Article

The power--and profit--of ATM video advertising

'Broadcast TV has lost its luster. We're hoping to fill that void,' says a pioneer in full-motion video ATM advertising. by Kevin Gibson, contributing writer

May 23, 1998

When Electronic Data Systems late last year introduced full-motion, color video screens attached to ATMs located at several 7-11 food marts, it was a market test with enough potential to alter the future of the ATM industry. The British art film "The Full Monty" was one of the products advertised in those early 15-second spots. Like the film, the new multimedia ATMs were a huge success. Now the ATM with an attached "topper"--a large, color screen viewable by everyone nearby--represents the future of the automated teller machine. Dr. Ernest Burdette, president of Triton, said convenience stores are but one promising outlet for this kind of technology. Malls and department stores also are potential locations, and he said video store chains and even bowling alleys have shown interest. "If you think about a bowling alley, you're looking at a broad range of items you're trying to sell," he said. "It's an entertainment location." Think of the possibilities: bowling supplies, food and beverages, billiards, even video games. The list gets longer at other locations. "I think also in the convenience stores we should expect to see considerable interest," Burdette said. "They've got this array of different brands, and to have one drink or snack food brand that can advertise with motion video" makes for a powerful advertising vehicle. Randy Andrews, president of Portland-based ATM Resources, added fast food chains, truck stops, mini-markets, grocery chains and large retail chains to the list of possibilities. He pointed to the EDS experiment, and noted that more and more gasoline pumps with graphic screens will be popping up in the near future. They are already plentiful in the southeastern United States, he said. Don Jarecki, president of retail terminal services for EDS, said the pilot program his company initiated around Christmas time last year featured 15-second spots on full motion ATMs video screens inside 7-11 stores. "The intent was to see how the consumer reacted to it and how the advertising community accepted the new medium," he said. "When we looked at the results, it was very successful. We got a lot if interest from the advertising community." And EDS wasn't conservative in its experiment. The company didn't want to extend the transaction time, but it also didn't want a simple flat image that encouraged the consumer to buy a soft drink. "We wanted something dynamic," Jarecki said. They got it, and the movie promotions served the experiment well. The concept now is moving quickly across the United States. Jarecki said that while so far the ads have been installed via "sneakernet" (by manually inserting the software into the machine), the plan is to feed the ads to each machine via satellite. That's already in the works, he said: San Diego-area ATMs are ready, Chicago is in the latter stages of installation of the satellite technology, and Los Angeles should be ready by Thanksgiving. Jarecki said New York is next on the list, and "by January 1999 we will have four major markets that will be video-advertising-ready." And that should be doubled by this time next year, he said. He foresees 2500 to 3000 ATMs with satellite feeds and multimedia technology by the end of 1999 as opposed to the 1200 expected to be in place by this coming January. Finding the advertisers While no one in the industry is ready to throw out names of national advertisers who are ready to sign on the dotted line, it has been noted that major movie companies and at least one record company is interested. The key to selling these ads is in the numbers. Already, networks of ATM owners are forming in order to sell more and more ads to bigger and bigger advertisers. Andrews said acceptance of the technology has developed and grown through the efforts of advertising agencies by educating a national advertising client base, and by binding together networks to advertise under one agency's portfolio. "For instance," Andrews said, "if you walk up to Coca-Cola and say you have 500 ATMs they can advertise through, they don't hear that, but if you can say you've got 5,000 ATMs...." Strength in numbers, in other words. In some ways, utilizing this technology could be considered reactionary. Burdette said ATM saturation has more or less forced the industry as a whole to look at new means of revenue. "The number of ATMs deployed has grown faster than the total ATM transaction volume," he said. "That has gone on for couple of years now." That saturation has some ATM owners being cautious about making new investments. Robert Rhodes, who oversees ATM deployment for Provident Bank, agrees that multimedia technology is the future of the industry, but he isn't going to jump on the boat until he's sure it's watertight. "It's a bit premature," he said. "The problem is it's an extremely complex industry. Right at the moment, it's badly fragmented--people go out and sell things they can't deliver, and a lot of it is not deliberate, it's just that some people don't understand the total business and what it takes to put together something that is sound business activity. "It's wonderful to go out and say, 'Gee, I sold 500 ATM installations today,' but depending on the level of transactions, you may be looking at $40,000 in vault cash. You have to have plenty in the machine in order for people to take it out." For example, Rhodes said he sees proposals in which a prospective ATM owner hasn't set aside reserve funds for maintaining the machinery. He also sees plenty of bad placement, and a bad location can spell certain doom for any ATM, regardless of its multimedia capabilities. "Banks, for example, say, 'Gee, isn't this wonderful?' They go out and put ATMs anyplace anybody will take them. To me it just doesn't make any sense to do that. The key to it is to put machines in places where people who use that kind of machine are." For instance, he said, Sack's Fifth Avenue is probably not a good place, no matter how much money changes hands there over the course of a day. "Those shoppers don't take cash out of ATMs in order to make purchases." And would those consumers stop to watch a video clip from "The Full Monty?" Burdette anticipates his company filling numerous orders for multimedia-equipped ATMs in the near future, simply because it makes financial sense. "In the end, it represents a revenue opportunity for the site owner. With transaction volume declining all over country, it is important to have ways to support that site." The earliest multimedia ATMs had one screen to capture the attention of the person using the machine. The evolution was to machines with toppers, a large screen above the ATM to attract the attention of the user and anyone else in the vicinity. The ultimate goal is mass customization, according to Jarecki, perhaps even to the point of making the technology interactive so that an ATM user could actually access a certain product at the same time he or she makes a withdrawal. Certain networks won't allow advertising for certain products--for instance, a Bank One ATM won't want another bank's advertising targeted to its customers--but Jarecki said he looks for certain levels of specific targeting within the next year. Its time has come, he believes. "Broadcast TV has lost its luster. We're hoping to fill that void," he said. And if the ability to target individuals becomes a reality, Jarecki believes it could be a far stronger advertising outlet than television. "The ultimate market niche is a market of one," he said. >Sources: • Dr. Ernest Burdette, president of Triton, can be reached at (228) 868-1317. • Randy Andrews, president of ATM Resources, can be reached at (800) 808-0699, e-mail msnpanda@msn.com. • Don Jarecki, president of retail terminal services for EDS, can be reached at (973) 682-5634.