File #: 2024-1099   
Type: Contract Status: Agenda Ready
File created: 11/25/2024 In control: Executive Management Committee
On agenda: 1/16/2025 Final action:
Title: AUTHORIZE the Chief Executive Officer to: A. AWARD a firm fixed unit rate Contract No. PS123964000 to GP Generate, LLC to provide advertising and communications services in the Not-to-Exceed (NTE) amount of $1,435,875 for the three-year base term, and $957,250 for the two-year option term, for a total NTE amount of $2,393,125, effective February 15, 2025, subject to resolution of any properly submitted protest(s), if any; and B. PASS-THROUGH the award of individual media purchases associated with the advertising and media services to be provided by GP Generate, LLC for a total NTE amount of $9,000,000 for the first three-year period and additional pass-through costs of $6,000,000 for the option term under Contract No. PS123964000, for a total combined NTE contract value of $17,393,125.
Sponsors: Finance, Budget and Audit Committee
Indexes: Advertising, Budget, Budgeting, Contracts, Housing, Metro Rail C Line, Operations Transportation (Project), Outreach, Procurement, Purchasing, Radio, Rail Operations - Green Line (Project), Research, Safety
Attachments: 1. Attachment A - Procurement Summary, 2. Attachment B - DEOD Summary, 3. Presentation
Date Action ByActionResultAction DetailsMeeting DetailsAudio
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Meeting_Body

EXECUTIVE MANAGEMENT COMMITTEE

JANUARY 16, 2025

 

Subject

SUBJECT:                     ADVERTISING AND COMMUNICATIONS SERVICES

 

Action

ACTION:                     AWARD CONTRACT

 

Heading

RECOMMENDATION

 

Title

AUTHORIZE the Chief Executive Officer to:

 

A.                     AWARD a firm fixed unit rate Contract No. PS123964000 to GP Generate, LLC to provide advertising and communications services in the Not-to-Exceed (NTE) amount of $1,435,875 for the three-year base term, and $957,250 for the two-year option term, for a total NTE amount of $2,393,125, effective February 15, 2025, subject to resolution of any properly submitted protest(s), if any; and

 

B.                     PASS-THROUGH the award of individual media purchases associated with the advertising and media services to be provided by GP Generate, LLC for a total NTE amount of $9,000,000 for the first three-year period and additional pass-through costs of $6,000,000 for the option term under Contract No. PS123964000, for a total combined NTE contract value of $17,393,125.

 

Issue

ISSUE

 

Metro's current media buying agency expires on February 28, 2025 and the new media buying agency will start on February 15, 2025 which ensures a smooth transition, avoids disruptions, and allows the new agency time to onboard. Media buying is essential for Metro to effectively communicate with its  riders, the communities it  serves and potential new riders.

 

Media buying, often referred to as advertising, enables strategic placement of communication  materials including ads across a multitude of media channels and environments with custom messaging to address riders' specific needs. Strategic media buying ensures Metro's transit information and recommendations reach the right audiences, empowering riders to navigate the city efficiently and encouraging non-transit riders to try using Metro. Metro does not have the staff internally to implement media buys. To ensure no disruption in  communications outreach efforts, Metro must use a media agency with advanced digital marketing expertise, local insights, and the ability to maximize impact across all platforms.

Background

BACKGROUND

 

A media buying agency is vital for Metro to maximize its  ability to reach key audiences, particularly in Equity Focus Communities (EFCs). Strategic ad placements across media channels require a team to research and secure premium exposure at optimal rates, ensuring cost-effective outreach. With a dedicated advertising agency, Metro can deliver tailored transit messaging to underserved areas, and maximize investments by ensuring campaigns are effective, affordable, and efficient wherever they are placed.

Additionally, Metro does not have the same purchasing power as specialized media agencies, which can secure more favorable rates due to their leverage and buying power across multiple clients. Partnering with a media agency will ensure Metro maximizes the value of the media investments while benefiting from industry expertise and cost efficiencies.

The increase in Metro’s media placements to retain and attract new riders demands more data analysis, media buying on newer platforms, and creative development, all requiring specialized staff and accounting support. To meet Metro's growing needs, the goal of this procurement was to contract a full-service media buying agency with capabilities to support transit ridership growth, announcing rail openings, service changes, safety improvements, community outreach events and more. This new agency will work closely with Metro’s marketing team to assess the advertising budget and develop integrated plans for campaigns that advance Metro’s products, services, and brand. The contract will enhance Metro’s strategy across all advertising channels, including print, outdoor, broadcast, experiential, digital, programmatic, native, paid and organic search, social, mobile, and emerging media.

Discussion

DISCUSSION

 

The recommended advertising agency possesses the necessary competencies to plan, purchase, and execute media advertising campaigns to support the department in achieving the agency’s business and communications goals, as outlined above. The project scope consists of the following four services:

                     Advertising Strategy Services

                     Media Planning and Buying Services

                     Analytics and Insight Services

                     Creative Development Services

                     Administration and Billings Services

These services include developing integrated media strategies and executing media buys across paid, earned, and owned channels. This involves identifying emerging media opportunities, supporting social media campaigns, negotiating competitive advertising rates, and fostering relationships with multiethnic media outlets to target local communities. Services also include researching the effectiveness of individual advertising outlets in delivering Metro’s message. The focus is on digital channels and social media platforms, using content such as display, native ads, rich media, and mobile executions. Additionally, the contract covers end-to-end billing management, coordinating with vendors/media partners, and submitting consolidated monthly invoices to Metro Accounts Payable department. Payments for media buys will be treated as pass-through expenses per campaign or project.

Determination_Of_Safety_Impact

DETERMINATION OF SAFETY IMPACT

 

There are no safety issues or impacts associated with this procurement.

Financial_Impact

FINANCIAL IMPACT

 

In assessing Metro’s potential budget for the life of the Contract, Metro’s Marketing department will be responsible for overseeing $2,393,125 in advertising and communications services along with the estimated $15,000,000 pass-through costs over the five years that the contract will be in place. The pass-through costs, inclusive of a two-year option, are for both traditional marketing channels (broadcast & cable TV, terrestrial radio, print, outdoor, experiential) and digital channels (websites, social media, native, paid & organic search, connected TV, streaming TV & radio, programmatic and emerging media).

The FY25 Budget includes $104,523 in Cost Center 7140, Marketing, under Projects 306001 Operations Transportation and 300033 Rail Operations - C Line, for this contract.

Since this is a multi-year contract, the cost center manager and Chief Customer Experience Officer will be accountable for budgeting the cost in future years.

Impact to Budget

The sources of funding are operating eligible federal, state, and local resources, which are eligible for bus and/or rail operating expenses.

 

Equity_Platform

EQUITY PLATFORM

 

The recommended media agency contract reinforces Metro’s dedication to equity and inclusion by implementing targeted strategies to effectively engage all customers and stakeholders. This initiative prioritizes outreach to communities of color and underserved populations through various disciplines, including strategic marketing and communications, messaging, creative design, content development, partnerships, and public relations. Engagement with Community-Based Organizations (CBOs) will be incorporated into strategic marketing plans as needed. By understanding how marginalized or vulnerable communities interact with the city and the transit system, Metro aims to enhance communication, drive equitable outcomes, and improve the customer experience.

 

The recommended agency demonstrates a strong commitment to advancing diversity, equity, and inclusion. Its innovative and precise approach to media planning and buying reflects its dedication to connecting with low-income groups, people of color, and other marginalized populations. The agency utilizes industry research and analytics tools to deepen media buying strategy and engagement with diverse and multicultural communities.

 

The Diversity and Economic Opportunity Department (DEOD) established a 3% Small Business Enterprise (SBE) and 3% Disabled Veteran Business Enterprise (DVBE) goal for this solicitation.  GP Generate LLC, a SBE prime, exceeded the goal by making a 42.96% SBE and 6.53% DVBE commitment.

 

Implementation_of_Strategic_Plan_Goals

IMPLEMENTATION OF STRATEGIC PLAN GOALS

 

The recommended actions support the following goals:

 

Goal 1: Provide high-quality mobility options that enable people to spend less time

traveling.

 

Goal 2: Deliver outstanding trip experiences for all users of the transportation system.

 

Goal 3: Provide responsive, accountable, and trustworthy governance within the

Metro organization.

 

A new media buying agency contract will allow the agency to effectively reach and

communicate to diverse ethnic and socio-economic audiences authentically, meaningfully and responsively on all the agency’s projects, programs and initiatives.

 

Alternatives_Considered

ALTERNATIVES CONSIDERED

 

The Board could consider directing Metro to build the media buying team in house, but that alternative is not recommended. To meet Metro's high-volume advertising needs, Metro would require a media buying team with strong digital expertise and local connections. Establishing an in-house media buying and advertising team would require hiring at least six additional full-time employees with expertise in media planning and buying with a focus on digital marketing. In addition, staff would need to invest in new tools and software. Staff has determined that hiring an agency is not cost effective for Metro. This alternative would also require procurement and periodic upgrades of software and tools for campaign and tag management, ad serving, insights and analytics and market research to keep pace with the ever-evolving advertising and media landscape.

Next_Steps

NEXT STEPS

 

Upon Board approval, staff will execute Contract No. PS123964000 with GP Generate, LLC to provide advertising and communications services, effective February 15, 2025.

 

Attachments

ATTACHMENTS

 

Attachment A - Procurement Summary

Attachment B - DEOD Summary

 

Prepared_by

Prepared by:                      Tiffany Srisook, Senior Director, Marketing, Marketing Strategy, (213) 922-5285

John Gordon, Deputy Executive Officer, Marketing Strategy, (213) 922-2290

Monica Bouldin, Chief Deputy Customer Experience Officer, (213) 922-4081

Carolina Coppolo, Deputy Chief Vendor/Contract Management Officer (Interim), (213) 922-4471

 

Reviewed_By

Reviewed by:                      Jennifer Vides, Chief Customer Experience Officer, (213) 922-4060