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An ATM advertising pilot by the UK's Nationwide Building Society yields some promising results.

January 7, 2002

While ATM advertising is far from widespread in the U.S., it's even less common overseas. So the Nationwide Building Society may have felt like it was taking a shot in the dark when it became the UK's first ATM owner to run an ad campaign on one of its machines.

Yet based on early results from the recent two-month advertising pilot, conducted on an ATM at Bristol Airport, the experiment was right on target.

A whopping 69 percent of customers who used Nationwide's machine during the pilot said they were "delighted" or "very satisfied" with an ATM experience that included advertising. Sixty-four percent found it acceptable to view non-bank related ads on the ATM; 10 percent were more likely to visit Thomas Cook, the featured advertiser, as a result of the ads.

During the trial, Nationwide promoted its own travel insurance program with graphics during the "please wait" portion of the transaction and ran a 30-second video advertising Thomas Cook's foreign currency exchange on the "welcome" screen.

The UK's ninth-largest retail banking, saving and lending organization by asset size, Nationwide has a network of 1,500 machines, 430 of which are in non-bank locations.

Unlike many U.S. ATM owners, a significant number of Nationwide's machines are outfitted with advertising-friendly bells and whistles such as color screens and audio capabilities, a result of the financial institution's move toward an NT-based platform. About half of Nationwide's ATMs are NCR Personas models, according to Kevin Scott-Evans, the financial institution's self-service banking controller.

"We're trying to standardize our entire network on an NT base," he said. "All of our branch and administrative PCs are NT-based, and the ATMs were out of line."

The move to NT may result in more experiments with advanced ATM functionality. Scott-Evans said a test of Web-enabled transactions would be a logical next step because of Nationwide's approximately 250,000 online banking customers.

Although coupons weren't part of the advertising pilot, Nationwide is interested in offering them in the future, largely because of the ability to track customer response to ads. Perceived benefit to the customer is also important, Scott-Evans said, noting that 66 percent of ATM users questioned by Nationwide said they would find the issuing of coupons "useful."

An outside firm, I-Design,created the ads and lined up Thomas Cook as an advertiser. Scott-Evans said Nationwide was comfortable outsourcing these aspects of the program. "Clearly we don't have a lot of expertise in recruiting third-party advertisers."

Cross-selling bank products such as the travel insurance is a "priority," Scott-Evans said, "but our minds are open to whatever's best for Nationwide and its customers."

Scott-Evans believes that UK financial institutions like Nationwide may adopt ATM advertising more readily than their American counterparts because of their decision not to surcharge customers. "We have to look for other ways to remain competitive in the marketplace," he said.

Scott-Evans said that while Nationwide wants to be "reasonably cautious as we take (ATM advertising) forward," it doesn't want to lose its early adopter advantage. "We want to exploit the opportunity that's there and the advantage that we've got."

According to Nationwide spokesperson Jennifer Stoddart, Nationwide is "pursuing this innovation with other third parties" but isn't yet ready to release details.