But losses mount for the home furnishings e-retailer that went public in October.
In a perfect brand marketing world, e-retailers could zoom in on potential customers known to conduct transactions electronically, give them lots of pretty pictures promoting the brand and leave them something as an incentive to stop by the virtual shop.
But this is not a perfect marketing world.
Television broadcasts lots of pretty advertising pictures, but is unable to target messages exclusively to viewers who tend to buy things online. Internet-based ads reach the virtual consumer, but such ads do little to reach out to many consumers who do not yet buy online.
One medium is beginning to stick out among some dot-coms as a brick-and-mortar outreach for new customers-the humble ATM.
Internet-based companies seem most attracted to ATM users as a target audience. ATM users retain message information longer than audiences of other media because they pay close attention to their transactions, and they keep receipts that contain coupon information, says John Nicholson, vice president of marketing and business develop-ment at Well Fargo & Co.’s ATM division, which is converting 6,500 ATMs to connect to the Web and to offer full-motion video.
ATMs offer television-like messages for the eyes of consumers, but unlike television, ATMs also can leave consumers with coupons tied to the picture messages.
San Francisco-based Food.com is buying ads on Wells’ ATMs for a third time since it began buying ad space last year, says Nicholson. The Internet-based food delivery company generated a 35% increase in sales in 1999 because of the ATM ads. “We have a captive audience, and studies show they are looking at that screen,” he says.
Other ATM ad campaigns by Internet-based retailers are showing similar results. Conshohoken, Pa.-based Half.com is using 700 Key Bank ATMs in ARCO convenience stores in California. The campaign involves the distribution of receipt coupons with codes printed on them. The code provides free shipping from Half.com’s Web site.
The conversion rate for the Half.com coupons is about 20%, far higher than 1% grocery store or direct-mail coupon conversion rates, says David Moritz, president of Chesterfield, Mo.-based Secora Corp., which brokered the ad campaign. “These people are actually going home and keying in the Half.com site,” he says.
Yet another Internet marketing company, Sony Entertainment Corp.’s Emazing.com, is testing an ad campaign on 100 ATMs in St. Louis, Indianapolis and Cleveland, says Michael Szimanski, president of Baltimore-based ATM Advertising Inc. The promotion uses still images and receipt coupons with trivia questions that personal computer users can use to win Sony merchandise at Emazing.com.
“The ATM as a medium is valuable to these companies in that it is a one-on-one message,” says Szimanski. “When they get home or go to work, they are likely on the computer.” Despite the growing use of ATMs to promote Internet products, it is difficult for these online retailers to locate ATMs capable of carrying their messages. There are only a few thousand ATMs that offer features advertisers want, such as full-motion video, and even fewer connected to the Internet. Emazing.com probably would do more marketing through ATMs if it could target ATM users better and if more video ATMs were networked. “We would like to do more with ATM ads and be more selective,” says Mark Hughes, Half.com marketing vice president.