OOH players respond as LTA looks to consolidate bus ad management under one operator

Last week, The Land Transport Authority (LTA) revealed that it is looking to consolidate the management of advertisements on public buses as well as at terminals and interchanges under a single operator. 

This is expected to boost advertising revenue because of the wider reach the advertising operator will be able to offer and economies of scale, an LTA spokesperson said when MARKETING-INTERACTIVE reached out. 

"Advertising operations for buses, bus terminals and interchanges are currently managed by Public Transport Operators. This tender will consolidate the management of advertising for these assets under a single advertising operator," they added. 

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LTA added that more details will be announced when the tender is awarded in Q1 2025.

When MARKETING-INTERACTIVE spoke to industry players in the OOH space, they said that while the OOH market in Singapore is pretty robust, with media owners and advertisers often demonstrating an appetite for innovation, the move toward consolidation under a single owner will need to be rolled out with a clear value proposition for advertisers.

"At the moment, not much has been revealed about the pricing structures and commercial opportunities," explained Shufen Goh, principal and co-founder of R3 and president of the Association of Advertising and Marketing Singapore (AAMS).

Goh added that the local OOH landscape, much like other markets in the region, comprises media owners across various sizes and capabilities.

"Advertisers here enjoy a good mix of format options to optimise for effective message transmission. Currently, this diversity amongst media owners allows advertisers with smaller OOH budgets to benefit from competitive pricing - through exclusive deals, a media partner might grant them value-add placements and fee waivers," she said, adding that as with any consolidation, concerns will centre around increased prices for the same placements.

Agreeing with her, Anita Yeong, head of investments and commercial at OMG Singapore explained that consolidation allows concentration and focus. It is not a question of who can do this but who can do this well. She added:

A monopoly scenario is not always welcomed as competition is necessary to drive innovation.

Yeong said if the chosen partner is able to provide scale and drive meaningful initiatives to up the ante with regards to providing more robust accountability and creativity at a price, which is benchmarked right and reasonably because of scalability, then it would make a huge difference to the industry.

"In terms of accountability, we hope to see the consolidated partner being able to provide a single source data measurement system for pre-planning strategic development and post-campaign reporting – even if it is just for buses and bus interchanges – as well as allow third party ad verification," added Yeong.

The other key component the industry will be looking out for is the ability to drive more bespoke creative formats that enhance advertisers advertising endeavors, she said. 

Boosting scale

True enough, OOH, by virtue of its presence in the public space, is an industry in which policy has significant influence, according to Kelly Khoo, strategic advisor at The Simple Sum and CEO of Clear Channel Singapore. 

"Consolidation can boost scale. Ultimately, it is about balancing an agenda, between seeking more consolidation, and with it, achieving economies of scale, efficiencies, productivity, and seeking more competition. And, with it, achieving equally compelling outcomes, in terms of creative disruptions and innovation," she said, adding:

It is not a mutually exclusive goal of one being better than the other. Policy-makers are well-placed to manage this balance.

Khoo added that OOH does its best work of delivering reach and impact, when it is delivered at scale. And in the context of Singapore, this is next-best achieved by grouping the key formats under one operator; e.g. bus shelters, buses, trains, airport.

"OOH in Singapore is managed by both public and private operators. As consolidation progresses, we will start to see key operators emerging, to the point that Operator A will be identified as the “bus shelter people”, Operator B will be identified as the “bus people”, and so on, she said. 

"This is not necessarily a bad thing, as it brings on all the benefits associated with economies of scale. In prudence, policies – in governance and regulation - can prevent antitrust behaviours and practices from developing," Khoo added. 

She explained that in action, operators could do well to collaborate more with one another, for true and meaningful scale to occur.

"In spirit, we could behave more like a consortium, and not cartels. There have been various iterations of an OOH committee in existence over the years. For this committee to not just exist but function, we need equal representation and participation from all key OOH stakeholders. This committee could take the industry forward, with one shared goal and one shared voice," she said.

Currently, ad spaces on buses and in interchanges are reportedly managed by SBS Transit (SBST), SMRT, Tower Transit Singapore and Go-Ahead Singapore. They then appoint their own partners, according to The Straits Times (ST). Stellar Ace, SMRT's advertising arm, handles its bus ads while ComfortDelGro’s advertising arm Moove Media handles the advertising for the other three bus operators. 

The public bus system in Singapore currently uses a contracting model where operators bid for contracts and are then paid by LTA to run the services, according to ST. LTA will then keep the fares while operators get to keep non-fare revenue which includes income earned from advertising and also from renting out commercial spaces in interchanges.

Rail operators also run non-transit businesses, but the government began reviewing this practice in 2017, said ST. 

Photo courtesy of LTA, Facebook

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