Internet Advertising & ATMs

Mary E. Shacklett, President, Transworld Data | 9/29/2011 | 28 comments

Mary E. Shacklett
There are over 400,000 ATMs (automatic teller machines) in the US, with over 85 percent of the world's cash transactions involving ATMs, according to Wired. The ATM is the perfect example of technology that is “built to last.” It got its start in 1939, when the first mechanical cash dispenser was installed, and then enjoyed the beginning of widespread commercial use in banking in the 1970s.

Through the years, ATMs have been viewed as convenient in-field technology for customers, which take the transaction load off teller lines, where the average cost per transaction is between three and four dollars. But part of the value of ATMs is the way they can extend the physical reach of brick-and-mortar bank branches to street corners, convenience stores, malls, and even ballparks. Along with this geographical distribution to different neighborhoods and locales comes a differentiation in customer demographics that demands a diversified marketing approach.

Except for foot or vehicle traffic studies, ATMs have never traditionally factored in much on the marketing side of banking -- but they do now. The reason is the addition of Internet capability to these machines, which allows banks to push out product promotions and other information to consumers as they use the machines.

Here’s how it can work:

You slide in your ATM card and punch in your PIN to begin a transaction. The system identifies you, and knows your demographics from your account. It then tailors a product pitch to you based on the information. A well timed “pitch” in an ATM environment should last only several seconds. It appears on a read-only display on the ATM and is customized to you. So if you are in your early 20s, you might get a pitch for a new car loan. If you are in your mid-40s, the pitch might be mortgages.

Why do this?

The business case is straightforward. Banks continue to merge and to expand their territories. As they do this, they also acquire ATMs and physical branches in new locations. If the marketing department decides in a given month to feature new car loans or low mortgage rates, it has to get posters, banners, literature, etc., out to every branch and also coordinate with sales to ensure that branch personnel are trained on all of these products. Part of the merchandising that occurs at the local branch involves the placement of all of this advertising by operational personnel at branches. This takes time away from customers.

To extend the reach of the advertising and also to minimize some of the labor that branch operations personnel must do to support marketing campaigns, more banks are considering using ATMs to do part of the work. Now the next question is:

What do you have to do to make this work well?

The first issue is security. Internet on ATMs (where the risk of fraud is already high enough) must be in display-only mode, with absolutely no access to users.

Second, procedures need to be instituted with marketing so that new ad promotions can be uploaded to the ATMs at different locations, or to different customers based on demographics. In some cases, it is IT that uploads the new content. In other cases, tools are available that allow marketing to do this on its own.

Third, timing is very important. Advertising on ATMs needs to be fast (after all, "fast" is why people visit these machines in the first place). Because of this, Internet advertising on ATMs should be geared for five seconds in duration at most. (You have to remember that the customer is standing there waiting for her transaction to process.) Extending the time on ads can be disastrous. It can lead to greater abandon rates and lower transaction volumes on ATMs. You don’t want that to happen, because it is the transaction volumes that eventually pay back on the ATM investments.

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SAF   Internet Advertising & ATMs   10/8/2011 11:47:28 PM
Re: Now my money is trying to spend itself

If you're ever in charge of rolling out a system like this (or, for those who are now) remember how you felt about it when you were the consumer

@zerox, completely agree, when designing something like this, you should always think like a consumer. But the mistake we often do is we get so biased about our ideas that even if we think like a consumer everything looks to us perfectly alright. Focusing on consumer is a key but often we lose it.

Mary E. Shacklett   Internet Advertising & ATMs   10/6/2011 5:54:02 PM
Re: Internet Advertising & ATMs
....and you're not alone in your feelings about it, Henrisha.

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Henrisha   Internet Advertising & ATMs   10/6/2011 6:30:10 AM
Re: Internet Advertising & ATMs
Extending the time on ads can be disastrous. It can lead to greater abandon rates and lower transaction volumes on ATMs.

Well said. The point of ATMs, at least for me, is so that I can withdraw money fast when I need it. I don't want to have to go through prompts or watch ads display on the screen while I do so. The reason why I'm so partial to ATMs is the convenience and hassle-free transactions they offer (except for when the machine "eats" my card, but that's only happened once so far.) I get why banks are doing it but that doesn't mean I'm crazy about it at all.
Steel2179   Internet Advertising & ATMs   10/4/2011 11:17:25 AM
When Is It Ever Enough?
Extending the time on ads can be disastrous. It can lead to greater abandon rates and lower transaction volumes on ATMs. You don’t want that to happen, because it is the transaction volumes that eventually pay back on the ATM investments.

So my bank can charge me for seeing a teller, having a debit card and now offer me ads at the ATM.  An additional 7 seconds at an NYC ATM is a possible invitation for a mugging.

batye   Internet Advertising & ATMs   10/3/2011 1:04:51 PM
Re: Now my money is trying to spend itself
Hello, I think so, as advertising channel ATM would give a good return on the add. dollars as they could target/pinpoint consumer relevant add in the accordance with the shopping pattern...
Mary E. Shacklett   Internet Advertising & ATMs   10/3/2011 11:06:08 AM
Re: Now my money is trying to spend itself
Hi Batye,

With ATMs so pervasive, it's hard to ignore them as an advertising  channel.

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nimanthad   Internet Advertising & ATMs   10/3/2011 5:39:54 AM
Re: Now my money is trying to spend itself

Well its true because Google and FB are well known and lots of traffic do attract those two sites but imagine the lesser known sites and the impact the advertisements carry in those sites. That is where the difference is being clearly made.
batye   Internet Advertising & ATMs   10/2/2011 5:40:59 PM
Re: Now my money is trying to spend itself
in Canada some private small ATM do provide Advertising on the back of the ATM receipt related to the local area bzz.

I think in future it will happens... as it do make sense to target key audince and deliver pinpoint add directly, even with option to print coupon on the back of f the ATM receipt
Mary E. Shacklett   Internet Advertising & ATMs   10/1/2011 1:31:37 PM
Re: Now my money is trying to spend itself
Hi kstaron,

This can be a very delicate area--which  is why you don't see so  much of this advertising when you go to the ATM.

Will it ever take off?

Hard to say---but I don't think you are  alone in your feelings  about this.

User Ranking: Blogger
Mary E. Shacklett   Internet Advertising & ATMs   10/1/2011 1:24:34 PM
Re: Bad Idea
Hi JPoe,

Of  course, the original idea was that this could provide differentiation in a highly competitive market--but the fact that banks have been slow to deploy also suggests trepidation on how this could impact the customer  experience.

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