Legislation Assembly Democrats Craig Coughlin and Timothy Eustace sponsored to allow some state agencies to sell Internet advertisements on their websites to test whether they can help ease taxpayer burdens was released by a Senate panel on Thursday
“The purpose of the bill is common sense – to provide new sources of revenue for the state, particularly for state agencies that maintain high-traffic web pages,” said Coughlin (D-Middlesex). “This is 2014. Consumers are used to seeing advertisements on websites, so we’re not breaking new ground here. In fact, if anything, New Jersey government is behind the times when it comes to not generating revenue from its web sites. The bottom line is this – anything we can do to ease the burden on taxpayers is the right thing to do.”
The bill (A-804) authorizes the Economic Development Authority and the New Jersey Lottery to establish a three-year pilot program to sell Internet advertisements for display on the agency’s websites.
Revenue generated by the ads would be deposited into the state budget by agencies for which expenditures are authorized through the annual appropriations act.
For agencies not provided for through the annual appropriations act, the agency would remit to the state treasurer such revenue generated from the sale of Internet advertisements as remains after deductions by the entity for the incremental cost of offering Internet advertisements and of an additional 10 percent of such revenue for the purpose of innovation in operations, programs or services.
Each agency would have to develop policy, style and content guidelines for website advertisements that ensure that the subject matter of the advertisement directly relates to the agency’s business mission and purpose. Moreover, each agency’s website would be required to include a disclaimer stating that the advertisements do not imply endorsement by the state. We can do this in a careful and thoughtful way.”
The bill would also require that each agency submit a report to the governor and the Legislature evaluating the effectiveness of the program, including a summary of expenditures and revenues, together with recommendations concerning whether to continue the program.
“Let’s see if it works,” said Eustace (D-Bergen/Passaic). “Even if it’s not a large windfall, every dollar counts when it comes to finding savings for the taxpayers. This is a sensible concept that could prove beneficial to taxpayers, with no downside besides a few ads on a website, which we’re all used to seeing at this point. This makes sound fiscal sense.”
The sponsors noted other governments had success with such programs.
The Massachusetts Bay Transit Authority noted informally that the gross revenue produced on MBTA.com for the June 1, 2011 to May 31, 2012 fiscal year was $84,000 and that monthly earnings range from $4,000 to $9,000. The MBTA received 76 percent of gross revenue, or approximately $56,000, and the private company managing the advertising received 24 percent of the gross revenue, or approximately $28,000.
A representative from Oregon Travel Experience, a semi-independent state agency that partners with local businesses for highway signs for gas, food, lodging, camping and attractions, noted informally that approximately 150 advertisements were purchased by their business customers and linked through the Oregon Department of Transportation (ODOT) website for Trip Check, tripcheck.com.
Trip Check is ODOT’s traffic and travel website. Gross revenue for online advertising for fiscal year July 1, 2011 to June 30, 2012 was approximately $25,000. Twenty-five percent of the annual revenue, or approximately $6,250, was provided to the ODOT and approximately $600 per year is paid to a contractor as an annual fee for the maintenance of a segment of the website.
The bill will now awaits further consideration by the Senate.