The battle of the pump-top displays

by James Bickers, Editor Digital Signage Today July 2007 gas pump video

Pay-at-the-pump technology turns 20 years old this year, and it has been a success by anybody’s standards. In 1994, 13 percent of c-stores offered the time-saver; today, that number has risen to 93 percent.

But perhaps it has worked a little too well. Margins on gasoline are razor-thin, compared to the higher profits made on items sold in the store. And pay-at-the-pump has meant a drastic decrease in store traffic. Andre van der Velk owns four c-stores in California, two independent and two Shell; he said two-thirds of his gasoline customers never set foot in his stores.

"There is a constant drive for the operator to get people to come into the store and buy," he said.

That drive has been the motivation for traditional pump-toppers — static signs advertising in-store specials — and is now the force behind a number of companies building digital signage networks at gas station islands.

Pay-at-the-pump a ‘necessary evil’

In May 2007, USA Today published a list of the top 25 "Eureka moments" of the last quarter-century, the 25 inventions that have had the most profound impact on consumer behavior. On a list made up of world-shaking inventions such as the laptop, the cell phone and the debit card, pay-at-the-pump ranked #9.

"Pay-at-the-pump is essential for anyone who sells speed, and virtually all convenience stores do," said Jeff Lenard, director of communications for the National Association of Convenience Stores. "Some may call it a necessary evil, but it is necessary."

Several companies are now trying to turn this necessary evil into a profit center by installing digital screens at the pump, and using those screens to display promotions for in-store items, mixed in with entertainment and news content.

A Gas Station TV installation, showing national content from ESPN.
Founded in 2006, Michigan-based Gas Station TV (GSTV) quickly landed a contract to be the exclusive screen provider for Murphy Oil. So far, the company has placed about 1,000 screens at c-stores in Atlanta, Dallas and Houston. GSTV chief executive David Leider said the screens feature national content from ABC, mixed in with original GSTV content that takes aim at local interests.

The screens are provided to the c-store owner at no charge; GSTV pays the bills by selling ad space to national accounts such as Chevrolet, Progressive Insurance, Dodge, 1-800-Flowers and Quicken Loans. The network is managed by GSTV, and runs Scala’s InfoChannel software.

PumpMedia, which won the exclusive contract for Chevron’s video at the pump program, uses a similar business model and value proposition, with one difference: C-store operators can opt to pay for the screens and eliminate the outside advertising. Under the ad-subsidized model, the storeowner gets 75 percent of the screen’s loop time, and PumpMedia sells ads on the other 25 percent.

Peter Tawil, president of PumpMedia, said the idea for his company came to him in 1999, when he was working in television advertising. While fueling his car one day, he heard audio advertisements for in-store products and services being played over the station’s loudspeaker.

"The guy had a shoe shine inside, a magazine rack, a small restaurant," he said. "He had it all going, and he was smart – he was promoting all of his products inside the store. When I heard that, I thought, ‘Okay, that’s smart, but if you can do it with audio, wouldn’t it be more powerful if it had video attached to it?’"

A PumpTop TV installation, featuring hardware from Westinghouse.
Larger companies are getting in on the action, too. Daktronics is part owner of Fuelcast Network, a joint effort with VST International to get digital signage onto self-service gas pumps, and Westinghouse recently announced an exclusive arrangement with AdtekMedia to provide technology for that company’s PumpTop TV program.

‘They will take any ad that they can’

Pump-top digital signage is still in its infancy, still at the stage where there are any number of small players trying to eke out an existence selling screens and ad space on them. Ken Goldberg, chief executive of Real Digital Media (which, along with Avocent, supplies the technology for PumpMedia), said he recently took some c-store clients on a road trip to survey the competitor’s landscape. They found three different regional pump-top networks, each with their own proprietary hardware set-up and content strategy.

"The content that (the clients) saw was not in line with what they wanted their customer to see," he said. "One of the ads was a preacher talking about a local church — they certainly don’t want religious messages coming out of the pumps."

On one of the screens, they spied an ad for the pizza restaurant down the street — a direct competitor from the pizzeria inside the c-store.

"They will take any ad that they can, including Reverend Billy Bob and cheap pizza," Goldberg said. "And there are a lot of them. You might put ten bucks in your gas tank and you’ll see three ads."

All of which hints at a market that is ripe for consolidation. Clearly, there is great potential in using digital signage at the pump, but widespread adoption — particularly by large chains associated with big-name brands — will require a uniformity of experience and a heightened understanding of how to handle brand assets.

"In an old-fashioned way, this is what the industry has been doing with pump-toppers since the 1970s," said van der Valk. "This is just a technology advancement of the old pump-topper. The only reason it is taking so long is that the oil industry is very protective of what they put above their logo."