Overview:
A proposal to add digital outdoor advertising kiosks has prompted the threat of a lawsuit from a company spurned by the selection process.
A proposal to add digital outdoor advertising kiosks to local streets has prompted the threat of a lawsuit from a company spurned by the Santa Monica selection process.
City Hall has been debating the Digital Wayfinding and Out-of-Home (OOH) Advertising Kiosk Program for several months and is scheduled to award an exclusive franchise agreement to BIG Outdoor at their Dec. 13 meeting.
The proposal would deploy up to 50 interactive digital advertising kiosks throughout the city that would have emergency communication capabilities, deliver community messaging, provide public Wi-fi, access the City’s 3-1-1 system, count pedestrians, function as photo booths with local filters/frames and generate revenues through advertising sales.
No costs or investments would come from the City as the program would be funded via a revenue split with the provider.
“After an extensive evaluation process, finalist interviews, and reference checks, an internal evaluation team selected BIG Outdoor as the best bidder,” said the staff report. “BIG Outdoor offered a financial package that was significantly higher than all other bidders (including a $4 million signing bonus and a 50% revenue share offer to the City, with a $5 million minimum annual guarantee), the greatest community benefits, and kiosk technology and design most appropriate for the culture and aesthetic of Santa Monica, and would bring a well-qualified, sophisticated, and experienced team to deploy, operate, and maintain the kiosk network.”
BIG has said the city will receive $9 million in the first year due to a combined signing bonus and revenue split. The company is expecting minimum payments to the city to be $5 million per year but gross revenues could be about $14 million annually over the 20 year agreement assuming all 50 kiosks are installed, which would yield a payment of $7 million to City Hall. Staff said BIG’s proposal was larger than competitors due to their existing advertising agreements with multiple companies.
According to the staff report, BIG would retain a local architect to design the exterior of Santa Monica’s advertising kiosks to ensure they are fully customized for the community and aesthetically suitable for the areas in which they would be installed.
However, one of the companies that bid on the proposal has sent a letter to city officials accusing BIG of exaggerating their qualifications and copying other company’s intellectual property as it relates to the kiosks.
IKE Smart City LLC claims the renderings presented to the city by BIG copied their trademarked designs, that IKE has patents on the technology powering the kiosks.
“IKE has used its distinctive dashboard design consistently since 2018 and has trade dress rights in that layout,” said the letter. “Key to the design is the relationship between the various screen components, including the advertising space. The look and feel of IKE’s user interface was copied by BIG in its proposal. Again, we do not believe BIG has ever created the product that it included in its proposal to the City, so it did not have any interface layouts to include.”
IKE is demanding BIG withdraw its proposal due to the alleged similarities that also include similar language in some written documents.
A BIG representative said the accusations have no merit. The company said they have hundreds of kiosks operating around the country powered by nonpropriatery software that has been in use for years and the final designs of the Santa Monica units will be customized from local feedback.
Council will take up the discussion at their Dec. 13 meeting. Closed session begins at 5:30 p.m., open session will not begin before 6:30 p.m.
editor@smdp,com