You’ve seen them if you’ve been to New York recently or are one of the city’s harried commuters. Bright, colorful, funny, cheeky ads for startups selling everything from insurance to mattresses, plastered in every subway car and station.
The New York subway had long been known for ads hawking questionable services from plastic surgeons and personal-injury lawyers. Then young, well-funded companies like Casper and Seamless realized that even in the age of Facebook and Google, subway ads are a cost-effective way to grab attention. In a testament to the growing power of the city’s startup scene, these upstarts have helped push up the price of certain subway campaigns sevenfold in the past five years and chased away many of the surgeons and lawyers.
“It’s become a rite of passage for startups and tech companies in New York,” says Jennifer Fitzgerald, Chief Executive Officer of PolicyGenius, an insurance-comparison startup. “You’ve made it when you’ve got your subway ads.”
In a recent four-week campaign, PolicyGenius spent about $250,000 to buy a “brand train,” which involves covering half of the inside of around 550 randomly selected subway cars, or about 9% of the total fleet, with ads. Five years ago, the home services platform Handy paid less than $50,000 for the same thing, says CEO Oisin Hanrahan.
John Laramie, who runs the tech-focused marketing agency Project X, says brand trains are almost sold out for the rest of the year and now going for $345,000. Outfront Media, which sells ads on behalf of the subway system, declined to comment on pricing but says it launched campaigns with 100 venture-backed companies in 2017, 30% more than it did in 2016. Not all of the space has been gobbled up by local startups, of course; big established brands including YouTube and Twitter have taken over trains and stations, too. In late May, Spotify ads blanketed Union Square station in Manhattan.
The rising cost of subway marketing is crowding out longtime advertisers. One is Manhattan Mini Storage, famous locally for sassy ads featuring such quips as “Why leave a city that has six professional sports teams, and also the Mets?”“We’ve had a great run with the subway part of our campaign and I think we would continue to consider it but price is always a factor, you want to get the best reach for the best value,” says Jason Morros, who runs marketing for Manhattan Mini’s parent Edison Properties. “To have an impact you really have to have those big buys that these startups have been doing.”
After years of false starts, New York’s tech scene is growing up. Venture capital investment is ballooning, tech giants like Google are adding thousands of jobs in the city, and former bankers, advertisers and retail execs are lining up to disrupt their former industries. These consumer-focused companies use New York’s population of 8.5 million as a testing ground for new products and ideas, from electronic tooth brush subscriptions to food delivery services. The subway is ground zero for many of them.