ATMs joined the ranks of broadcast media ages ago as the ATM technology timeline goes. In May 2000, Wells Fargo introduced its "enhanced ATM experience," with a real-time, on-screen headline ticker from MSNBC and a trailer for the upcoming release of Gladiator that ran when the machine was not in use. (Pity the cardholder who had to break through a throng of adoring Russell Crowe fans to get cash.)
Today, ATM-based ads are a well-established revenue stream for banks and IADs both. And firms like Scotland-based i-design serve them as turnkey ATM ad shops, offering media sales as well as ad campaigns and the multi-channel marketing software required to run them.
Not a revenue stream, the revenue stream
But one Brooklyn, N.Y.-based independent ATM deployer believes that ads can be more than just a supplement to ATM revenues — that they can be the entire source of revenue. And he says that after testing and proving his business model, he's ready for the rollout of his surcharge-free ATMs.
In fact, Free ATM founder and CEO, Clinton Townsend, celebrated the launch of seven machines just last week in a five-year deal with the spanking new Barclays Center in Brooklyn, a sports arena (home of the NBA's Brooklyn Nets) and entertainment venue that opened on Sept. 28.
"What we've done is we've struck a multi-year deal with them to essentially be the exclusive provider in the arena. And what we're going to do is bring on third-party advertisers to advertise on the ATMs," the 26-year-old entrepreneur explained.
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Townsend said he first started thinking about offering a surcharge-free ATM when he was a college student. "When you've got $24 in your bank account and you have a car, every gallon of gas counts. Every $3 ATM fee … literally was a gallon of gas for me."
'There had to be a better way'
After college, as an assistant trader on Wall Street, Townsend continued to feel the pinch of ATM fees when he needed cash to go out with friends. "I thought there had to be a better way … 'How can I leverage the ATM channel in and of itself so that it's more consumer friendly?'" Townsend said. "I came up with the concept of providing completely surcharge-free ATMs subsidized through third-party advertising revenue."
After researching the market and talking to other providers, Townsend installed his first ATM in January 2011 at the Knitting Factory, a Brooklyn nightclub. Initially, Townsend said, that machine did impose a surcharge, while Townsend got a feel for owning and operating ATMs. Once he had "a good handle" on the business — and a few advertisers lined up — he dropped the surcharge on the machine (the user's own bank might still charge an out-of-network fee, though).
Current advertisers on the Barclays ATMs are the local search and user review website, Yelp, and the regional no-contract, paid-upfront mobile service provider MetroPCS Communications (a Barclays Center founding partner.) Townsend said these two advertisers "really highlight the core of our platform where we can reach national advertisers, but where we can also reach regional and local brands, as well."
Free ATMs could hardly offer advertisers a more desirable venue than Barclays Center. The 19,000-seat complex already has 200 events booked over the next year, including NBA and NCAA basketball games, gymnastics competitions, championship boxing and concerts featuring everyone from Andrea Bocelli to Smashing Pumpkins.
Is ad revenue enough?
Townsend is cagey about revealing further details about his advertisers, his ad platform, or his business model, which he hopes to patent. He did say that Free ATM has both advertising and placement deals in the works. And he said he was confident that his business model could succeed.
"We won't get into specifics, but we can certainly say that we have a very, very strong business model, and that business model is designed to ensure the growth of our company and the future growth of the industry," Townsend said. [W]hat we've created is something that's sustainable and something that's scalable for the benefit of the entire industry."
The benefit of the ATM industry and his hopes for partnership with other players in it are subjects that Townsend discusses readily, and with a keen streak of idealism.
"The one point I want to get across is we're here to be a partner and so we welcome anyone in the ATM industry that thinks that they can get involved with our business, that they can help us out, or we can help them out in any way, we encourage them to reach out to us," he said. "Because we're here to partner with people, we're here to grow this [industry] and we're here to make this [industry] relevant in the long haul. We're all in this together."
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