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Screen scene: Can ATMs, POS conquer ad world?

Slowly but surely, ATM advertisements are moving into the 21st century and beyond the arcane text-only messages served up on monochrome screens. In increasing numbers, ATM manufacturers are rolling out terminals capable of producing inviting graphics, sound and flashy ads to rival their TV counterparts.

January 7, 2002

Slowly but surely, ATM advertisements are moving into the 21st century and beyond the arcane text-only messages served up on monochrome screens. In increasing numbers, ATM manufacturers are rolling out terminals capable of producing inviting graphics, sound and flashy ads to rival their TV counterparts.

However, merchants seeking new and creative advertising channels also are watching the evolution of a similar cyber-species: point-of-sale (POS) advertising.

POS terminals (basically debit/credit card scanners found on store counters and in gas station pumps) are becoming increasingly popular portals for quick-hit marketing. Merchants know that customers' eyes wander while waiting in line, so they're replacing LED-display POS terminals with newer ones equipped to show static and full-motion color ads.

Both the new POS displays and those in ATM terminals are employing interactive touch screens. These lead customers to inquire about bargains on goods and services offered either at that store or elsewhere. While ATM customers have always been actively engaged while at the terminal, POS activity has been largely limited to a card swipe. It appears, though, that that's about to change.

Friend or foe?

Does the rise in POS advertising spell competition for ATM owners and advertisers? Probably not, sources say, as long as ATMs continue to evolve into interactive, customer-focused terminals. What's more, they say, owners of both types of terminals should look for collaborative advertising opportunities between the two mediums.

"I think you're going to see the integration of both of them," said Tony Shaw, director of global marketing for Triton, the leading supplier of ATMs to the retail market. "It's certainly a much more cost-effective" and profitable way to run them.

Gary Walston, president of ATM Advertising Solutions, agrees in part. The two mediums first must be properly networked to maximized economies of scale and give advertisers broader market reach. Ultimately where the two mediums will battle a bit, he said, is for advertising dollars.

"They will have to compete against each other for the same media buys," said Walston, whose Dallas-based company develops and implements ATM marketing strategies. "But in the end, there will be some organizations that will be able to pull ATMs, the pump and POS all together, and present that to the advertiser as one package."

Advances in networking, specifically through the Internet, will also allow the mediums to profit together through shared ad revenues. Managing ads from a central location and moving them to multiple places at once will mark the demise of what ATM deployers call "sneakernet," which relies on slow and sometimes unreliable humans to deliver content manually.

Delivering content through remote link-ups is "the way to go," said Antoinette Okon, vice president of sales and marketing of Inter Active Touch MarketingInc. The Coral Gables, Fla.-based company links advertisers and ATM owners and helps provide and manage content via e-mail.

To each his own

Since both ATM and POS advertising are young mediums, operators appear to prefer using the technology they know best. Both serve very different customer needs, making it tricky to compare their strengths and challenges objectively. Still, both have good and bad sides worth noting:

ATM strengths: 

• They can collect detailed information about users.

• ATM visits often precede activities that require cash. And with cash in hand, customers are more prone to act on incentives advertised at the terminal. 

• Native hardware can print coupon incentives. 

• Inside a convenience store or other retailer, ATMs can promote products for purchase at that store during that visit. Said Triton's Shaw, "Convenience stores have a realopportunity to leverage product categories with an ATM. It provides the opportunity to cross promote with POP (point-of-purchase) and do some great things internally." 

• At locations such as shopping malls and airports, "high topper" displays, such as the full-motion video version Triton plans to roll out later this year, can show advertising while the terminal is in use and during downtimes. Passersby are exposed to messages at all times. 

POS strengths:

• POS terminals have an edge in sheer numbers – nearly 4 million in the U.S., versus about 273,000 ATMs. 

• Given that they're almost always placed in a store's check-out lane, traffic potential at POS terminals is higher than at ATMs, thus increasing the number of possible advertising impressions.  

• Since terminals and displays are so compact, they're easily placed right at the point of sale. (ATMs consume valuable floor space). 

• Transaction time in checkout lanes and especially at gas pumps is longer than at an ATM, giving advertisers more time to entice customers. 

• POS terminals are commonly visible to more than just the primary purchaser/user. Others standing nearby in the checkout lane or waiting in the car at the pump can view the advertisement, increasing the number of impressions. 

Both have weaknesses, too. Most ATM visits are predicated on a customer's need for cash. Though frequent, that visit rate is low compared to visits to businesses that use a POS.

Despite the key positioning of POS terminals, 70 percent of all retail transactions still are handled in cash, said Scott Slinker, CEO and president of Ten Square, a POS and ATM ad content delivery firm. That eliminates the advertiser's ability to capture detailed customer information from each transaction. Without detailed demographic information, advertisers must position their messages based on less-targeted profiles.

Slinker said, however, that such details aren't needed when you can effectively gauge traffic value by customer response. "We don't do any profiling on the consumer level, we only do lane demographic profiling," he said.

What Ten Square wants is data showing customer habits (such as going to a gas station at a certain time of day) plus their redemption activity (such as on a coupon for free coffee that was printed at the pump POS terminal).

"So now we know that on Monday, between 2:30 and 3:30 p.m., you came to lane five at Chevron, you picked an offer for Caribou Joe's Coffee, and seven minutes later you went down to Caribou Joe's and redeemed it," Slinker said. "That's a huge amount of marketing information."

Craig Apatov, COO of ePicNetz, which has developed a network for delivery of POS ad content, said that by using unique terminal identification numbers, advertisers can target ads to consumers based on location. So, he said, "You can send an ad for golf shoes to a sporting goods store."

A drawback to ATM ads is the brevity of transaction times. Advertisers get only 10 to 15 seconds to make an impact when a transaction is in progress. And while lengthening that time would boost message exposure, owners won't consider slowing transaction times or risk offending customers with delays.

At POS terminals, on the other hand, customers typically wait one to two minutes in line, and can be exposed to a longer message during that period. That extra time also may be the key to enticing them to act on an offer by touching the screen and prompting it for more information or for a coupon.

The likelihood of this scenario only increases at gas pumps that have interactive POS modules. Here customer captivity lasts about three minutes, the time it takes for a person to exit a car and fill the tank.

"The ATM environment is much more difficult to get your message across because it has less time to do its magic," Slinker said. "And depending on the services you want, ATM machines can be very expensive."

Okon believes that the 10- to 15-second window at an ATM is enough, however, especially when compared to the effectiveness of some other advertising media, such as highway billboards read at 65 mph. "I feel it's a better impact because I'm not walking away from the ATM machine without my money. Whether it takes eight or 10 seconds, I'm staring at the screen because I want my money."

Apatov said certain types of advertising are simply better suited to POS terminals. For instance, he said, merchants could reach potential employees by posting help-wanted ads in their checkout lanes.

Hardware woes

POS and ATM marketing may be part of the wave of the future in advertising, but if owners of both platforms want to ride it, they should prepare for the undertow of expenses that come with upgrading and replacing current models.

Most new machines rolling off the line, according to manufacturers, are Web enabled for improved networking. Additionally, Apatov said, updates and changes of ad content eventually must be done in real time. That, he says, will necessitate costly high-speed data transmission.

"Initially it won't be real-time Internet flow, (content) probably will load daily or hourly," said Apatov, whose company is a subsidiary of leading POS terminal manufacturer Hypercom. In July, ePicNetz announced its partnership with AdForce, a leading provider of Internet advertising. "Over time we want to get the technology to flow real time, but we're not there yet."

Coordinating content delivery won't be easy, said Triton's Shaw, because so many ATM and POS owners are using multiple platforms.

"The whole off-premise ATM industry is only about 7 years old, so it's a very immature industry," Shaw said. "And to do something this new and this broad-based across a very fragmented industry poses some unique challenges."

Web connections also could foster e-commerce transactions, which both POS and ATM owners say they'll consider as long as it doesn't slow the flow of other business.

"You can take them to an HTML-formatted page, but what you can't have is them surfing the Web at your ATM," said Ten Square's Slinker. "That's the wrong place because it violates lane time."

A Web network between merchant partners, however, could foster loyalty programs that go beyond traditional advertising to boost business. Slinker posed this example: If an oil company was tied to a drugstore company that was tied to a supermarket chain that was tied to a video chain, customers could buy products at any of those stores and earn loyalty points to be redeemed for goods at any store in the network.

According to Apatov, advertising is only a small part of what ePicNetz envisions offering to merchants through Hypercom's new Web-enabled ICE terminals. Merchants may be able to use the terminals to track employee time and attendance and even tie them in with a store's payroll processing system, for example. Other possible features include electronic receipt storage and retrieval and UPS and Federal Express tracking.

While only about 50,000 of the installed base of approximately 4 million POS terminals are Internet-ready models, Apatov predicts that number will grow rapidly. "We may be at a million by the end of next year."

Too much information!

With ads running at ATM and POS terminals (news services have even reported that similar electronic ads may soon air in public bathroom stalls), do advertisers risk pushing customers toward information overload?

Yes, said Apatov. "There's always a risk because there's advertising everywhere. But hopefully it has some informational value that's not offensive."

The perception of value, added Okon, is essential to a consumer's acceptance and his or her will to act on it. "If you can give value to my day by helping me save money at the places I go or help me on a personal basis, then I don't mind if (ads) improve my personal quality of life."

ATM Advertising Solutions' Walston said the number of ads at ATM terminals should be limited to one per transaction. That way, the presentation isn't cluttered and recall likelihood goes up.

"The nice thing about the ATM that is different from the POS and the pump is that it's going to have a clean and uncluttered delivery," he said. "ATM owners may want to have one exclusive advertiser in each market area. Then, when the customer puts in a card and gets cash, they see one commercial at that time. They're not inundated with ad after ad, and recall to the consumer is much greater."

Triton's Shaw said customers already are overwhelmed with advertising. What's left, then, is the challenge to make your ads stand apart from the rest. ATMs, POS terminals and other screen-based media may be dynamic enough to do so.

"It becomes a question of differentiating yourself from the pack effectively," Shaw says. "In all that clutter of advertising, the success of (ATM and POS advertising) could be that this is a more effective presentation. And it may stand out for that very reason."

A recent gas pump news broadcast certainly stood out in Doug Rountree's mind after refilling his rental car tank in Green Bay, Wis., last month. Though he saw no ad messages while at the pump and was merely "entertained" by the broadcast, he says he'll return to that station when back in town on business this fall. That's one message all advertisers want to hear.

"As I pumped my gas, I thought, 'This is cool,' " said Rountree, an information services market manager for Louisville-based Humana Inc. "I know that the next time I go back to Green Bay, l'll go back to that station. I sure won't go to the station across the street that doesn't have the CNN."

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