The legal threat to a new city-wide digital advertising system appear to have been amicably resolved, at least among the two companies vying for the contract.
BIG Outdoor and IKE Smart City have announced a partnership to meet the terms of a contract with Santa Monica that will roll out up to 50 digital wayfinding signs and raise up to about $5 million per year for city coffers.
City Hall debated the Digital Wayfinding and Out-of-Home (OOH) Advertising Kiosk Program for several months last year before awarding the contract to BIG Outdoor. The system would deploy up to 50 interactive digital advertising kiosks throughout the city with emergency communication capabilities, community messaging, public Wi-fi, access the City’s 3-1-1 system, pedestrians counters, photo booth functions and advertising.
BIG Outdoor received the contract after promising the city $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 once the company installs 25 kiosks but gross revenues could be about $14 million annually over the 20 year agreement assuming all 50 kiosks are installed.
Six companies participated in the process with BIG Outdoor and IKE Smart City making the final cut. Both were asked to submit a “best and final” offer with staff recommending BIG due to more community benefits and higher revenue projections.
That decision proved contentious with Councilmembers Caroline Torosis and Phil Brock dissenting at the time saying IKE had a better product regardless of the revenue potential. During the council meeting, IKE levied accusations of wrongdoing at city staff, the council and its competitor claiming BIG’s revenue projections were unrealistic, that BIG lacked the technology to implement the system and that its proposal was unfairly minimized.
Council and BIG Outdoor strongly pushed back against those accusations with the City Attorney saying the allegations might amount to defamation.
By the end of the meeting, IKE threatened to mount a challenge to the contract at the ballot box. That threat came to fruition in early 2023 when IKE began gathering signatures for a proposed ballot measure that would have either forced the City to rescind the contract or put it before voters.
However, IKE pulled its operatives from the field after about a week and the two companies recently announced a new partnership.
“BIG Outdoor is excited to announce the deployment of a digital wayfinding kiosk network in partnership with the City of Santa Monica,” said the company in a statement. “BIG Outdoor has been awarded a 20 year franchise agreement and will develop and operate the kiosk program, utilizing software powered by IKE Smart City.”
With the partnership, IKE has dropped efforts to challenge the contract.
“BIG Outdoor could not be more excited about this new partnership with the City of Santa Monica. Santa Monica is a city that boasts an innovative spirit that we hope to match through this program. The wayfinding kiosk program will serve as a valuable resource for residents, local businesses, as well as visitors, and generate meaningful revenues each year for the City employing IKE Smart City’s user-friendly software experience,” said Brad Berkley, Founder of BIG Outdoor.
If the process continues without additional disruption, 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.