STRATEGIC PARTNERS
Your television doesn't know who you are. Neither does your radio, or the billboard you pass on the way to work each morning. Your ATM, however, knows your name. It also knows how much money you have in the bank, how much you paid for your home and other key demographic details.
September 10, 2002
Your television doesn't know who you are. Neither does your radio, or the billboard you pass on the way to work each morning.
Your ATM, however, knows your name. It also knows how much money you have in the bank, how much you paid for your home and other key demographic details.
As ATMs become more sophisticated, they're getting to know you even better -- right down to the amount of cash you withdraw from them most often.
Because of the close -- if not downright cozy -- relationship that most consumers have with ATMs, financial institutions increasingly see them as a great place to market themselves.
A Celent Communications report, "Advanced Functionality ATMs: The Next Generation," identified both cross-selling and one-to-one marketing as among the leading drivers for financial institutions to adopt advanced ATM functionality. Sixty-three percent of consumers in another recent Celent report, "Channels: Which One Owns the Customer?" selected the ATM as the channel they used most often to complete banking transactions. Only 7 percent selected the branch, the place where financial institutions have historically focused efforts to promote their own products and services.
FleetBoston Financial's 3,700 ATMs generate 18 to 25 million transactions a month. Nandita Bakhshi, director of Fleet's Deposit/Payment Products group, said it's hard to ignore numbers like that.
"If there is another ATM killer app beyond cash dispensing, I think it is perhaps one-to-one marketing," she said.
Response time
In late 2001 and early 2002 Boston-based Fleet presented a credit card offer to some 320,000 pre-approved customers at 200 of its ATMs in the Boston and New York City areas.
Customers viewed an ad during the "please wait" portion of the transaction, then chose from three options: "ask me later," which resulted in a follow-up phone call from a sales representative; "don't show me this offer again," which blocked future promotional messages; or "yes," which allowed the customer to accept the offer -- after viewing three screens of disclosures. Those who accepted the offer were mailed a card within five to seven business days.
Slightly more than 1 percent accepted the card, a rate that Bakhshi said was comparable to direct mail campaigns -- and at a lower cost to Fleet. Another 1.8 percent chose "ask me later," though Bakhshi didn't provide figures for how many of the follow-up calls resulted in sales.
Bakhshi said Fleet has long considered the ATM screen valuable "shelf space" to promote its own products and services -- including the advanced functionality it is rolling out on its ATMs.
Each time Fleet has run ATM ads, Bakhshi said, the bank has experienced a spike in those transactions. Usage of the Fleet Cash feature, which allows ATM users to pre-select their most common cash withdrawal amount, rose when Fleet began highlighting it on "please wait" screens.
"It's not always about sales; it's also a great opportunity to share information," she said.
Keeping it in-house
While much of the initial interest in ATM advertising centered on the possibility of earning revenue from selling ads to third-party companies, many financial institutions -- including Fleet -- now seem more interested in upselling their own customers.
Despite the promising results Fleet experienced after a full-motion video ATM advertising pilot with Theatre.com (See related story Moving pictures) in the summer of 2000 (including a 74 percent recall rate for the ads), Bakhshi said the bank has opted to move forward with only its own ads -- at least for now.
"After the pilot, we knew advertising worked," she said. "It all came down to whether we wanted to sell that space and make a few bucks or make a bigger play and talk about our own products and services."
Wells Fargo, which advertised its own products and services at the ATM as early as 1998 and was one of the first ATM deployers to run third-party ATM advertisements in 1999, has adopted a similar strategy. Jonathan Velline, the San Francisco-based bank's senior vice president of ATM Banking and Market Area Analysis, said the only third-party ads currently appearing on Wells Fargo ATMs are public service announcements.
Velline said that when customers were surveyed, their responses to advertisements for bank products were "more robust" than their responses to ads for third-party products.
"They're at the ATM to do a banking transaction, and they're in a banking frame of mind. It's a logical time to talk to them about bank products," he said. "An ad for a movie or another third party is just not as relevant to them at that time."
Bank of America is running both third-party advertisements, for AOL/Time Warner properties (See related story This is CNN…at an ATM near you), and general bank advertisements at 2,000 ATMs in California.
BofA spokesperson Lisa Gagnon said it's likely that the bank will continue running both internal and external ads at its ATMs, based on customer feedback. According to Gagnon, more than 90 percent of customers surveyed by BofA had a neutral to positive attitude about ATM advertising. Bank products were among the three areas customers were most interested in, along with travel/entertainment and computer/electronic products and services.
Both Fleet and Wells Fargo, like BofA, report that their customers have a generally positive attitude toward ATM advertising. Velline said Wells does not allow its ads to intrude with transactions. "We never make someone wait. If a transaction comes back from the host before an ad is finished, we interrupt the ad."
Getting to sell you
In the Southeast, Bank of America is running targeted ads for bank products and services at 540 ATMs that have been upgraded with a Windows NT-based operating system. At those ATMs, the machine identifies a customer using his card number, and sends him a targeted ad during the "please wait" portion of the transaction.
Wells Fargo is running targeted advertisements for bank products and services at 2,500 of its ATMs in 23 states. As with the BofA ATMs, the machine identifies the customer, then sends him a targeted ad. About 15 ads are stored at the ATM and are rotated every few months, Velline said.
Wells Fargo uses two different strategies with its targeted ads, Velline said. Some, for what he calls "more complicated products" like home equity loans, are designed to build awareness and generate bank follow-up. Others, for services such as overdraft protection, can be fulfilled at the ATM.
"If you know a customer is overdrawn, that's obviously a great time to throw up an ad for overdraft protection," Velline said.
Adding horsepower
All of Wells Fargo's 6,400 ATMs offer some type of advertising capability, but Velline said the 2,500 machines that Wells has converted to a Windows NT platform have made it easier to quantify results.
While customer response to ads varies widely depending upon the ad, the audience being targeted and whether it's part of a larger campaign, Velline said overall results have been strong. "We've always thought that ATM advertising would be successful at some level, but the ability to measure response has given us more confidence in making the business case."
In the first quarter of 2001, for example, an ad appeared on "please wait" screens at 300 ATMs in California inviting Wells customers without an online bank account to visit Wells Fargo's Web site and enroll in its online banking program. The rate of enrollment for customers who saw the ads was "significantly higher" than that of those who didn't see the ads, Velline said.
The cost of ATM campaigns is "marginal" when compared to direct mail and other more traditional media, Velline said. "With even a small response, you get a positive return on investment."
Like Wells Fargo and Bank of America, Fleet will continue to refine its advertising efforts as it upgrades its ATMs. The bank currently has 30 Windows NT-based ATMs, with plans to grow that number to 175 by the end of this year. Moving to a Web-enabled platform will make it possible for Fleet to run a single campaign on more ATMs, add multiple campaigns to ATMs and "plug and play" into its data warehouse, Bakhshi said.
