Health Club Marketing: They Lose, You Win

This article courtesy of ChannelSeven.com.

“It’s beyond banner, it’s rich media, it’s content sponsorships”
Adam Handelsman, Netpulse

Face it, working out is boring with a capital “B”. Watching your “calorie burned” counter move at a maddeningly slow pace or lip reading television with no sound only serves to remind you that not only are you exhausted, but this is time during which, while your body is firming up, your brain is atrophying.

Thanks to modern technology, advertisers and marketers can now reach these pliable minds just as they’re seeking a diversion from the monotony. Slowly, but surely, a new generation of workout equipment is appearing in health clubs across the country — one that will let gymgoers click through their workouts as they watch TV, listen to music, or access the Internet. It’s a new type of network — one which reaches a captive audience that may be difficult to reach through traditional media.

Advertising in the Zone
One of the players installing these systems, E-Zone Networks, Inc. has two products it’s selling. The Model 1 has a five-inch screen, and provides a choice of television channels, as well as the ability to listen to CDs or tapes. The Model 2 touts a 12-inch screen and the ability to hyperlink to Web sites. So far, the E-Zone Network machines are installed in more than 300 clubs, with a total of 10,000 access terminals. These clubs include Town Sports International, Club One, America Club Systems, YMCA, Gold’s Gym, and AC Fitness.

Of course, gymgoers are paying for this service with their attention. To receive the headphones, users must fill out an exhaustive survey about their demographic characteristics and interests. Then, when they plug in to use the service, they are treated to two minutes of targeted advertisements. Advertisers benefit by reaching this highly-desirable demographic at a time when they’re not distracted, and by getting stats on viewership. “It’s accountable because you get a report at the end of exactly how many people watched your commercial,” said Skip Vose, executive vice president for media sales at E-Zone.

The product not only provides great ad space, it is also popular with club members. According to a study conducted by Dr. Jane Annesi, previously sedentary adults men and women utilizing E-Zone machines received superior fitness results to members who simply watched television, listened to music or did neither. The good news for health clubs is that members were nearly twice as like to stay with a fitness regime that included interactive equipment.

James Dudley, fitness manager for Aquae Sulis Spa in Las Vegas, Nevada believes that his members are working out longer and enjoying their time at the spa more thanks to the E-Zone apparatus. The machines are not directly connected to the cardiovascular equipment, they are mounted on a bar extending over a row of machines. The club member simply plugs in headphones, chooses what type of entertainment she prefers, and begins her workout. Cordless headphones allow members to move from the treadmill right to the free weights while still being entertained.

Taking the Pulse of Exercisers
The other player in this arena is Netpulse, whose chief executive, Tom Proulx, was one of the founders of personal finance software player, Intuit. While Netpulse’s concept is similar to that of E-Zone, the configuration is drastically different. Netpulse actually builds its equipment into the specific machines that the health club chooses, adding a 15-inch flat screen that is powered by a high-speed broadband Internet connection. Its affiliates include Bally Total Fitness, CRUNCH, YMCA, Gold’s Gyms, New York Health & Racquet Clubs, Sport & Health, Powerhouse Gyms, and Western Athletic Clubs.

When the club member first begins a workout, he is queried as to his name, age and weight, so that the workout can be calibrated to each specific body type and gender. That information is the key to targeted banner ads that run across the bottom of the screen. “It also allows you to track your workouts,” said Adam Handelsman, director of public relations for Netpulse. “You can see how many calories you burned in June, for instance. Enter your log and it will bring up your entire workout program. You can work with a personal trainer in your gym to help you track your workouts.”

Last year, for example, Netpulse ran an ad for GM on a hybrid car that was available only in California. Only potential buyers saw the ad. “You’re not wasting your company’s dollars on untargeted ad buys,” Handlesman asserted. In addition to banner ads, the company has broken down the Internet access into channels including mens’, women’s, automotive, news, stock, and gifts. Advertisers looking to reach those folks can sponsor an entire channel, and they can use broadband commercials — like movie trailers, for example. But, users have control of the content. They can go anywhere they want.

“It’s all in front of you. You’re not looking up at the ceiling; you’re not looking at your lap, reading a book,” said Handlesman. “If you want to read a newspaper, or you want to read ChannelSeven.com, you can log onto anything on the Internet. We maintain a fully open network.”

Healthy Benefits for Gyms
The health spa obviously receives a benefit from being able to offer the equipment to its members, but none of the companies we spoke with for this story would divulge the exact relationship between the gyms and these health club networks, saying that the deals were different for different clients. One can imagine the gym paying a flat fee for the equipment, and then sharing the advertising revenue brought in by selling access to the audience. One other incentive for the health club is that, with Netpulse at least, it gets statistics on the use of its equipment, like how many workouts were performed on a particular machine, and the duration of each session.

The machines might also help grow membership and loyalty to the gym, because they help to eliminate a reason that many people give for not working out. Handlesman believes that the Netpulse full keyboard allows people who thought they were too busy to work out, to do two things at once, recapturing lost time. Any research that can be completed on the Web and any email that needs to be attended to, can be crossed off the to-do list while a club member is working out. Online shopping is available, as well, which might mean the gym will be more crowded during the holidays. Workout enthusiasts will save when they shop online, too, because for every minute of workout time on the equipment, a point is earned that can be redeemed at the Netpulse Mall or used for up to 20 percent in discounts on major airlines.

Who is advertising to this captive audience? Surprisingly, a lot of brick and mortar companies are buying up banners, sponsoring channels, and signing strategic partnerships. Companies such as Sony, Clif Bar, American Express, Procter & Gamble, iVillage, GM and Toyota have utilized health club-based advertising. A club could even choose to advertise its own services — or those of another property owned by that company, such as the hotel a spa is located within.

“We’ve spent years of research and development to create a product that was truly a benefit to the club members,” says Skip Vose of E-Zone. “We didn’t just want to be a television set that people watched. We wanted to be a big improvement over what they had been experiencing before.”

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