigns and creative use of large-scale environmental design required for the)ob. Financial Impacts & Budget Actions The contract to be awarded to Trailer Park is $171,000 over atwo-year term with a third-year option of $55,000. Total expenditure if the third-year option is exercised would be $226,000. Funds in the amounts of $116,000 for FY 2011-12, and $55,000 for FY 2012-13 have been included in the FY 2011-13 budgets at account number 41643.522544. Future funding in the amount of $55,000 will be requested in the FY 2013-14 budget and will be contingent upon Council approval. All funds used for this purchase come from funding sources specifically dedicated for transit uses.. Prepared by: Linda Gamberg, Marketing & Public Information Coordinator Approved: Forwarded to Council: F d illiam Rod Gould ting Director of Transit Services City Manager 4 Reference Contract No. 9453 (CCS)