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Forget the Fritos. Bring on the dot-coms. Barry McCarthy, vice president of marketing and business development for Wells Fargo, said his company eschewed "fast food consumables" in favor of high-tech companies like AT&T and Amazon.com when lining up advertisers for its Media Express ATM Network. That selectivity seems to have paid off. The San Francisco-based bank's network is an early success story in ATM advertising, with ads running on about 600 machines. Wells Fargo has gotten positive press on its ATM advertising program, no mean feat in its home city, where banks are typically cast in less than a positive light in the local media. It was standing-room-only at the recent Faulkner & Gray Advanced ATM Conference '99 in Chicago during back-to-back presentations by McCarthy and Don Jarecki, business manager of retail ATMs for EDS, another early player in ATM advertising. McCarthy said Wells Fargo made a "very deliberate choice" to pitch its program to only certain types of companies. "You can chase Burger King and McDonald's all day long and be successful in the short term, but you're not helping the industry deliver channel growth." When assessing potential advertisers, McCarthy said he wanted to find "partners who could help us in our ability to grow the channel." Once the ATM is established as a viable medium and a larger number of machines have advertising capabilities, then lower-ticket brands can be added to the mix, he added. Noting that "each participant in the ATM industry has a smaller share of the pie" due to flattening transaction volumes, he said the industry is experimenting with a wide range of products and services to offer increased value to consumers and, hopefully, to keep them using ATMs. One of advertising's greatest strengths: Unlike other value-added ATM transactions, it's all inclusive. "You can't sell everyone a phone card," McCarthy said, "but you can show ads to every user." Jarecki, of EDS, was back for a second year to discuss ATM advertising. While great strides have been made in the year between his presentations, Jarecki suggested that a long and twisting road may still lie ahead. "(ATM advertising) is still struggling for identity in the marketing landscape, but it's gaining credibility," he said. "After Y2K, I think you'll see three to five years of work crammed into 18 months." Ad programs are starting to reach critical mass because the technology is becoming more affordable. "It's 20 percent cheaper now than it was three years ago," Jarecki said. Even at the low end, functionality is "impressive," he added, mentioning ATM wraps and toppers with scrolling signage.
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Movin' on up McCarthy identified six levels of ATM advertising -- ranging from a simple ad printed on a two-color receipt at level one to full-motion video with sound, combined with coupons on demand at level six. "As an industry, I think full-motion video is where we really need to go," he said. Crazy for coupons A Wells Fargo Media Express ATM user receives a coupon with an offer that reinforces the advertising message, following a screen prompt directing him to look at his receipt. The bottom third of the receipt is perforated so that he can redeem the coupon and save his transaction record. Combining a screen ad with a receipt provides an "optimal one-two punch," McCarthy said. "Is there any other channel that can do that? With a TV or a magazine ad, you see it and it's over." Like Wells Fargo, EDS incorporates receipt coupons into its advertising program. Coupons are important because they provide "a call to action" for consumers, Jarecki said. They can also enhance a message's staying power, since many customers save receipts to balance their checkbooks. According to EDS research, 67 percent of ATM users identify themselves as "frequent coupon users," 65 percent say they notice ads on the backs of receipts and a whopping 81 percent say they'd like to receive a coupon from an ATM. Even without coupons, ATM ads offer excellent "quality of impression," Jarecki said, noting that in exit interviews conducted by EDS, 71 percent of ATM users could identify the subject matter of ads they had just seen for the A&E network. Of that 71 percent, 56 percent could identify the advertised TV program by name or by the fact it would air on A&E. "TV can deliver an impression in five pops but an ATM can do it in one," he stressed. And ATM users seem to like the ads -- or at least not object to them. Fifty-seven percent of them agreed with the statement "I would enjoy watching an ad on an ATM." Jarecki joked, "You probably can't get 57 percent of the population to agree they like having sex." User ID Perhaps the ATM's biggest asset as an advertising channel is its ability to identify users via their bank cards. The creation of a highly targeted marketing campaign based on this information is "the holy grail" for an advertiser, McCarthy said. "No other channel can talk to individual customers," he stressed. "You can guess the type of people watching a particular television program, but there are no guarantees." Jarecki agrees with McCarthy that "micro marketing" will elevate advertising programs to the next level. ATM deployers can learn from Internet merchants in that respect, he said. "The Internet is not only rewriting the rules for e-commerce in general but for targeted advertising in a big way." While ATM deployers are still struggling to define which consumers are being reached by advertising, that will change when they begin tapping into existing customer databases. The title of Jarecki's presentation, "Better Deals through Better Data," reflects the importance of targeted marketing efforts. Financial institutions like Wells Fargo will lead the way here, Jarecki said, because many of them have already compiled extensive profiles of their customers. Net acquirers, however, must be more creative. General demographics are a good starting point, Jarecki said, pointing out that ATM users are usually ages 18 to 49 with relatively high household incomes. Research done by retailers can also help deployers identify ATM users in terms of age, income, gender and ethnicity, he suggested. "There's a very good chance your retail partner has studies you can leverage," he said. "A 7-11 customer is different than a Target customer than a Kmart customer than a Nordstrom customer." Another possibility: zip codes. EDS uses a system called PRIZM. Based on the principle that "you are where you live," PRIZM divides U.S. neighborhoods into 62 clusters with evocative names like "Blue Blood Estates," "Pools and Patios" and "Kids and Cul-de-Sacs." Because each cluster has defined lifestyle and purchase patterns, EDS knows that residents in Chicago's 60614, for example, are "bohemian young literati" who are more inclined than the general population to watch the Bravo network and read GQ magazine. While Jarecki doesn't see ATMs as a stand-alone advertising medium, he said they can help ad agencies "break through the clutter." Advertisers increasingly want to follow consumers out of their homes and everywhere they go. Because ATMs are found in so many locations, Jarecki said they are an ideal supplement to more traditional, home-based methods of marketing like TV. While it may take some time for ATM advertising to win mainstream acceptance, Jarecki has no doubt it will happen. "The momentum is going to pick up, and it's going to be unstoppable," he said.