Silver Screen Turns Golden, Cinema Has Boffo Ad Market

2006 was a banner year for cinema advertisers, with the Cinema Advertising Council reporting 15% growth in revenues over 2005 to $455.6 million. And the medium is on its way to an equally successful 2007, according to executives from the two big cinema ad players, National CineMedia and Screenvision, who pointed to repeat business and the entrance of new advertisers.

Cliff Marks, president and chairman of the CAC as well as the president and chief managing officer of NCM, spoke for the industry as a whole: "Lots of new marketers and new categories are coming into the cinema space, obviously because they understand the appeal of sight, sound and motion." Established categories like automotive, consumer electronics, and military recruiting are being joined by wireless and telecom advertisers, insurance companies, and financial services, including credit cards.

Another big category that's just beginning to break is retail and packaged goods, said Marks and Matthew Kearney, the president and chief executive officer of Screenvision. According to Kearney, after Old Navy adopted cinema advertising last year, other retailers like JCPenney began to express interest, and more big retail names are coming in the near future. Kearney also said Screenvision is making its first deals with insurance companies, with Allstate and GEICO on board (the famous cavemen will be appearing in Screenvision pre-shows shortly).

A key driver of growth has been the expansion of both companies' digital networks for serving ads to movie screens, replacing cumbersome and time-consuming analog tape reels or slide shows. David Kupiec, executive vice president of sales and marketing for National CineMedia, estimated that "90%-92% of our screens are now on the digital network," while Kearney said slightly more than half of Screenvision's partners are hooked up. However, Screenvision's total number is somewhat higher, as it's also using digital systems installed by cinema owners themselves for showing feature films.

The executives also pointed to the attractive demographic reached by cinema advertising: audiences skew younger, better-educated, and more affluent than the population at large. The latest edition of Arbitron's "Cinema Advertising Study" found that 71% of teens ages 12-17 and 61% of adults 18-24 reported going to the movies in the last month. Overall, cinema advertising reaches 53% of adults ages 18-34. Meanwhile, adult moviegoers are 35% more likely than the population at large to have an annual income over $75,000.

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