Ads You Can’t Escape

Dave Hoffman

Dave Hoffman is the Murray Shusterman Professor of Transactional and Business Law at Temple Law School. He specializes in law and psychology, contracts, and quantitative analysis of civil procedure. He currently teaches contracts, civil procedure, corporations, and law and economics.

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10 Responses

  1. Nate Oman says:

    Dave: Is there any metro transit authority in the nation that has ANY profit centers? My understanding is that subways and the like operate at a loss and are subsidized with tax revenues. (Not that this is a bad idea; roads are subsidized with tax revenues as well…)

  2. I’m not a big fan of advertisements in every corner and crevice of life either, but perhaps the ads will keep fares from raising. I assume that the revenue from the ads goes into the operation of SEPTA, and this revenue might prevent a fare increase in the future (or forestall fare increases). For many people, they’d rather be mentally taxed with ads rather than paying higher fares. Perhaps they could offer cards with ads and cards without, the cards without ads costing more. Think of it like the subway’s version of HBO.

    I’m not pro-advertisements, so please don’t misinterpret this comment. I’m just raising some questions, that’s all. Indeed, the questions can be raised even more broadly — should the government aggressively try to raise money for a wide range of its services for ads? So perhaps government websites should take on ads; ads could be placed throughout government buildings (perhaps ads even in the White House and Capitol, and maybe even some product placement deals too, such as an official beverage for the White House, etc.); we could have ads painted on the Space Shuttle, ads on military vehicles and uniforms, ads on the outside of Amtrak trains, ads on anything the government owns. This revenue could help subsidize many government services and ease the tax burden. Again, I don’t necessarily agree with this, but I wanted to throw out the idea. On the one hand, I’m not a fan of seeing ads — I love my HBO. But there are many poeple who can’t afford HBO, for whom lower fares and lower taxes might be worth the trade-off.

  3. meep says:

    Well, it seems that Metrocards have had advertising on them, though usually for some museum show or generic NYC tourism boostership.

    Pulling out my most recent Metrocard, I see a picture of the NYC Transit’s first air-conditioned bus, accompanied with the logos of the local NBC affiliate, the New York Post, and 100 years of NYC buses commemorative logo. To me that constitutes being an ad (just like those underwriters’ blurbs on PBS… they look like ads to me. They’re trying to buy goodwill for their companies.) They’ve got ads on the bus shelters, newstands, station walls, and subway cars. I’ve seen “wrapped” buses. I’m guessing the only reason the Metrocards don’t have “real” ads on them yet is because they’ve not been able to sell the concept… very few people actually look at their Metrocards unless they’re screwing up.

  4. Dave Hoffman says:

    MaryPat: That is pretty strange, because the metrocard I purchased this weekend (from a machine) is yellow and blue and ad-free. I wonder if folks with permanent passes get different cards?

    Nate: I meant profit-center in the context of an overall losing operation, of course.

    Dan: there were some articles a few years back about renaming Boston T-stops after sponsors, and how that was a terrible idea. I don’t know what came of it, if anything. I actually have a smaller problem with renaming the entire station than putting an ad on the ticket – because I take the ticket home with me. The irrational lines we draw…

  5. Matt Bodie says:

    The front of the NYC Metrocard has the yellow and blue logo, but the back generally has some sort of civic advertising. An older card of mine has an ad for NYC’s bid for the Olympics in 2012.

  6. Hey Dave, check out PUC v. Pollak: http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=343&invol=451

    It’s a neat look at what I call “coercive advertising,” commercial messaging that you cannot avoid. In that 1952 Supreme Court case, the court rejected the First and Fifth Amendment claims of bus passengers who objected to the bus company playing music and advertisements on the intercom of the bus. There are three rather interesting opinions–Justice Black concurred with the majority, and found that the bus passengers were not deprived of their First and Fifth Amendment rights by the music and ads. However, Justice Black argued that if the broadcasts contained news or other propaganda, forcing passengers to listen would violate the First Amendment. So, I guess Justice Black might object to your subway card if it had some political/news message.

    Justice Frankfurter recused himself, apparently because he himself rode the bus, and was “a victim of the practice in controversy.”

    Justice Douglas wrote a very strong pro-privacy opinion, arguing that “If liberty is to flourish, government should never be allowed to force people to listen to any radio program…”

    C

  7. Doug B. says:

    I think Dan has his finger on the most important issue, which in turn leads me to ask how much Dave and others would be willing to pay for an ad-free card. Put another way, we all love to complain about advertising, but the revenue ads produce lower the real costs of so many products (such as newspapers and websites).

  8. Adam says:

    How much do the ads bring in? Why not offer a choice of paying more for an ad-free card? What would be the administrative overhead of this?

    Presumably, now, there’s only a single batch of cards each month, with all the fare and value data encoded electronically. Adding a second batch as ad-free cards would entail having to have a mechanism for selecting, such as extra fare machines which dispense such cards. Maybe SEPTA could simply read any card you put in, and control who can put value on a card?

    You could get whatever affinity card people wanted to use in the metro.

  9. Dave Hoffman says:

    Chris – what a great opinion! Thanks for the tip.

    Doug, I guess I’m starting from the position of someone who was already paying for a no-advertising card, and now is paying the same price (not less) for a card potentially festooned with ads. You (and Dan) may be right that this is a way of subsidizing rail-travel without raising fares, but given what I know about how SEPTA is run, I doubt the money will be spent in an intelligent way. It is actually more likely that someone in the middle-management said “we just, foolishly and humiliatingly, lost a strike to the union, how can we squeeze more money without approaching our politically-run board for a fare-hike.” Also, the WTP criterion sweeps pretty far, considering (as Adam points out) that it would be really hard to create price discrimination mechanisms in this context. Would I pay significantly more for an ad free experience on the subway? Maybe – I do pay for HBO – and maybe not. But if the choice was one of a few cents, I’d probably buy the ad-less card, out of principle. Especially after I’ve precommitted myself in this post :)

  10. anonymous says:

    The “mental tax of ignoring an ad”? . . .

    Wow. That’s some brain you got there.