'ACM' Powers Up Portable Devices, Ad Revenue For Operators

Posted On: 10/27/2008

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NEW YORK CITY -- Consumers can now charge their cellphones, PDAs and MP3 players on the fly and in a flash through a new line of Automated Charging Machines (ACMs) from Hercules Networks. The company recently began rolling out its charging stations in malls nationwide and aligned with its first vending operator partner who's placed units in hospitals, colleges and universities throughout New York City.

Hercules ACMs employ rapid-charging technology that allows busy on-the-go users to power up all types of mobile devices in 10 minutes for $2, payable with cash or credit card. The machine features 12 charging plugs with intuitive point-of-sale graphics that indicate specific names of compatible devices (e.g., Motorola Blackberry, iPod MP3, Motorola Nextel) highlighted by photos of each plug. Red and green LEDs offer a visual display of the charging process.

As customers wait for their electronic devices to charge, they are entertained by an LCD screen on the kiosk that plays the latest news, shows and sports clips through an "infotainment" partnership with the CBS television network. The 10- to 20-minute programming cycle loops continuously throughout the day. Each cycle consists of five to 10 minutes of news and entertainment with an equal amount of time devoted to advertisements. On a monthly basis, each station has 10 to 20 segments -- 30 seconds apiece -- available for ads. The team of advertising veterans at Hercules customizes national, regional and local advertising to maximize revenue at each location.

The machines are available in two freestanding 6-ft.-tall models, with a 19-in. or 32-in. LCD screen, along with a 3-ft. x 2-ft. graphic display that can be branded with a logo or image to suit each location. A 2-ft.-high wall-mounted style with a 17-in. display is also available.

Hercules Networks is seeking to expand its partnerships with vending operators nationwide, through which the operator purchases or leases the stations from Hercules and collects the $2 charging fee. In addition, Hercules adds the ACMs to its network and continues to remotely update programming and advertising content on a daily basis. The vending operator receives quarterly checks for the percentage of advertising that has been sold on his or her machines. The operator share varies from 15% to 35%, according to King, proportionate to the size of his or her network of machines.

"The feature the ACM offers that other vending products can't offer is that there is no restocking," King pointed out. "When a customer plugs his Blackberry in and pays $2, after his 10-minute charge, another customer can plug into that same port without having to replace anything. This makes the cost of doing business relatively small."

The primary maintenance requirement, according to the Hercules chief, is the occasional need to replace the charging tip, which gets worn from frequent use and can break when users inadvertently jam a device onto the wrong tip. Generally, one of the 12 tips must be replaced once or twice per month at a cost to the operator of $1 a piece, he noted.

Hercules began operating the initial 95 of its ACM units in malls throughout the U.S. early last month and CC Vending (Bronx, NY) simultaneously kicked off its partnership with the company as the first vending operation to deploy the charging stations.

"Hercules sees this as a win-win as we want to let vending operators do what they do best -- finding the best locations, placing them, maintaining and collecting cash. And it lets Hercules do what they do best -- sell advertising on a major network," CEO Paul King told VT.

He added that out-of-home, "in-your-face" promotion is the fastest-growing form of advertising and vending operators, with the help of the advertising experts at Hercules, are in a position to capture significant incremental revenue at the high-traffic locations they already serve. Hercules assumes the task of generating and overseeing ad content, but welcomes operator input, especially since those who serve the locations are often most aware of local businesses that might be interested in broadcasting their services.

Headquartered in New York City, King researched the local vending industry to identify the best-suited operator with whom to initiate a collaboration and found a receptive partner in CC Vending owner Mike Esposito, who operates vending equipment in high-profile hospitals and universities throughout the five boroughs. Esposito said he immediately saw the value in providing his customers with a unique new service for which he perceived a demand and was attracted by the potential revenue stream he could add through onscreen advertising.

"The $2 cost for each charge should quickly pay back my initial investment in the equipment and I see huge opportunity to profit from the virtually unlimited revenue stream provided through the advertising. We're just in the first month, but it seems like it's a win-win all the way around," he commented. "Patrons are still discovering the availability of the 17 ACMs we've placed in the lobbies of all the hospitals and colleges we serve. We are working with Hercules to track transactions and monitor the effects of the advertising, and I am very optimistic about the results we'll see."

Esposito said he's already received inquiries over course of the few weeks he's had the charging stations on location from local business owners, including an electrician and restaurateur, who patronize his vending machines and want to advertise their services on the ACMs. Judging by the early interest, he forsees eventually designating an advertising representative to pursue local opportunities and work with Hercules to maximize the program's potential.

"We plan to put out a lot more ACMs -- potentially 100 units," Esposito summed up. "We see a big opportunity to put them in emergency waiting rooms and other parts of the hospitals where people find themselves with cellphones in need of a charge. And we expect to make heavy use of the adverting opportunity, but we're taking a 'walk before we run' stance since it's very new."

King added that Hercules is currently in talks with hotels, casinos, colleges, theme parks and restaurants and anticipates rapid expansion of the ACM network.

More information is available from Hercules Networks by calling (212) 551-3523 or visiting herculesnetworks.com.