Financial Focus: Cinema Advertising

The fastest-growing forms of advertising last year were not cable television, the Internet, or even Spanish-language TV. That honor went to cinema advertising.

It's coming from a much smaller base, of course. Cinema advertising revenues rose 37 percent, from $259.3 million in 2002 to $356.1 million in 2003. That dollar amount comes from a report released this morning from the Cinema Advertising Council, a trade association serving the industry.

The council represents the three companies that control 34,490 screens, or about 73 percent of the nation's movie screens. Those three companies' cinema advertising revenues totaled $315.1 million in 2003, up 48 percent from the $212.3 million logged in 2002.

That's a lot of growth for an industry that not too long ago was known mostly for static, placard-style advertising on movie screens. But today, that's the exception rather than the norm as cinemedia advertising has gone to moving pictures, and in many cases, digital. The flashy part of cinemedia advertising can look like a typical 30-second commercial writ large. And while it can tend to be more expensive on a CPM basis than television, it's also targeting demographics that are, in the lingo of the business, light TV viewers.



Matthew Kearney, president of the Cinema Advertising Council, said the growth is tangible evidence of the industry's progress in promoting cinema advertising.

"It's demonstrating that cinema is a serious medium in this country," Kearney said. "It provides real opportunity for advertising clients to reach what would otherwise be hard-to-reach demographics."

Kearney said that cinema advertising has a lot of value compared to television and other media.

"It's a high-value, high-impact form of advertising. You're not talking about a small TV set with ads showing where you might not have anybody in the room," Kearney said. "It's a 40-foot screen, and great ad quality."

While automotive, beverages, and media are among the top advertising categories, the Cinema Advertising Council's report said it was growth in other areas that helped the industry achieve its double-digit increases in volume. Those categories included electronics, travel/leisure, video games, home products, restaurants, and sporting goods.

"We are seeing innovative marketers become the early adopters of cinema advertising. What happens is the innovative ones try cinema, like it, and come back for more," said Kearney. "We're seeing cinema growing almost category by category."

It's also boosted by the fact that Nielsen has developed a system through Nielsen Cinema, which will provide regular syndicated audience ratings for the cinema industry. The audience ratings are gathered from a phone survey of more than 500 moviegoers who attended films over the past week. Estimates are created through a model combining theater box-office gross, ticket price information, and historical data. Nielsen determines "gross cinema points," similar to the gross ratings points in television. They are available for key demographics as well as age ratings used in the movie business.

The three founding members of the Cinema Advertising Council--National Cinema Network, Regal CineMedia, and Screenvision--have funded the service. A Nielsen Cinema report released last year has found that Screenvision has the highest monthly audience composition--50.6 million in a May-June 2003 survey. National Cinema Network had 25.9 million, and Regal totaled 25 million.

"We're measuring the attendance at the theaters where the ads are shown, but it is not a commercial audience per se," Paul Lindstrom, senior vice president of Nielsen Cinema, told the MediaDailyNews last year. "It is the equivalent of the program audience rating in television."

But it isn't just the on-screen experience that helps drive growth. Marketers have been able to capitalize on the foot traffic between the parking lot and the movie screen and back again. There are lobby placements, and also the opportunity to pass out flyers or samples as the moviegoer leaves the theater. The report said that these types of promotions rose 79 percent, from $21.5 million in 2002 to $38.4 million a year ago.

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