Dive Brief:
- In one of the largest investments on ABC's venture capital reality TV show "Shark Tank," the founders of Vengo, a vending machine that also serves ads on its products, received $2 million.
- According to Ad Age, Vengo is finding success because companies like Hershey’s and Mondelez are facing declining impulse sales in grocery stores, an issue also facing magazines sold in checkout aisles as more shoppers opt to scroll through their mobile phones in checkout lines instead of scanning the shelves in these lines.
- Vengo earned $1 million in revenue last year.
Dive Insight:
The vending machines are being installed in places such as hotels and universities.
Vengo Labs founder and CEO Brian Shimmerlik told Ad Age, "We are setting up outside where these people spend their time. We are able to adjust content and messaging in real time based on where the media and product are taking place. The messaging can be very targeted."
The ad element comes into play when someone makes a purchase. They are served a digital ad while waiting for the product to be pushed out. The machine itself generates data such as where the customer touched the screen that is shared with the advertiser and Vengo each time a product is purchased.
Vengo sells the machines at a cost, but earns revenue because brands pay Vengo a monthly fee of $200 per product for the ads and marketing data. The opportunity could help brands tap into impulse shopping, but also provide it the information it needs to better understand target consumers at this point in their shopping journey.