Citi is to be the title sponsor for New York City's new bikeshare program. But Citi won't see any of the money that Citibike brings in from user fees. Instead, profits will be split between the city government and Alta Bicycle Share, the company that runs the bikeshare network. So why put so much money towards slapping your name across some bikes?
Bloomberg Businessweek puts that $41 million -- "a rounding error for the company" -- into perspective:
But even at the outset, Citi’s bike trip seems to be savvier than its baseball play. The bank pays $20 million a year as part of a 20-year agreement to keep its name on the Queens stadium that the lackluster New York Mets call home. Last year, some 2.24 million people streamed through the turnstiles at Citi Field. The Citi-branded bikes, by contrast, could very well cruise past more people every day as bike-share users pedal through the crowded core of a city with 8.2 million people.
Not to forget the millions of tourists who visit the city each year. The Citi brand will reach all of those people, daily. Unlike baseball games there are no rain delays for bikeshare. The other benefit? Bikeshare docking points are strategically placed in the most highly trafficked areas in the city, meaning high-value advertising.
Fortunately, for Citi and New York, the service is already receiving positive reviews. Having your brand associated with a popular city service in a crowded city like New York certainly seems to have been a smart move for Citi.
Bank Rolling: This Bike Brought to You by Citi [Bloomberg Businessweek]
This post was originally published on Smartplanet.com