Screen Gems: Cinema Ad Growth Enjoys 12.7% Rev Hike

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The cinema advertising industry outpaced most other media last year in terms of revenue growth with total revenues rising 12.7%, from $584 million in 2009 to $658 million in 2010, according to the Cinema Advertising Council.

The revenue report covers all the major subcategories of cinema advertising, including commercials airing in advance of movie previews and "off-screen revenues," including lobby digital video, audio programming, sampling, special events, concession-based promotions and other lobby-based promotions.

The growth included a 13.9% increase in national and regional ad sales, and 8.2% growth in local, as reported by the CAC. National and regional contributed 80.2% of total revenues last year, while local contributed 19.8%.

The CAC membership includes National CineMedia and Screenvision, the two dominant cinema advertising companies, which together take in 90% of the industry's revenues.

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Cinema ad growth outpaced total ad spending, which grew 6.5% in 2010, according to a recent report from Kantar Media. CAC president Cliff Marks attributed the growth to an increasing number of brands "planning cinema as an integral part of their media mix in order to reach younger demographics and light TV viewers." He also cited the advance of 3D formats for both films and advertising.

Previously viewed as a curiosity, 3D projection has now been deployed to about 7,500 screens nationwide, and should grow to more than 10,000 by year's end, providing advertisers with true national reach. Marks also noted that the production costs for creating 3D advertising have plummeted, significantly lowering the barrier to entry.

Marks also emphasized that agencies are recognizing cinema advertising's value as a complement to TV, especially among 18- to-34-year-olds. He cited Nielsen figures showing that cinema advertising would be the largest TV network in terms of 18- to-34-year-old audience size on Friday and Saturday nights.

The top national cinema advertising categories in 2010 included auto, electronics, entertainment, financial, communications, consumer packaged goods, health and beauty, soft drinks, military recruiting, and video games. Marks said the industry was also enjoying growing interest among insurance, luxury goods, pharma, travel and tourism categories.

Looking to the future, cinema advertising faces some challenges in 2011, including drooping box office sales. Marks acknowledged this concern, but said the decline may be offset by studios moving to a new schedule, which involves releasing big movies more regularly throughout the year, rather than concentrated around summer and winter holidays.

He also noted that 2011 will inevitably be a difficult comparison in terms of movie ticket sales, given the enormous success of "Avatar" last year. The movie has grossed over $750 million in the U.S. and Canada to date.

1 comment about "Screen Gems: Cinema Ad Growth Enjoys 12.7% Rev Hike ".
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  1. Leon Hambrook from Hambrook Ideas & Innovations, May 28, 2012 at 7:02 a.m.

    My 2 cents... I have stopped going to the movies since 2008. I am so feed up with commericalism and having to watch comericals that I've already seen on TV pushed me to the point to stop going to the theater. 20 minutes wasted in theater before I get to see anything interesting has pushed me to other methods of visual entertainment such as video rentals or streaming where I don't have to watch advertisements. Thus.. while the masses flock to the theater to see the latest new flick, I wait... I have better things to do than watch advertisements I am not interested in viewing.

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