Transit has several sources of revenue. One of course is the farebox. Another is advertising. While this is relatively small, it could grow. A TRB funded study (TCRP 133) makes a number of recommendations to increase this share of revenue. Just as much content on the internet, in newspapers, and in magazines is subsidized by advertising, some transportation service is subsidized by advertising as well, and more could be. This phenomenon of advertising supported services is encapsulated in the famous recent quote “If you’re not paying for it, you are the product.”
Transit advertising comprises several major components. One I will call “internal” (the industry must have a term of art for this, but I don’t see it) inside the vehicle or station, aimed at customers, the other (“external”) is on the vehicle or outside at bus stops, bus benches, etc. aimed mostly at non-customers.
Historically, internal advertising has been static. With smart-payment cards, we now know who is on the vehicle or in station, and with RFID tags we could even know where they are sitting. Advertising could be customized.
Department store magnate John Wanamaker is reputed to have said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” But now, just as with the internet, advertising could be customized. Electronic screens instead of cardboard can provide dynamic advertising customized to both the transit user and the location of the vehicle. It should be more effective. It might be more profitable (if the ability to sell advertising outweighs the extra costs). Both captive and choice riders are the classic “captive” audience, they can turn their heads, but can’t really escape.
Users should appreciate this because it can (1) be more useful [i.e. advertising is not inherently bad, it might inform you of a product you actually would want but were unaware of, or of a discount on the product], and (2) the extra revenue from the advertising can keep fares down.
There are other, less innovative, but still possibly lucrative sources of funds. Station naming rights are generally a bad idea from a wayfinding perspective, but station sponsorships (such as Apple in Chicago) may help.