Take a look at a 59U schedule. A quarter of one side is completely blank. Placing an ad there for a restaurant at the Waterfront or a theater in Squirrel Hill would reach an extremely targeted audience. So I pretty much imagine this idea being limited to a small number of buses (54C, 59U, 64A, 500). The ads should fit the current color scheme to save money and they should only appear within the schedule. They should mention that advertisement does not imply approval from the Port Authority. They should in no way affect the information contained on the schedule (map, timetable, fares, etc.) It would even be worthwhile to instead of ads just have a listing of local businesses who pay to be included on schedules.
So here's the issue: why doesn't anyone do this already? Because the Port Authority is a public enterprise? That doesn't stop them from covering their buses in and out with ads. Let's look at Port Authority's advertising policy:
Port Authority will not accept advertisements that are obscene, unlawful, misleading, libelous or fraudulent. Further, Port Authority will not accept advertisements that are non-commercial; that appeal to prurient interests, that are or may be offensive to riders; that glamorize or otherwise promote violence, sexual conduct, alcohol or tobacco use; that are political in nature or contain political messages; or that are reasonably determined not to be in good taste. This policy is intended to be an objective and enforceable standard for advertising that is consistently applied. It is also Port Authority's declared intent not to allow any of its Transit Vehicles or Property to become a public forum for dissemination, debate or discussion of public issues.
This policy has gotten PAT in hot water before regarding a PSA telling ex-criminal offenders that they have to right to vote. PAT denied them because they are non-commercial. Not that PAT doesn't have plenty of ads for other non-profit organizations that don't target ex-cons. I'm sure Port Authority would not like their schedules filled with ads for payday loans, medical studies, and bail bondsmen. So this is a very large hurdle. In addition, the ads should be related to the area on the route, since this is what makes them relevant, but their current policy does not restrict based on area. I'm not sure if this policy is PAT's or if it is state or federal based.
But I know this: I never read ads in magazines but a restaurant ad in a program for a show Downtown worked because I needed a place to eat after. An ad for a restaurant or shop along the route (and a reminder to pull the cord at Murray/Beacon) could work pretty well for businesses and the Port Authority. Even if it just covered the cost of schedules, Port Authority has long been looking for a way for businesses to "sponsor" routes that serve them. Here's their chance. So consider this a free one PAT.