Article

Breaking Through

ATM Advertising Inc. is applying its expertise in ATM ad placement to the kiosk world. How will the company fare on this new playing field? Mike Szimanski thinks he can hit a grand slam.

April 9, 2002 by

The name is synonymous with success.

ATM Advertising Inc., the company that pulled off a deal to place ads for Compaq Computer on 1,700 ATMs in six national markets in 1999, is planning a February launch of another significant campaign in the kiosk industry.

The new campaign is a noteworthy event, according to ATM Advertising president Mike Szimanski, especially since it is the company's first kiosk project. But Szimanski said the campaign will be significant for another reason - it will introduce direct response advertising to the kiosk industry.

"It's going to change kiosk advertising, actually, it's going to push it through the roof," Szimanski said.

Depending on the kiosk, advertising may be displayed on screens, the backs of printer receipts, and on other devices that top the unit.

ATM Advertising has signed a contract with what Szimanski will identify only as a major national direct response company to provide ad content. The total kiosk ad deployment, targeted at the Web phones and enhanced-function pay phones of as many as six companies, is expected to reach 2,000 kiosks by the end of February and 10,000 by the end of the year in the United States and Canada.

Szimanski hasn't put a value on the deal. His private, six-employee firm, based in Baltimore, does not reveal annual earnings.

Health and fitness products, financial services, cosmetics and music are among the items to be advertised. The nature of the advertising effort may attract as much attention as the players involved.

Other partners in the campaign are two companies that develop enhanced-function ATMs with e-commerce capabilities: San Francisco's iATMglobal and International Merchant Services of Euless, Texas. A fourth partner is a large telecommunications company, though Szimanski would not identify it.

Direct response comes to kiosks

Direct response advertising is designed to motivate consumers to immediate action, usually by dialing a toll-free phone number. Direct response advertising has been used successfully in television, primarily through the broadcasting of informercials.

At the kiosks, sales will be tracked through an 800 number. Each kiosk network will have its own 800 account. Calls from the assigned number at the kiosk will go into a call center, and the kiosk owner gets credit for the sales. With Web-based kiosks, a URL will be assigned to perform the same function, tracking Web site hits generated by the kiosk.

In typical advertising contracts, ATM Advertising receives a 15 percent commission of whatever the advertiser pays for placing an ad, Szimanski said. The rest goes to the kiosk or ATM owner.

The compensation for direct response advertising is different. ATM Advertising will receive a split of the revenue generated from sales executed through the kiosk. The company will seek unused ad space on kiosks already in use, Szimanski said. Once it has an agreement with a kiosk distributor, ATM Advertising will place its ads on kiosks and pay the owner a percentage of all the sales that come from the unit.

"If they happen to get a paid advertiser that comes along, that's OK, they can move us off to the side," Szimanski said. "We intend to prove to them that the results from our approach, hopefully will at least meet or exceed what they might get from their paid advertising situation."

The right medium

Szimanski said kiosks are ideal for advertising programs, because they are similar to the already-proven ATM advertising. He said kiosks are a natural extension and suited to a changing market.

"The consumer market is becoming increasingly sophisticated," Szimanski said. "They (consumers) are less afraid to try these things. For a lot of reasons, they're willing to walk up to something - which a few years ago would have been foreign - and not be afraid to put a credit card in it or interact with it."

For two years, Szimanski said his company has been "trying to take a box that was built to give you your money and convince the media-buying public that this was a new advertising medium." Now he's doing the same thing with kiosks. He said kiosk vendors have shown plenty of interest.

"In the last several weeks, we have been approached by quite a few kiosk and telephone vendors that have asked us to help them broker space on their devices," Szimanski said. "A lot of people are looking for some kind of solutions to help perpetuate ATM advertising. I think an approach that's kind of making itself evident is to combine them with these other multitask communication devices that are out there. Those are some of the ones that we're now bringing into our network."

The company's formula for success is to build a "critical mass" of successful kiosks and ATMs, in locations such as universities, airports and hotels. That no longer means focusing on specific markets, such as Chicago, Dallas, and San Francisco, but on saturating key venue types, Szimanski said.

"As important as the geographic spread is by DMA, it's equally important to be able to offer concentrations in various venue types. A rent-a-car company might be interested in being in a top 10 market, but they're going to be more interested in being in as many airports as possible," he said.

Szimanski is optimistic about his company's latest venture, as is his newest business partner.

Szimanski's older brother, Milt, recently left a job as a program manager with SI International Inc.,  a federal informational technologies service provider in McLean, Va., and joined ATM Advertising as vice president, communications and technical support.

"I'm amazed at the potential. I guess the instant key is communication in terms of commerce," he said of his decision to join his brother's firm. "I think that kiosks are part of the puzzle and I think we're all going to end up wired together in such a way that it's going to be easy to do any kind of transaction any time from anywhere. That's a huge part of what attracted me to this company is just to be able to say, `This thing is just about to explode and we get to be right here at the beginning of it."

Competition

ATM Advertising isn't the only player in the ATM/kiosk ad game.

Invision Media, a digital media advertising company, is coordinating advertising for 80 companies on 3,000 kiosks this year thanks to a deal with OneMediaPlace, a company that specializes in delivering advertising to the e-business environment.

A privately-held company with 12 employees, Invision will generate an estimated $ 4.5 million in revenue this year, President Ray Service said. Formed in 1999, Invision, has offices in Florida and Toronto.

Invision streams low band- width multimedia content, including advertising, to active displays via satellite. Invision's kiosks feature an advertising management program that includes data retrieval and reporting and integrated monitoring to aid kiosk owners.

"I have a proprietary database that we have developed for kiosk locations so that basically an advertising agent like OneMedia Place can pull up a screen that says what kiosks are available," Service said. "We have 28 search criterias. The primary criteria in targeting are hotels, tourism, travel, etc."

There are two levels of secondary criteria. "We can come up with any combination of 3,900 different criteria for the ad agency to search for. If they want a demographic, if they want age 16-22 in a sports facility or people that travel through a bus stop, we can target that and come up with that particular demographic for them."

Service said selling advertisers on the concept is an educational process.

"We try to get the kiosk owner to basically learn and understand that if you start e-commerce from the kiosk, it's not a novelty item any more -- it's a functioning tool," Service continued. "That's where you start to make some serious money."

Service said the range of reward for kiosk owners varies from $260 to $3,000 per month, depending on the location.

"It's our job to attract more people to that kiosk. In turn, by using our revenue sharing structure, we earn more and the kiosk owner earns more."