STRATEGIC PARTNERS
An ATM advertising professional shares tips on how to evaluate and sell your network.
October 8, 2000
Time now for the second installment of ATM Advertising 101. The topic for this session is evaluating your ATM network and choosing a selling strategy.
The first step in putting together an effective ATM advertising program is evaluating your portfolio. You must know what you have before you can begin to capitalize on it. You certainly don't have to share all of this information with prospective advertisers, but you need to have it readily available so you can quickly provide pertinent information.
Even if you use a simple Excel spreadsheet, you need an information database to store and organize the following information on a per-ATM basis:
• Site name
• Address -- city, state and zip
• DMA -- designated market area
• Capabilities -- screen, thermal, pre-printed receipt, billboard, topper, etc.
• Venue type I -- eg. grocery store
• Venue type II -- eg. strip mall
• Monthly transaction volume
• Monthly cash withdrawals
• Remote download or sneakernet
• Equipment make and model
• Receipt type and specs
• Software version capable to handle ads
By first breaking down your network in this manner, you have the proper information to decide what you can and can't sell.
When a serious ad prospect wants info, they want complete and accurate information, not an approximation. All too many times someone has told me they have "X" number of machines ready for ATM advertising, when in fact, upon closer examination only about 50 percent of them are truly capable. You must closely track any and all changes that affect any of the above criteria in order to maintain an accurate database.
Now that you know what you have, you can decide on the best means of generating ad revenue. There are two basic strategies for selling ATM advertising: site-specific and local/regional. Contrary to what you may have heard, a national sales strategy is still unrealistic at this time because no single group has enough ATMs with satisfactory transaction volumes in every market in the U.S.
Location, location, location
The site-specific approach to selling ATM advertising provides the best opportunity to maximize ad revenue. Site specific is defined as selling advertising to the merchants and retailers that immediately surround one specific ATM. These merchants are often dry cleaners, delis, auto lube and tune shops, eating establishments, etc.
This strategy can garner large redemption rates because of the proximity and timeliness of the coupon delivery. It can also generate the highest revenue on a per-transaction basis for the group selling the ads. That's because pricing is established on a cost-per-machine basis versus the cost-per-thousand (CPM) basis associated with large media buys typical from ad agencies and big advertisers.
Also, by applying the site-specific approach, you can sell two or three advertisers for each machine to maximize revenues while providing the advertiser with a cost-effective, targeted advertising message.
Strength in numbers
A local or regional selling strategy uses numbers to appeal to advertisers. The local approach combines all the machines you have in one city to sell as one unit. The regional approach simply takes several cities and combines them as one unit. The quantity of machines and transaction volume, along with the group of potential advertisers, changes the dynamics considerably.
The first difference between the two strategies begins with your buyer. The site-specific approach typically means selling to small local merchants. The local/regional approach dictates that you sell to larger local businesses or even national companies with a presence in your market.
Either way, the advertiser will already have had a great deal of experience in buying advertising. And often, the advertiser has an ad agency to handle it for them. Whether you sell directly to the advertiser or through an ad agency, you must now deal with someone who buys advertising on a large scale.
Do the math
These groups buy advertising on a cost-per-thousand basis. Or in the case of the ATM, a cost-per-thousand transactions. An ATM can deliver one impression (or two, in some cases) per transaction.
Unfortunately, by grouping machines together and pricing in a manner to fit your client's needs, we may price ourselves out of the market. Most ATM providers have expectations on how much profit they need per ATM to make ATM advertising work.
The typical retail ATM delivers low transaction volume that makes it more difficult to sell when it must be priced on a CPM basis. We can attempt to sell on a cost-per-machine basis. However, most advertisers figure it out pretty quickly with these simple questions: How many ATMs? How many transactions per ATM? What is the price per ATM? They want to figure out not only how many people they can reach to make an impression, but how much each impression costs.
Here is an example of how it works: Let's say you have 50 ATMs in one city. The machines average approximately 500 transactions per month, so you have 25,000 impressions or transactions to sell to a prospective advertiser.
Assuming you would like to generate $75 per ATM per month from each advertiser, that would put the cost to the advertiser at $3,750 per month. Most advertisers will quickly figure out that their CPM is $150.
That figure is derived this way: The cost ($3,750) divided by the number of impressions (25,000) equals a cost-per-impression of 15 cents. That may not sound like a lot on a per-transaction basis, but advertisers buy media in "thousands." So, multiple the 15 cents per transaction by 1,000 to arrive at a cost-per-thousand (CPM) of $150. That is a very high when compared to other forms of advertising.
As mentioned in my previous article, we are creating a new medium that also requires us to create demand for a new product. If we price our product too high, we create a compelling reason for a prospective advertiser to stick with the tried-and-true old ways of advertising.
Once we have a successful track record that can be proven through case studies and references, we will have factual results to help sell, increase demand and get closer to the real value associated with this targeted and captive medium.
Gary Walston is president of ATM Advertising Solutions, Inc., a privately-held company that develops, brokers and coordinates the sale of advertising distributed exclusively through ATMs. The company has access to financial institution and independent ATMs in key markets throughout the U.S. ATM Advertising Solutions, Inc. participates in research and development efforts within the industry, in addition to educating, consulting with and training all interested parties as to the opportunities and challenges that are inherent in the new medium.
Contact Walston at 281-292-9100 or garywalston@atmadvertising.com.
