ATM ADVERTISING: Fortune tellers - Bankers such as Wells Fargo's John Nicholson (right) are waking up to the ad-space potential of ATM screens. After all, users have to stare at something while they wait for their cash

Despite the relative youth of advertising at cashpoint machines -

both in the UK and the US - broker Gary Walston is already sure he is

backing a winner. 'It's pure common sense,' he says. 'As an advertiser,

you are reaching a captive audience. No one turns their back on an ATM

(automated teller machine). Customers are out in the marketplace getting

money and, as an advertiser, you can combine a branding piece on the

screen with an actionable piece on the back of the receipt.'

Nick Seddon, media services manager at Moneybox Corporation, the UK's

largest independent deployer of privately owned cash machines,


'We put brands in the forefront of consumers' minds when they have cash

in their hands,' he says. 'Not only that, but most of our 1,200 cash

machines are located in convenience stores, and we know that a

proportion of the cash taken out is used over the counter - store owners

have reported a 15 per cent increase in sales when they host our

machines. If brands that are actually in the store, stocked a few feet

away from the cash machine, take advertising, that has to push sales.'

The company, which launched its cash machine advertising offer last

month, is currently completing a trial with Associated Newspapers.

However, what might appear common sense to those pushing ATM advertising

has not always been obvious to others. In fact, 30 years passed between

the birth of the ATM and the first on-screen ads in the US. When banks

originally introduced ATMs, they hoped that the convenience of the

machines would boost customer loyalty, while enabling branches to cut

costs. Today, cash points can be a bank's only physical point of contact

with its customers, as is the case with E*TRADE.

With their ATMs playing such an important primary role, banks were

initially reluctant to mess with what they saw as a winning formula by

advertising anything other than their own financial products and

services. Walston explains: 'ATM advertising is still way down the list

of priorities among most banks as a means of generating more revenue.

But independent groups with newer machines are more keen to make

supplementary revenue from advertising.

The problem there, however, is that they are just too spread out, making

for media buys that are very fragmented.'

Without help from the banks, then, Walston's ATM Advertising Solutions

and the other would-be DoubleClicks of the ATM world would be forever

stymied, unable to reap the advertising potential of the 225,000 ATMs in

the US alone that the average cardholder visits once a week. In the UK,

cash machine advertising is very much in its infancy. Nationwide

conducted a trial in Bristol airport using one cash machine showing a

Thomas Cook video advertisement in partnership with relationship

technology company ACR. Of the 150 customers who used the ATM, 69 per

cent said they were happy to see ads, while 10 per cent were more likely

to visit Thomas Cook as a result. Jim Piggot, vice-president of software

and services at ACR, explains that only early adopters in the UK are

using ATM advertising at the moment. 'Nationwide has a partnership with

Marks & Spencer, and it is easy to imagine M&S using its in-store ATMs

to highlight particular products,' he says.

In the US, the market is growing. John Nicholson, vice-president of

marketing, ATM banking, at US bank Wells Fargo, comments: 'It's actually

something which we've thought about for a long time, because of the

ubiquity of our ATMs and the fact that bank customers are a desirable

target group for advertisers.' With around 10 years' experience of the

ATM business behind him, Nicholson has adopted a more aggressive

approach than his conservative counterparts at other banks.

Since running a pilot program in April of 1999, Wells Fargo has already

expanded advertising to half of its 6,000-plus ATMs. The remainder

should have advertising by the end of the year. Nicholson knows that if

other banks follow suit, the ATM industry could build a medium with the

guaranteed attention of almost every member of the spending public - a

medium that has all the reach of television, but without an option for

the user to change channels during commercials.

First, however, Nicholson had to avoid damaging his bank's brand. His

group made sure that advertising would not be detrimental to the

cardholder's experience. 'Market research with customers says 'as long

as you don't prolong my ATM transaction, I don't have an issue with your

putting an ad in front of me',' he says. 'And if that ad has some kind

of special offer, then their interest rises.'

Consequently, Wells Fargo has devised a format with three opportunities

for an advertiser to grab the attention of the cardholder during each

transaction. 'We offer ad spot one, which is what's on the screen as you

approach the ATM; ad spot two, which is what you see while your

transaction is processing and you're waiting for your cash; and we also

offer the printed receipt,' says Nicholson. This is similar to Moneybox,

which offers animated ads during the welcome sequence, the main menu

sequence, the 'please wait' page or the final screen, as well as printed

vouchers or receipts.

Wells Fargo's ATM receipts are printed with a four-colour process and

are dispensed ad-side up. To see their account information, cardholders

have to take the receipts and turn them over. Nicholson isn't entirely

sure about the length of time a cardholder might see an ad. Each

transaction might take anywhere from a few seconds to 15 seconds or

more. It can depend on the time of day and the load on the bank's

communications network. 'We've just begun a study where we are

time-stamping every transaction,' he says.

'So we'll be able to give advertisers information on that soon.'

Variable transaction times and, thus, exposure, is just one reason why

existing ATMs are not a perfect advertising medium. Another limitation

is their technology. Because ATMs were designed solely for dispensing

cash, most machines in operation are extremely simple with often archaic

operating systems. Consequently, most machines can only run simple

static, or crudely animated, images. But the web has added a whole range

of capabilities to the ATM in the same way that it has made home banking

a possibility.

In its home base of San Francisco, Wells Fargo has 300 new ATMs that use

web technology to the hilt. Touch screens show pages coded in html (the

same as most web pages), and the ATMs communicate using internet

protocols. They can also run full-motion video ads. Advertising

instructions and creative can be updated online, although some older

machines require a manual update by the insertion of a disk.

ATMs using web technology have fired the imagination of the brokers that

sell space for the banks and independent e operators. And almost all ad

space is sold by these brokers. 'We're not experts at selling media, so

we leave that to those with the knowledge and experience,' says


Walston agrees. 'There are some ATM owners that have tried to sell the

space themselves,' he says, 'but they soon realised that it's easier to

find the right third party to do it.'

Brokers have used their expertise and combined it with feedback from

advertisers and their agencies to help shape new developments in ATM


By far the most significant of these is the use of cardholder

information as a basis for targeting ads. This fulfils advertisers'

demands for more accurate media placement. Targeting based on cardholder

information is seen as something of a Holy Grail among the brokers of

ATM ad space, the key that will unlock a bottomless treasure chest of ad

revenue. 'The more focused you can make your campaign, the more you can

charge potential customers,' says Piggot.

Wells Fargo is already using cardholders' addresses as the basis for

targeting ads as part of a pilot program on its 300 high-tech ATMs. The

goal is to cross-sell bank products to existing customers.

When a customer swipes a card, the ATM looks up the full nine-digit post

code (known as ZIP+4) to which the customer's bank statement is sent. By

running the postcode through the Claritas PRIZM database, Wells Fargo is

able to ascertain each cardholder's likely purchasing behaviour, and

select an ad accordingly.

The PRIZM database is something of an industry standard for consumer

packaged goods marketers looking to target their ad spend geographically

in the US. Based on 1990 census data, current-year demographics and data

from millions of consumer purchase records, PRIZM defines every US

neighbourhood in terms of demographically and behaviourally distinct

types or 'clusters'.

For instance, a person living in San Francisco's North Beach

neighbourhood might be defined as likely to be one of the 'Young

Literati', upscale professional urban singles and couples. On average,

there are only 11 households for each ZIP+4, offering targeting with the

precision of a direct mail list.

Wells Fargo's system might be the state of the art for ATM advertising,

but JJ Manning of Seattle-based Cashpoint thinks he can go one better.

Cashpoint's online database aggregates more than 20,000 ATMs into an

advertising network. It aims to offer postcode targeting of the

customers across all banks in its network. 'Wells Fargo has implemented

its own system,' says Manning, 'but we're in the labs of a number of

other banks. We're categorising individuals after recognising them at

the card swipe.'

But what of consumer privacy? Nicholson is adamant that no private

consumer information will be passed on to the advertiser. 'It's one

thing for us to have an ad that's directed to a customer, it's a

completely separate thing to provide any customer information to a third

party, and we wouldn't do any of that,' he says. The customer's postcode

will be used for looking up PRIZM data, but won't be revealed to

advertisers. 'The third party might know they were reaching a certain

number of people that met a certain demographic characteristic, but they

would not have cardholders' names or addresses, or any of that kind of

information,' he adds.

US consumers, however, might not split hairs the same way. They have an

expectation of privacy, thanks to The Financial Services Modernisation

Act, aka. the Gramm-Leach-Bliley Act, which passed into law last


Section 502 states: 'It is the policy of the Congress that each

financial institution has an affirmative and continuing obligation to

respect the privacy of its customers and to protect the security and

confidentiality of those customers' non-public personal information.'

Certainly, banks can maintain that ZIP+4 doesn't count as non-public

information. Privacy advocates, on the other hand, do not. 'They're not

giving customers the ability to say no to being fed these ads,' says

Beth Givens, director of the Privacy Rights Clearinghouse, a non-profit,

consumer information and advocacy programme based in San Diego. 'This is

just more evidence that banks have very little interest in honouring the

spirit of the new financial privacy legislation, if not the letter of

the law,' she says.

Just how far banks and ad brokers push privacy to deliver accurate

targeting remains to be seen. Certainly, the brands being advertised are

not expecting to suffer from being involved in any kind of privacy

backlash: the targeting mechanism is merely a response to demand from

brand marketers who already use PRIZM for many other efforts. And by

combining branding, targeting and guaranteed attention, Manning hopes to

sell a lot of ad space, including Wells Fargo's. 'Ad revenue might be

slowing down in the dotcom world,' he says, 'but we don't believe

there's another medium comparable to ATMs. And we're confident of

getting the slice we deserve from the advertising pie.'

'ATM advertising is just about to explode in the UK,' comments

Moneybox's Simmons. 'I believe that once companies like us have shown

them that it works, banks will take this on board and move forward with



For its '24x7xCompaq' campaign in the US, Compaq got creative with its

media placements. The dollars40 million (pounds 27.3m) effort leaned

heavily toward innovative outdoor media. Alongside bus and taxi wraps,

and even a flying billboard over Wall Street, came ATMs.

'Compaq's agency at the time, DDB Needham, was exploring some

alternative placements,' says ATM Advertising president Mike Szimanski.

'We'd presented to them a couple of times about ATMs and they made a

two-month buy in six major markets.' As well as being innovative, the

24/7 nature of ATMs resonated well with the campaign's aim to highlight

Compaq's reliability in make-or-break situations.

Compaq spent dollars 325,000 (pounds 220,000) on what is the biggest ATM

ad buy so far. The campaign ran on more than 1,700 ATMs, making it one

of the first campaigns to run simultaneously on the ATMs of different

banks and independent owners.

But the motive for choosing ATMs might have gone beyond fulfiling

campaign goals. Since acquiring enterprise computing supplier Digital,

Compaq has itself become a leading supplier of the ATMs best able to run


It also supplies the plumbing, and claims that 80 per cent of all ATM

transactions pass through its equipment at some point.

'Imagine you're going to the ATM to get some cash out,' comments Jerry

Peterson, Compaq's vice-president of financial services industry


'Instead of the usual screen that asks you to enter your card, you're

given a menu of options that range from visiting the bank to look at

your investments to buying tickets, all of which you'll be able to do

from your local ATM.' Naturally, Compaq's NonStop Network for ATMs can

also support a wide range of online ad options to accompany all the new

services they make possible.

Compaq's campaign has brought unprecedented exposure to the new


And, according to Peterson, sales of new ad-capable machines have been

growing ever since.