Transport for London seeks media partner for £1bn contract

Transport for London is inviting media companies to pitch for a £1bn contract to oversee advertising across the capital's Underground system and to deliver "more imaginative" experiences for passengers.

The body that runs London's public transport said it was seeking a partner to develop new advertising technology across its network, which supports 30m individual passenger journeys each day and includes more than 400 stations.

Graeme Craig, director of commercial development at TfL, said: "Advertising is at the centre of our plans to innovate in order to raise revenue that we can reinvest in London's transport network.

"We know that commercial media will change dramatically over the next few years, and we want TfL and London to be at the forefront of that revolution. We have huge footfall on a daily basis and the best assets in London, and are keen to find a partner who shares our ambitions."

The current advertising contract on the London Underground network is managed by Exterion Media, the European advertising company owned by private equity firm Platinum Equity.

Exterion is likely to face fierce competition from rivals including JCDecaux and Clear Channel Outdoor in bidding for the eight-and-a-half year contract, the largest of its kind in the UK and one of the biggest in the world.

Mr Craig said that unlike in the past, TfL and the winning bidder would act as partners, splitting the cost of investment and the revenues from the advertising business. The current contract is based on minimum guarantees, which proved costly for Exterion after the advertising market collapsed following the financial crisis.

"We're now willing to accept a much greater degree of risk," said Mr Craig. "TfL has woken up to the fact that it's more than just a transport business."

One advantage of structuring the contract as a partnership, he said, is that it will enable TfL to think "more imaginatively about how we make use of the space that we have". This is likely to include forms of digital marketing that "break down the barriers between retail and advertising", potentially including virtual stores within Underground stations.

For the first time, TfL is combining its assets across London Underground, London Overground, Tramlink, Docklands Light Railway and Victoria Coach Station in a single contract. Advertising on buses and roadsides in the capital will be handled separately.

TfL expects the tender process to be completed by April next year with the winning partner being in post by October 2016.

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