11 October 2017

Why tech startups advertise on the London underground

They’re unsophisticated, untargeted and seriously old school: so why do London’s tech startups still love tube advertising?

Strange as it may seem in the age of Facebook and Google ads, a growing number of London startups are turning to tube advertising to attract new customers and help their brands stand out from the masses.

‘The tube cuts through the noise,’ says Tom Cavill, co-founder of property Isa firm Bricklane, which first tried its luck with the underground’s users (up to 4.8 million of them per day) in January this year. ‘Other ad formats are thirsty for your attention.’

Companies can be reluctant to advertise on London’s underground as it’s sometimes associated with trashy brands and ugly adverts.

But Cavill believes that commuters are a relatively captive audience. They’re looking for distraction, rather than trying to avoid it.

Facebook: loud and expensive

‘With other areas of advertising, like Facebook, you have to think about how to dress an ad up as something other than an ad. With the tube, people almost want to be entertained,’ says Cavill.

But advertising on the tube isn’t just a way to catch commuters’ eyes and distinguish a brand. It’s also a means of future-proofing against Facebook and Google’s 99% share of the digital ad market.

Personalised children’s book publisher Lost My Name has been experimenting with advertising channels in the US, from TV campaigns to podcasts, for some time. ‘Last year, one of our biggest pushes was to diversify our marketing,’ explains head of marketing Anne Thouas. ‘We’re pretty Facebook-dependent, but it’s only going to get more expensive. It’s added two million more advertisers year-on-year.’

Over 60 million businesses now advertise via Facebook users’ news feeds. In the last few months of 2016, the average cost per Facebook ad click in the UK was 21p, while the cost per app install was £4.33 – more than double the cost in the US. Thouas is also convinced that, after three years, it’s getting harder for Lost My Name to reach new customers through Facebook.

Experimental advertising

Lost My Name trialled its first tube campaign before Christmas 2015, after noticing several other startups advertising on the tube – Hello Fresh, Dog Buddy, Swoon Editions among them – and asking them for feedback. It ran a second set of 2,200 ads inside tube carriages for two weeks in March this year.

‘You don’t want to make eye contact with anybody, so you end up looking around,’ says Thouas. ‘Ads are memorable in the tube.’

Exterion, the media agency responsible for selling TfL’s ad space, says the majority of its clients come through word-of-mouth referrals. ‘The startup world is a small one,’ notes Killian Barrins, who heads up Exterion’s ventures arm, which was set up in 2015.

To encourage consumer-facing startups with limited marketing budgets to dip into tube ads, Exterion offers various payment deals, from a share in revenue to a percentage per app download, for example. One of its longest-running advertisers is Made.com, which has seen a 50% increase in sales year-on-year and is one of the fastest growing retail brands in the UK. ‘Lots of startups use us just before looking for funding,’ adds Barrins.

New customers

Bricklane’s objective was to gain new customers, stand out from its competition and build trust in its brand in the run up to the Isa deadline; it wanted its campaign to be ‘remarkable’. It created two ads – one that was simply descriptive, another that was ‘more creative, to make you think’ – and opted for the large ‘16-sheet’ posters opposite platforms favoured by big brands. 150 adverts were pasted up in stations throughout zones one and two for one month.

‘We’re a considered purchase,’ adds Cavill. ‘People like to see us a few times, and seeing us in places other than the internet builds that story of the brand.’

Tracking success 

Although quantifying brand recognition is hard, Lost My Name took a forensic approach to monitoring the success of its London underground ads, using surveys on the order complete page to find out how customers had heard about the site, then verifying the responses against users’ IP addresses. Thouas says there was a definite uptick in sales from the capital on both occasions, although she admits the March campaign was less successful than the initial Christmas one. ‘It’s a difficult time of year for a seasonal business,’ she explains.

While Exterion’s data can pinpoint how and where to best target specific user groups, Barrins recommends ‘reaching as many people as possible, as often as possible, as quickly as possible, instead of zoning in on a particular station’.

Costs

£127,600 for 4,400 panels ads in every tube carriage on every line for two weeks

£103,600 for 200 16-sheet poster ads, one in most stations in zones one and two for two weeks

Carriages have a 13 minutes average dwell time

Platforms have a 3 minutes average dwell time