The original 'first screen': Growth trend continues for cinema advertising
“Going to the movies remains a winning activity among U.S. consumers,” according to GfK MRI’s trademarked spring 2010-11 “Survey of the American Consumer,” which our friends at National CineMedia graciously share with our readers. “The number of adults who go to movie theatres increased from 58% in 2007 to 61% in 2011 [at the same time as] frequency of theatre attendance has remained stable” for those attending once a week or more (4%) and those who go two to three times a month (10%, down one point from 2007-2010). There was also a slight increase among infrequent moviegoers (less than once a month), up to 57% from 54%. “Given the tough economic times and the many ways that consumers have cut back on discretionary spending,” GfK concluded, “this stability is a win for the movie industry.”
While this is good news for all of us, it also makes a compelling case, yet again, for the cinema as advertising medium. Despite the general economy, theatrical enjoyed “a very positive reception in the marketplace,” confirms Mark Mitchell, chief revenue officer at Screenvision, speaking to Film Journal International on behalf of the Cinema Advertising Council. “The slowdown that the media and general economies saw at the end of last year has begun to turn around,” he has observed. “Media investment is increasing [alongside consumer spending] and cinema is still as well-thought-of as it has always been.”
Back in November when he took the reins at the trade association as CAC president and chairman, Mitchell had noted that “the in-theatre environment is actually increasing in relative value to brands. Cinema was the original ‘first screen,’ and remains one of the most commercially friendly venues for marketers to connect with consumers. Through the CAC and its members, we will be working to enhance that opportunity in ways that build even greater return and measurable results.”
Joining Mitchell on the CAC board are Cliff Marks, president, sales and marketing, of National CineMedia as the association’s executive director, alongside Stewart Harnell, president and chief executive officer of Cinema Concepts and Michael Sakin, executive VP of Spotlight Cinema Networks (profiled in our May 2011 issue). In addition to representing cinema-advertising companies that account for some 36,000 or over 90% of U.S. screens, the CAC’s membership includes companies that provide services and products to the cinema-advertising industry. FJI’s prior analysis of the segment can be found here and the official 2011 numbers will be posted on our website upon publication by the CAC. Over the past eight consecutive years, spending has increased with an average compound growth rate of 17.9% per year.
At Screenvision, Mitchell has indeed seen “growth in a number of key categories that really helped diversify the different types of clients who are using cinema advertising.” He mentions insurance and financial services as “significant,” along with consumer electronics, technology/wireless, videogames and video platforms, as well as health and beauty advertisers. “Maybelline used cinema for the first time last year and they did see good results from their campaign,” Mitchell confirms. He attributes the “slowdown in the retail category during the fourth quarter” to the economy at large. Rather than branding efforts, “retailers primarily used price-based advertising” in that climate. “This is typically not the kind of messaging that they’ll put in cinema, although we think they should.” After becoming a definite trend in 2010, “interest from advertisers in using 3D continued,” he says. “For 3D televisions in particular, and, interestingly enough, some consumer packaged goods companies were following along.”
At NCM as well, “our revenue from 3D advertising last year showed double-digit growth,” which leads Cliff Marks to think that “more brands are considering 3D cinema advertising.” While there were no less than ten brands—including a wireless phone company and cell-phone manufacturer, consumer packaged goods, a film studio and television manufacturer—it would nonetheless “be bold to say that 3D has taken off and that it is part of every consideration set of buying cinema,” he cautions. “If you look at our 3D distribution network in 2012, we now have over 10,000 3D-enabled screens available. Whereas we were still rolling out throughout 2009-11, we have substantial distribution now. We can go to a brand now and offer them the ability to use 3D with some significant scale.”
In Marks’ opinion, the full potential has yet to be realized. “Until there are more 3D television sets and more people are using the format at home, brands will be a little reticent to create 3D ads because they really want to be able to show them across cinema and television. Yes, absolutely, there was 3D growth in 2011, but we’re probably a year or two away from seeing truly significant growth in 3D advertising in cinemas.”
In the 2D realm and in general, however, Marks remains “very optimistic that more brands in more categories and in more sectors think about cinema as a part of their general sight, sound and motion marketing. If we as an industry continue to do our job in selling the merits of our networks, the characteristics of our audience, the great original content that we have, the engagement that we have with the customer,” Marks believes that “cinema can become part of the media buys of even more brands.”
Up north in Canada as well, “advertisers are becoming more savvy to the power of the cinema.” Cineplex Media president Salah Bachir reiterates how “viewers are not turning off and switching to another channel. They are not going anywhere else and, of course, the creative looks much better and larger than life on our screens.” In addition to the “attractiveness of cinema recall rates,” Bachir explains that by offering marketers and agencies the opportunity to “segment their advertising by film and audience, it’s become a lot more like television. Cinema can deliver whatever demographic they are looking for: be it younger and older crowds, male, female or by buying the whole package of being in front of all the action-adventure films.”
As screen advertising has a longer tradition in Canada than in the U.S., onscreen offers a unique twist to marketers. Following the 20-minute pre-show of ads and entertainment that Americans have come to expect, Canadian moviegoers also see some five minutes of commercials after the published showtime along with the coming-attractions trailers. Bachir and his team call this their “prime real estate,” as it delivers the most captive audiences. Cineplex Media sells onscreen messaging and lobby, online and mobile advertising for its own circuit—even traditional print is covered with 700,000 copies of Cineplex magazine distributed each month. That’s not only for its own circuit, but also representing the theatres of Empire, Landmark and AMC Entertainment across Canada, reaching 93% of the country’s available cinema advertising. Cineplex Media also operates a fully digital network in cinema lobbies, malls, offices and sports stadiums along with the fourth-largest mobile site in the country overall. Bachir says all have seen great growth. “Our mobile site has been tremendously successful and it is not even two years old,” he proudly states. “Advertising on our website has increased significantly year-over-year and we experience growth on what we call our Cineplex digital media side.”
All this good news seems to indicate there have been no negative reactions from advertisers because of the so-called 2011 box-office slump and decrease in attendance. (Never mind that, at press time, we’re already up some 17% this year.) NCM’s Marks saw no pushback on what he calls “our ratings,” the amount of people who come to the theatre. “In any given year, our ratings could be up 3% or down 3%, which means we have more or less impressions to sell.” Drawing another comparison to television, he doesn’t believe that “any advertiser would say, ‘This or that channel is down 4% over last year, and we shouldn’t advertise there any more. Nor do I think they say, ‘Look, it’s up 5%, that’s where we should do our advertising.’ Marketers select the medium…for the characteristics and the qualifications of the audience. In our case, the number-one items that advertisers like about cinema are the engagement and the recall. Whether our audience is up 3% or down is not going to determine how much money comes to the medium. They will like us for the characteristics that we possess.”
Cineplex’s Bachir can equally attest to growth opportunities continuing over the next few years. “Media sales is one of the fastest growing areas of Cineplex Entertainment by far and it is also a high margin portion of the business. It has a tremendous impact on our overall bottom line. Looking back to our acquisition of Famous Players in 2005, when media revenues were CA$34.2 million, we have delivered at an annual compound growth rate of 19.2% to some $82.3 million at the end of 2010. While that is fantastic, obviously, it gets even better when we add the 2011 numbers, which increased another 11.1% to a record annual revenue total of CA$91.2 million.”
Not everyone is listening, however. “One reporter tried to tie box-office decline to increased theatre advertising,” Mitchell recalls. In reality, continued research on advertising perception of moviegoers has shown, “there has been no negative feedback from moviegoers about advertising. They’ve actually come to anticipate it as part of the experience.” Particularly when buying around potentially big movies, “the Hollywood buzz always has an impact,” he continues. “But large companies like Procter & Gamble have actually evaluated the cinema audience as a valuable component in what we call their ‘video investment’ portfolio. They look to buy video impressions on television, online and in cinema,” he explains. “Because of the powerful recall and the engagement level of cinema,” what they have found over and over again is “it plays a role not only as a brand launch medium but also as a sustaining power for an ongoing media plan.”
Supporting that assessment, Mitchell has “already seen a very big uptick in our pre-commitments” at Screenvision. “Similar to what television networks do, we have an ‘upfront’ for new commitments for the coming year. We try and sell longer-term packages to brands and advertisers who will buy either the full calendar year going forward or multiple quarters at a time. Our increases are all double-digits on the upfront sales that we’ve done already.” (On May 16, National CineMedia will premiere its first upfront event at AMC Loews Lincoln Square in Manhattan.)
At the center of the success of cinema advertising is the moviegoer, Mitchell concludes. “As consumers take more and more control over how they consume media—for example, with the expansion of DVR usage in the home—that continues to build an increased value to commercial-friendly environments like cinema.” In Mitchell’s view, it is not solely that moviegoers cannot move to avoid messaging, but about making that “advertising experience more fun and more enjoyable.” Going forward, one of the big steps in that direction will be “to really engage the audience in using their mobile handsets more during the pre-show experience.”
For more on how cinema and cinema advertisers have begun delivering on that promise, see our separate report.
Notable 2011-12 Cinema Campaigns
Allstate “Delete Text Driving”
Throughout December 2011, Screenvision and Allstate Insurance Company partnered on an important public-service announcement to moviegoers coast-to-coast. According to the Department of Transportation, 45% of annual U.S. driving fatalities occur during the holiday season, and more than 6,000 people now die and 500,000 are seriously injured per year due to texting while driving.
Kia Motors America
In a Super Bowl advertising first, Kia’s complete “Drive the Dream” ad premiered on Feb. 2, 2012 on movie screens nationwide in National CineMedia’s FirstLook pre-show program before airing during the football game. On a personal note by this author, the cinema spot also offered an extended narrative that actually produced a much more satisfying conclusion and memorable experience.
Sprint “Ticket Takedown”
The cinema program was implemented in July and August to support Sprint’s new tagline, “All Together Now.” The integrated campaign enabled moviegoers to work together to lower movie ticket prices by texting into a dedicated short code and/or going online to register. Those obtaining the promo code were rewarded with two tickets for $8 to be redeemed at Fandango or MovieTickets.com.
National CineMedia, 20th Century Fox and the U.S. Army worked collaboratively to create the new “Heroes” cinema spot, which crosscut film scenes with Army footage to “illustrate the parallels between the elite class of X-Men and the Army’s elite class of soldiers.” As the media release also noted, both the spot and online elements asked moviegoers to check out the Army’s Facebook page for an exclusive X-Men: First Class featurette piece.