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CommuteStream’s New Ad Network Uses Mass Transit to Serve Up Ads

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Today in Chicago, commuters on the Chicago Transit Authority will open up their transit apps and find new ads for businesses along their transit route.

CommuteStream, the company behind the new ads, uses “predictive geo-targeting” to show content based on the rider’s routines and preferences. Does your bus pass by a local bar every day? Chances are good you haven’t noticed, but with CommuteStream’s technology, you’ll soon see ads and perhaps deals served up from local businesses along your route.

rsz_incontentad2Annoying as it might seem, as targeted ad technology gets better, it can actually help consumers by showing them things they’re actually interested in when they’re actually interested in them.

But, that convenience is nothing compared to what the network could do for small businesses.

Small and local businesses often find themselves priced-out when it comes to mobile ads, stacking the odds in favor of larger competitors. Yet mobile ads are increasing rapidly. If local businesses can’t find a way to compete, they risk losing even more business.

“With smartphones taking over, understanding riders on an individual level, and in the context of the transit system, opens up major hyper-local advertising possibilities and new markets,” CommuteStream co-founder Samuel Pro said. “It puts the power of highly-targeted mobile advertising, traditionally reserved for large brands and agencies, into the hands of businesses that didn’t previously have any affordable or easy to use options.”

Within a month, CommuteStream hopes to offer 1M impressions a month for these hyper local ads.

The problem, however, is that the ads will be served on local transit apps. At launch CommuteStream is partnering with Chicago Transit Tracker Lite, which reaches about 1% of transit riders. The company estimates that 1/3 of transit riders use their mobile phones to plan commutes.

CommuteStream provides potential monetization for those apps, you have to wonder if their usage estimations are right. Locals are used to their stops and know their route.They don’t really need to check an app for figure out their stops.

Tourists, on the other hand, could be a potential boon for the ads, since they are usually unfamiliar with the landscape and don’t know where to go.

Pro told me via email that most of their users are local, and that’s their target market because locals will provide sustainable business for businesses. If CommuteStream can reach the market they’re looking for, it has the potential to be a huge win for everyone.

CommuteStream launches their pilot today in Chicago, with plans to expand to other major cities soon.