There is an adage that half of all money spent on advertising is wasted, we just don’t know which half.
The risk of a promotion not paying off may have come to mind on Monday when Bixi, the Canadian company behind sponsored bike-sharing programs in many cities, filed for bankruptcy. Citigroup, which sponsors New York’s program, and Barclays, the sponsor in London, have spent tens of millions of dollars to promote their brands through bike-sharing.
But while bike-sharing programs might not have been successful for Bixi and its financial backers, the bank sponsors care more about the popularity of the bike-sharing programs. And they are popular.
There have been more than five million rides on Citi Bikes in New York. In London, the sharing program has recorded more than 26 million rides. For the sponsors, those eyeballs may count more than any investment return.
Citi has plunked down $41 million to advertise on all of New York City’s 6,000 bikes and 330 bike-sharing stations. The money is probably a significant portion of the company’s location-based ad spending in New York, but less so globally.
The bank is not an investor in the bike-sharing program. So to figure out just how effective it is as an advertising tool, the bank is going straight to New Yorkers.
Citi surveyed people before and after the program began in May, asking whether they thought the bank was an innovative or socially responsible company.
So far, Citi has been pleased with the results. According to its internal data, the number of people saying they had a favorable impression of the bank climbed 17 percentage points after the bike-sharing program started, while the number saying the bank was for people like them rose 12 percentage points.
“From the sponsor perspective, Citi Bike has exceeded expectations,†said Andrew Brent, a Citigroup spokesman. “Our brand tracking measures show remarkably positive increases, and in just a few months Citi Bike has become a celebrated and highly visible part of New York City’s physical landscape.â€
Barclays announced in December that it would not renew its sponsorship of its popular London bike-sharing program past 2015. The program has been extremely popular since it began in 2010, but the bikes became known as Boris bikes, after London’s mayor, Boris Johnson, and not Barclays Bikes. At the time, Barclays said that its decision not to renew had nothing to do with the association.
Barclays declined to comment.
On May 7, 2012, the day New York City’s bike-sharing program was announced, Mayor Michael R. Bloomberg had this to say while introducing Vikram S. Pandit, Citigroup’s chief executive at the time:
“The person who I have the pleasure of introducing next hopes that everyone does exactly the same thing I did four or five times: confuse ‘Citi Bike’ with ‘Citibank,’ †the mayor was quoted in Bloomberg Businessweek as saying that day. “That is very good for Citibank’s business, and presumably the reason why they are the sponsor of this - and I certainly hope it works.â€
This post has been revised to reflect the following correction:
Correction: January 23, 2014
An earlier version of this article misstated Citigroup's internal data on the bike-sharing program. Favorable impressions of the bank rose 17 percentage points after the program began, not 17 percent, and the number of people saying the bank was for people like them rose 12 percentage points, not 12 percent.
