Forschungs- & Entwicklungsinformationsdienst der Gemeinschaft - CORDIS

Business model I: Infotainment system in public transport systems I

- Expected ad perception: affinity;
- Local system operator-centric;
- Local system operator is operator of public transport systems;
- Retailers are stores along a route;
- Content is very important;
- User owner: local system operator;
- Incentives for the user: information and entertainment;
- Source of payment: retailer;
- Target group: passengers;
- Revenue stream: retailer - local system operator - content supplier;
- Typical application: infotainment system in public transport systems;
- Advertisement approach at a perfect situation (time and space).

This scenario is applicable to the operator of a public transport system as the local system operator of LBA. A retailer is typically a store along a transport route whose advertisement is shown whenever the metro or the tram reaches its vicinity, giving the passenger the chance to get off at the next station.

Being the centre of this model the public transport system offers retailers the possibility to do LBA within what is called an infotainment system, i.e. a system that does not solely display advertisement but also usable and interesting information to the passenger (e.g. news, upcoming events). In order to establish such a system, high quality content is required, and therefore purchased by the local system operator. As a decisive link, the content supplier participates in the persistent revenue flow. The operator also has to purchase monitors to display the advertisement, applications to run on the displays, and a middleware to match the commercial content to the transport network. Sometimes the required monitors do not have to be purchased solely for the purpose of LBA but are built in already. In some cases an advertising agency might be involved as well, either employed by the local system operator or, more likely, directly by the retailer. Advertising agencies are basically traditional advertisement firms who primarily do the creative work. They are not necessarily an essential part of this model in respect to its location-based nature.

This kind of LBA approach is expected to reach a high acceptance status by the passengers based on the fact that it is perceived as an information channel rather than an advertisement channel. It is considered as an expansion of service offered by the public transport system. It is very effective in terms of delivering ads within a time frame in which the passenger is bored and pleased to be entertained. Besides that, public transport systems, like trams, are usually passing urban areas with a high density of stores, such as the city centre. It can be assumed that a high stake of the people that take the tram to the city centre is about to go for shopping. Thus, LBA is exposed to them at a time when they are most likely to consume and spend money anyway.

Although this scenario is a typical transport system scenario, it can also apply to fixed wide screens, which are mostly implemented at crowded spots in big cities, e.g. the Time Square in New York or Causeway Bay in Hong Kong. These screens can show commercials of proximate stores. Their location sensitivity, however, only refers to a very limited area, and thus their attractiveness based on the small number of possible advertisers is very low. In this case LBA is associated with its definition in the wider sense.

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