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An agency perspective

While few advertising agencies have direct experience with ATM advertising, the ones that do believe this new industry needs more historical and statistical data to help it get off the ground. ATMmarketplace talked with three agencies to see what ATM owners must do to generate ad revenue.

January 16, 2002

Perhaps the biggest hurdle facing ATM owners in selling advertising is justifying its value to the people who buy traditional advertising, like television, radio and billboards. ATMmarketplace asked three agency execs what they thought of advertising on ATMs.

Stephen Weinstein, Ogilvy & Mather Advertising and Public Relations

One of the world's largest advertising agencies, Ogilvy & Mather is not an agency to ignore an up-and-coming new medium. With clients such as American Express, IBM and Ford Motor Co., the 53-year-old advertising agency is headquartered in New York and works with Fortune Global 500 companies in more than five countries.

Stephen Weinstein, a partner and account supervisor, said advertisers are hesitant to put a lot of effort into the unproven medium of ATM advertising.

"Because it's a new venture, a lot of advertisers don't want to be the first person to be doing something. They want to make sure that it's proven, and it works," Weinstein said. "So, a lot of these companies have to get their entire act together from start to finish with how they're going to sell, track and measure it. If they don't deliver what they say they'll deliver, how are they going to make good to advertisers? All those elements are important to have in order to make companies feel comfortable about how they're going to do that."

He believes more tracking and statistics on ATM advertising will help gather momentum for the medium.

Weinstein, who has been involved in ATM advertising in convenience stores, said the real strength of the medium is at the point-of-purchase. He said ATM advertising can be viable to support a well-known product's brand as additional exposure in a store.

"It's a natural for soda, beer, snacks and gum, basically any product sold in a convenience store - the lottery. These advertisers would want to be on these machines to have great added exposure in an environment where their product is actually sold. Point-of-purchase--you can't get any better than that," Weinstein said. "Especially in this day and age where everyone's advertising budget is shrinking. A media planner is trying to find ways to really hit a target audience and really have an impact."

Weinstein's first encounter with ATM advertising came last fall, when he was involved in setting up a pilot project with ATM manufacturer Triton Systems Inc. Ogilvy & Mather is helping Long Beach, Miss.-based Triton execute the pilot using ATM toppers on off-premise ATMs. Secora, a St. Louis based ATM advertising agency in which Triton holds a majority interest, is also participating.

Weinstein, based in Atlanta, helped the companies launch the advertising pilot the first week in March. The pilot, scheduled to run through the end of this summer, involves using full motion video (FMV) on ATMs throughout the country.

Weinstein said the pilot will show what kind of results ATM advertising can provide and will study the behavior of ATM users who see the ads.

"You can't really measure the effectiveness of a 30-second commercial on television for really stimulating someone to go buy something. You may have a better shot if you know who your target is and where they are shopping," Weinstein said.

Weinstein said the agency has considered other ATM advertising projects, though none have moved forward.

"We thought about using airport ATMs for hotel clients that we've had, but it's never come to fruition. However, it made it into consideration as a way to reach business travelers," Weinstein said.

He said the problem was a familiar one to ATM owners who have studied the issue. There are no ATM networks with the kind of numbers needed to give a significant impression.

"There was no one out there that could really put the machines together or sell us what we were looking for," Weinstein explained.

Weinstein said his agency has sought out research and media kits about ATM advertising but has yet to have an ATM ad agency or broker present a package to the company.

Weinstein said it's likely that national advertisers will buy ATM advertising in local markets.

"At this point, it's still in its infancy. I think there's a lot of companies out there trying to figure out what to do and how to make it work, but I don't feel like anyone's captured the market for advertising on ATMs. I don't think any of the major agencies have done a tremendous amount with it. Companies more willing to take risks and think outside of the box will be jumping on it sooner."

Don Jarecki, CashPoint

Don Jarecki is a pioneer in the ATM advertising industry. Jarecki, now vice president of network development at CashPoint, an ATM advertising company, rolled out the first full motion video (FMV) ATM advertising pilot in 1997 for Electronic Data Systems (EDS) in Southern California.

Jarecki, who has a decade of experience in the ATM electronic banking industry, said that ATM advertising offers something unique.

"ATMs are really the only medium out there that can combine print and electronic placed space advertising. It is a very powerful combination," Jarecki said. "When you can combine the receipt with a media rich visual, whether it's a four-color static screen with a voice over or an MPEG video, and some type of printed reinforcement, whether it's a URL or a branded message, that's very powerful. Some of the advertisers that we've talked to see the advantage of that."

However, Jarecki points out that delivering ATM advertising this way is difficult. He said ATMs must integrate electronic messages similar to other mediums, such as offering a schedule of 15-second video spots.

"If everyone would agree to upgrade their ATMs and offer the economic way to deliver the ads in a media-rich, content-based delivery, I think ATM advertising would take off like nobody's business," Jarecki said. "You still have people on the fence. Some groups are waiting for others, and other financial institutions are still trying to decide whether they want to offer third-party advertising yet."

According to Jarecki, ATM advertising provides direct revenue for machine upgrades. He believes more bank ATMs will upgrade their terminals due in part to ADA guidelines.

"ATM advertising is going to be led by the financial institutions. They have the transaction volume. Financial institutions are in the best position to make ATM advertising work. They have the ability to closely target their own customers because of the data they hold," Jarecki said.

Jarecki said Customer Relationship Management (CRM) technology, which gathers demographic information about consumers, will play a crucial role in the success of the industry. In fact, CashPoint's business platform is offering marketing through better data.

"That's where you're going to get an advertiser willing to spend more. The advertiser is going to pay a higher rate if he's able to target his message to a very narrowly defined core group of customers that he knows is predisposed to buying his product," Jarecki said.

Otherwise, he said advertisers run the risk of buying impressions that don't fit the demographic target.

"If they're marketing "My Best Friend's Wedding" versus "Armageddon," and they're buying an ATM advertising market in Los Angeles, for example, where we ran the video advertising program when I was with EDS, we couldn't differentiate gender. So, if you want to advertise "My Best Friend's Wedding," it just goes out there for the whole run," Jarecki said.

Jarecki said quantifiable success stories are needed to push demand for ATM advertising. Overall, he thinks the medium has a bright future. "I think it will establish itself. It's going to take a little time."

Tom Walthall, Doe-Anderson Advertising and Public Relations

Doe-Anderson Inc.,based in Louisville, Ky., has dabbled in ATM advertising projects, according to vice president group media director Tom Walthall.

Walthall said the key to a successful ATM advertising campaign is to offer a printed-out promotion or discount with the product. Walthall believes there are real opportunities to target impulse buys.

"If you're stopping at a convenience store or gas station and you see the message on-screen for Coca-Cola or a Snickers bar and you get your receipt and there's some type of offer in regards to buy a Coke and a Snickers and save 50 cents or something, I think there's some real opportunity there," Walthall said.

Walthall said immediate customer response is a benefit of point-of-purchase ATM advertising. He adds that it's also a good way to help track results, while gaining exposure to a brand.

Last June, Walthall worked with EMAZING.com, an online publisher of free topic-oriented e-mails, in a test market using a combination of on-screen and on-receipt advertising.

The campaign, inviting ATM users to participate in the Web site's Pop Culture Challenge trivia contest, ran on 100 ATMs in Indianapolis. EMAZING used Access Cash machines, which averaged 500 monthly transactions.

The on-screen and receipt advertising directed consumers to a specific URL, unique to the ATM promotion. The goal was to track how many people entered the site and subscribed to the service.

"Overall, we were pleased with the effort. It positioned EMAZING.com in a medium that had not been overwrought with dot-com advertising. It helped to position us a little differently in the market than maybe some other dot-coms had," Walthall said.

Unfortunately, tracking statistics for the test were lost due to a glitch in the measuring mechanism. The URL was inadvertently linked to another promotion outside of the ATM advertising test market.

An EMAZING, Inc. executive said the ATM advertising test market was not successful enough to further continue using the medium.

According to Walthall, EMAZING paid a premium cost per thousand (CPM) - significantly higher than other comparable out-of-home media, such as billboards and bus banners. He wouldn't release specific numbers, but said the cost was in the higher double digits. He said the high CPM must come down before ATM advertising gains acceptance.

"As we take ATM ideas to clients, they've been receptive and willing to listen, and they're familiar with ATM advertising. They've been exposed to it. They understand what it is, but getting into how it works and how it's paid for and the options in regards to being able to switch out ads and rotate ads and things like that. It is an educational process for all of us, because technology continues to change," Walthall said.

Doe-Anderson has considered other ATM advertising for clients. Walthall has considered wraps and toppers, but not as a real alternative. He said a more interactive experience for the consumer is more important.

The agency considered working with a company that provides networks of ATMs to advertise for Ebonite International, a bowling ball manufacturer. According to Walthall, the ATM company had a network of machines in AMF bowling centers throughout the country. The idea was to place ATM ads at bowling centers, but the plan did not materialize.

For a new business opportunity, Doe-Anderson wanted to target residents in the Commonwealth of Kentucky. The agency wanted to put together a network of Kentucky ATMs with available ad space. But it found that no such network exists.

"The agency is looking for ways to position our clients in front of consumers that the consumers aren't expecting. I think that's what's really been driving us in the area of ATM opportunities," Walthall said.

But, Walthall said the downturn in the economy will work against new advertising media such as ATMs.

"I think advertising in general is going to suffer. All media vehicles are going to suffer. Obviously, those media vehicles in their infancy stage probably are going to experience more challenges and more difficulties than more established vehicles," Walthall said. "Advertisers right now are going to fall back to a defense mode."

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