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
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
COMPAQ RAISES THE SWIPE STAKES
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.