KSRTC drops middlemen, doubles ad revenue to Rs 12 crore

Alappuzha: Pushed into survival mode, the Kerala State Road Transport Corporation (KSRTC) is slowly, but surely, plugging revenue loopholes.

The corporation has doubled its advertisement revenue from an average of Rs 6 crore per year to Rs 12 crore by bypassing middlemen and adopting a direct approach with advertisers. It has cut ties with two agencies that were entrusted with advertisement management.

“Now we’re also doing away with the ad agency in the case of AC and non-AC low-floor buses following the substantial ad revenue rise in the normal buses by direct advertising. The agency’s term has come to an end and we’ve decided not to renew the contract,” said a senior KSRTC official in charge of the advertisements.

The move to cut off the third-party advertising agencies was initiated two years ago, after it failed to get the expected revenue from them. There were also complaints against the two agencies for charging different rates from different clients. It also resulted in revenue leaks by way of high commission and administrative costs.

“The contract with the agencies was signed for Rs 30 crore in five years, which comes to Rs six crore a year. But after we started doing it directly, we received over Rs 12 crore last year. We expect the same to touch Rs 15 crore this year,” the official added.

The KSRTC formed a 19-member marketing team and reached out to the clients directly. The decision proved to be a game-changer for the corporation. By leveraging its extensive network and brand visibility, the corporation attracted a diverse range of advertisers, including local businesses, national brands, and government agencies.

“We’ve brought in uniformity in rates charged. The basic rate for all clients is the same, no matter the class of buses – whether it’s super Deluxe or Fast passenger. But then the clients can select the buses based on the visibility they want, whether state-wide or the local region. They have to give the design though,” the official pointed out.

Route rationalization cuts down operation expenses
Meanwhile, the route rationalization initiated after January, when KB Ganesh Kumar assumed charge as the Transport Minister, too has proved out to be rewarding.

“The main aim was to eliminate the dead kilometers a day, by cutting down services on routes or sections where the collection is poor. We managed to cut the monthly expenses by about Rs 4.5 crore,” said G P Pradeep Kumar, Executive Director (Operations).

The corporation managed to save 13, 100 liters so far by eliminating 52, 456 dead kms per day, thereby cutting diesel, maintenance, and spare parts expenses.