Cinema Advertising Celebrates a Record Year

Box office may have had a record year in 2015, but there was no guarantee that cinema advertising would enjoy the same success. The first quarter of the year was dominated by news of the big merger that was not meant to be—a deal that would have seen the combination of industry giants National Cinemedia (NCM) and Screenvision into a single entity. Rather than going into a tailspin, the cinema advertising industry proved its resiliency by not only recovering but improving its numbers in what ended up a record year.

The Cinema Advertising Council (CAC), which represents the leading companies that account for approximately 90 percent of U.S. screens, reported a 13.4 percent year-over-year bump in revenue, crossing the $700 million milestone for the first time in its history. Cinema advertising has now earned more than $600 million in each of the last six years. The 2015 figures add up to $716.4 million, up from $631.9 million in 2014, and reaching a cumulative total of $7.31 billion since the CAC began tracking revenue in 2002.

The record year was achieved through key increases in various categories. National/regional sales represented 76.83 percent of total cinema revenue, reaching $550.4 million from 2014’s $476.2 million—a 15.6 percent surge—thanks to the addition of 215 new brands entering the field. It was nearly double the 121 new brands that embraced cinema advertising in 2014 and a big improvement over the 93 new brands that came on in 2013. Local growth remained steady as well, representing 23.17 percent of all cinema revenue with $165.9 million, a 6.6 percent improvement over 2014’s $155.6 million.

Last year’s momentum also came from gains in new sales categories, including alcohol/spirits, colleges/universities, cosmetics, sporting-goods stores, and supermarkets. The industry’s top sales categories of the year, however, were a bit more familiar: auto, banking/finance/insurance, consumer electronics, government/education, and media.

Those in cinema advertising attribute the pace of growth to continued viewer erosion on television; cord cutting and digital video continue to make an impact on ratings. Katy Loria, who acts as Screenvision’s chief revenue officer and president of the Cinema Advertising Council, also credits a strong studio slate for the industry’s record year. “I think what’s been going on with television is the biggest driver,” she says. “But we also have to mention the movie slate; it was a phenomenal year. We had record-breaking movies almost every month, and that’s great for us as an industry because it brings in more advertisers to stick with us week-in week-out instead of waiting for the Fourth of July or holidays.”

Television’s decline has therefore made upfront events an integral part of cinema advertising’s sales strategy for its two major players. NCM and Screenvision have equally embraced upfronts as part of their outreach to Madison Avenue. NCM once again held its event at AMC’s Lincoln Square location in New York, emphasizing the cinema industry’s ongoing relevance with the ever-elusive millennial audience. “Three hundred and fifty-eight million tickets were sold to millennials at our theaters last year,” touted Andy England, NCM’s recently appointed CEO. “Put simply, we have more millennials visiting our theaters in one year than there are people in the United States, 36 million more. So, why do millennials love the movies? Because this is the best content there is. We have this highly desirable audience because we have the best content. Opening weekend for movies are, by definition, culturally relevant. Millennials want to see films as they are released because it puts them in the know. It gives them social currency. Having a point of view on Deadpool or the Jungle Book, or being excited about Bad Moms, is to be part of the narrative or to be woven into the fabric of popular culture.”

By citing two Q1 titles, England underlined Katy Loria’s observation about how cinema advertising has benefitted from the industry’s adoption of a 52-week release calendar that depends less on seasonal film booking. NCM president Cliff Marks emphasized this aspect in his own remarks: “Film planning has really changed in recent years, and the studios have recognized the need to spread out major releases throughout the year,” said the executive. “There’s still a myth out there that only summer and holiday movies deliver big audiences, but NCM’s first-quarter 2016 millennial audience was 97 percent of our fourth-quarter attendance—nearly identical—which just goes to prove that cinema is a year-round advertising solution for brands.”

Screenvision held its own upfront a week earlier at New York City’s Skylight at Moynihan Station, opting for a more immersive environment that included film-themed sets from upcoming releases like Kong: Skull Island, The LEGO Batman Movie, and Guardians of the Galaxy Vol. 2. The event also included a live demo of TimePlay’s interactive pre-show, which will launch at both NCM and Screenvision locations with a plan to reach 1,000 screens by the end of the year.

Partnerships are at the heart of Screenvision’s strategy; the company announced alliances with MovieTickets.com, Shazam, Edison X, and Branded Entertainment Network during their upfront—all in an effort to better target and reach specific niches of consumers. “One of the most significant buzzwords in the industry is ‘Precision Targeting.’ As we collect data and get smarter about who our audience is, we share that back with the advertiser,” says Loria. “We’re moving beyond simply targeting by rating or genre. So if you’re looking to reach women 25 to 54, sure a romantic comedy works—but they’ll also be at Finding Dory.” In fact, big data has been a big part of cinema advertising’s appeal to advertisers in recent years, with both companies offering their own suite of services designed to better locate more specific groups of moviegoers.

“Cinema is very well positioned to respond to the increasing demand for premium video,” said Loria at Screenvision’s upfront presentation. “As the industry’s recent revenue reports indicated, cinema advertising is no longer at the precipice of change—the line has been crossed.”

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