Article

ATM advertising: More bank for the buck

Financial institutions are among those experimenting with ATM advertising. Their experiences will likely clear the way for other deployers. by Ann All, editor

February 21, 2002

The success of ATM advertising may hinge on whether it plays more like Puff Daddy or Vanilla Ice.

Like Puff Daddy, will it move beyond its "next big thing" status to win widespread consumer acceptance? Or will it flame and fizzle faster than you can hum "Ice, Ice Baby?" The ATM industry is moving closer to answering that question.

Wells Fargo recently made a big media splash with the launch of an advertising program on 340 of its ATMs in the San Francisco area. Amazon.com and AT&T have signed on for the program, which combines animated on-screen advertising with printed receipts. Wells Fargo also will promote its own bank products and ski lift tickets that are sold at the machines.

Been there, done that

Steve Pidgeon, assistant vice president of ATM services for Indianapolis-based Union Federal Savings Bank, was a bit bothered by press reports that Wells Fargo was the first bank to use animated ads and lease screen space to advertisers. His institution, with 42 branches in central Indiana, has been doing ATM advertising for four years. Union Federal began with coupons, then added high-resolution screen graphics.

"For them (Wells Fargo) to say it was new, state-of-the-art, first ever done -- they were just wrong," Pidgeon said.

No hard feelings, he added. The publicity generated by Wells Fargo is bound to boost the profile of ATM advertising.

"I think a lot of advertisers are in the dark as to whether this is available," Pidgeon said. "The more banks that get into it and start doing it, the better. This is going to become an accepted advertising form, and then advertisers are going to seek us out."

Pidgeon started his program to test the capabilities of his Diebold 1072 BTP. It took two months of trial and error before he got his first high-quality screen image, of a local radio station's logo. The promotion started as a giveaway, but the station later signed on as a paying customer.

Pidgeon questions why banks invest in expensive, full-function machines and then use them mainly -- if not exclusively -- for simple transactions. "A lot of people have the equipment that can do it. They just don't utilize it," he said.

In addition to on-screen advertising, Union Federal uses lower-tech coupons and panels on the exterior of machines. "We put the 12-year-old machines that don't have any of these other capabilities to work," Pidgeon explained. Those options also appeal to advertisers who don't want to pay the 5 and a half cents per transaction the bank charges for screen graphics.

Union Federal's most effective promotions feature on-screen advertising combined with a coupon. Local Subway stores told Pidgeon they got a 14 percent redemption rate for one such ad campaign. The bank's ATMs usually feature offers from nearby businesses. "You're as close to point of sale as possible," he said.

Union Federal is forging ahead and introducing full-motion video on about a dozen of its 121 machines this month. Those machines also will be programmed to recognize customer cards, a valuable piece of information for cross-marketing bank products. Union Federal customers will see videos plugging loans and investments, while foreign customers will get ads for checking and savings accounts.

Unlike some larger banks experimenting with video advertising, Union Federal doesn't plan to download graphics from a central location. Instead, programming the machines will be incorporated into the bank's regular maintenance program.

Proceed with caution

Another financial institution that's testing the advertising waters is Cleveland-based KeyBank. Like Wells Fargo, KeyBank uses onscreen advertising combined with receipt coupons in machines located at Arco convenience stores. In one promotion, ATM users who bought a soda got a free candy bar with their coupon. KeyBank also gave away a 1999 Jeep Wrangler in a sweepstakes that ATM users could enter at Arco stores.

Currently Key is running a promotion for Flowers USA on its Arco machines. Timed to coincide with Mother's Day and Secretary's Day, it offers ATM users a 10 percent discount on floral orders. "Key wants to always have something of value on those screens," said Jack Kucler, executive vice president of Key Electronic Services.

Key is also interested in running its own promotional ads on Arco machines, which are located in states in which the bank has a limited presence. "We can use centralized advertising to identify 'what is Key?' It's a nice way to identify our brand in potential markets," Kucler said.

While most of KeyBank's advertising efforts have been at off-site locations, the bank is dabbling in video advertising at its branch or "franchise" locations. Kucler said the program will expand to 300-500 of Key's 1,600 "franchise" ATMs in the next six to 10 months.

Full-motion video is the next step for KeyBank. "We have a little bandwidth issue yet," Kucler said. "Our communication device isn't large enough, and we must build an interface for our software and the MPEG software." The bank hopes to launch a full-motion pilot in California within the next few months.

ATM advertising is in its infancy and will likely experience some growing pains, Kucler acknowledged. "I think there's going to be an awful lot of different trials done with an awful lot of lesser-than-anticipated results," he said. "I don't think tomorrow we're going to be able to say advertising is going to pay us $150 a screen per month. I don't think we know enough yet."

Going for the dough

Atlanta-based EFT Promotions, Inc., which works with about 90 banks in 40 different markets, sometimes devises a campaign to fulfill specific bank goals. When Union Bank wanted to increase deposits at its ATMs, EFT set up a campaign in which customers who deposited $500 or more received a coupon for a free pizza at San Diego Pizza Hut locations.

The company offers banks a percentage of advertising revenues so the ATM "becomes a real profit center for them," said Brent Lyner, EFT's vice president of sales. "It's a win-win situation for everybody. The banks prosper from it, the advertisers do well, bank clients benefit and, of course, we make a living."

EFT's portfolio of advertisers includes such big names as American Online, MCI and Pillsbury. Lyner said banks prefer offers they perceive as an added value for their customers, such as a "buy one, get one free" fast food coupon.

EFT sends banks a list of potential advertisers, so they can eliminate undesirable companies. "Of course, we have lots of discretion too," Lyner added. "We understand banks don't want tattoo parlors and liquor stores."

The company started with receipt-based coupons in 1992, and has expanded to include programmable screens, statement inserts and lobby displays. EFT recently added radio stations to its marketing mix in about 10 markets. "It allows us to be really diversified in what we can offer," Lyner said.

Lyner thinks ATM advertising works best when it reinforces, rather than replaces, other media. "We've set it up as a gradual redemption program. It's a great complement to programs like direct mail, that give you just a quick spike."

Catch 22

While banks own ATMs in high-profile, high-traffic locations, the banking industry is traditionally leery of change. Banks' reticence poses a problem for those trying to broker deals between advertisers and ATM owners.

"Financial institutions are typically the only ATM providers that can provide enough transaction volume for a viable test with large advertisers. But they're slower to buy into the technology," said Gary Walston, president of Dallas-based ATM Advertising Solutions, Inc.

ISOs, on the other hand, are extremely interested in the revenue potential of ATM advertising. But only the largest, like Card Capture Services and Access Cash, offer networks with the kind of concentrated distribution that's attractive to advertisers.

"ISOs have lower-volume machines that, unfortunately, are scattered everywhere," Walston said. "It's difficult to sell even 500 of those machines on a national basis because they're just not concentrated enough. There's no real demographic associated with it."

Walston's company is working with San Diego-based Xtra Cash ATM on a deal involving 180 of its machines in southern California McDonald's restaurants. The machines will feature screen options that allow consumers to select a discount coupon for either the San Diego Zoo or the Wild Animal Park.

Walston said on-demand coupons, which are downloaded electronically and printed on an ATM receipt by a machine's thermal printer, are cheaper and simpler than separately dispensed coupons, which require a separate cassette of their own and must be manually loaded into a machine.

Yet unlike other forms of advertising, dispensed coupons can be used on even a very low-end ATM. Also, Walston said, "a customer has to see it and has to touch it" because it comes out on top of his cash.

When Walston first started in 1996, he sold advertising programs on a local, site-specific basis. He's widened his reach to cut down on labor costs and to offer advertisers better distribution. "Instead of selling 5,000 coupons on one ATM, you can sell 60,000 on 30 ATMs," he said.

Like Union Federal's Pidgeon, Walston believes that more publicity will hasten the medium's acceptance."It may be naive on my part, but I think once a couple articles are published in Ad Age or Ad Week, the interest level from advertisers will snowball," he said.

Included In This Story

---

Diebold Nixdorf

As a global technology leader and innovative services provider, Diebold Nixdorf delivers the solutions that enable financial institutions to improve efficiencies, protect assets and better serve consumers.

Request Info

Learn More