Maturing market: Cinema advertising scores a Super Bowl touchdown
“The general media industry in 2012 was pretty good.” As president and chairman of the Cinema Advertising Council (CAC), Cliff Marks, who is also president of sales and marketing at NCM Media Networks, opens our annual conversation with a cautious observation. “The big trend in the media industry is that brands are no longer buying what we call traditional media but migrating their money into digital media”—such as social and mobile media, search-based advertising and online video.
With official 2012 numbers not expected until around CinemaCon, it was hard for Marks to give exact details about the entire industry. (For information about NCM’s 2012 performance, see http://investor.ncm.com/releases.cfm). Still, he shares some insights on the overall trend line: “2012 was a good year with some moderate growth. However, we are clearly seeing a slowing down of that growth where double-digit increases are more challenging. Cinema advertising is a much more mature business now and we are experiencing much higher sell-out levels of well over 90% of available inventory.”
That is certainly good news, since 2011 recorded the first year-over-year decline since 2003, the year in which the CAC was founded as a national nonprofit trade association (www.cinemaadcouncil.org). Looking back at the past ten years, the cinema advertising industry has grown nearly 2.5 times, generating over $4 billion in total spending. Since 2007 alone, with average annual growth rates of 15.7%, revenues amounted to $600 million per year. (Detailed data available in our exclusive table below.)
In view of the anniversary, some reflection seems in order. “I am the only one left from the original founding members. The last man standing, if you will,” Marks adds with a chuckle. At the time with Regal CineMedia, Marks was joined by Chuck Batty of National Cinema Network and Screenvision’s Matthew Kearney. The former companies later became National CineMedia in March 2005 and went public in February 2007. “The idea behind the CAC was to have an entity that is the voice of cinema twelve months a year and does what is best for cinema media marketing. The CAC was really built to think about how we market the cinema medium best.”
Under the CAC bylaws, the position of the president rotates year over year. Marks has been responsible for managing the organization a record four out of five possible years, with the balance year covered by Dave Kupiec, NCM’s current executive VP, sales and marketing. Suzanne LaForgia (senior VP, national and regional sales, at Screenvision), Stewart Harnell (president and chief executive officer, Cinema Concepts) and Jerry Rakefeldt (president, Spotlight Cinema Networks) join Marks on the CAC board of directors.
The CAC works, Marks has observed, “because it represents the collaboration of all the entities in the cinema industry, and not just the sales companies. We are all here to do what’s best for the cinema industry. It is the one place where we can get together and discuss what we think we need to do to grow the business. Anything that the CAC does benefits everyone,” he states, giving a shout-out to theatre owners, marketers and moviegoers alike.
Returning to 2012-13 developments, the ratio between local and national cinema advertising has not much changed. “Somewhere around 75 to 80% of most of the revenue comes on the national side,” Marks elaborates. “Local business continues to be strong, and here at NCM we are finding regional to be a very good business.” Bookings by DMA are up from universities, hospitals and in the automotive segment, he says.
Considered a possible boon to the business not so long ago, the number of 3D advertising deals remained the same (about 15, including Marks’ summer favorite for Samsung Galaxy SIII). “There are certain brands that definitely like 3D, but it doesn’t seem to be a really high growth area for now.” The number of 3D-enabled auditoriums—about 10,000 in the NCM network alone—certainly provides “effective scale and national reach.” The growth potential is more of an issue of television, he believes. “Once they have figured out how to put more 3D television sets into living rooms and people start watching more in the format, more stereo ads will be produced to run both in cinemas and at home.” Further on the technology front, Marks “foresees our 4K rollout completed in virtually all of our theatres that have 4K projectors” by year-end.
“We continue to be very strong with certain categories,” he notes, citing “entertainment, videogames, automotive and wireless companies, electronics. And while we are starting to see more business from retail, family and quick-service restaurants, cinema needs to continue to expand our client base and have more categories and more clients use the medium.”
At NCM, the 2012 holiday season enjoyed great response from retailers such as Best Buy, Kohl’s, Old Navy, TJ Maxx, Sears and, perhaps the most shining example, Forevermark Diamonds. The De Beers group brand debuted its first-ever national television and cinema campaign. “Praise from Forevermark’s retail partners and social-media audiences has been significant as well,” NCM notes. (More about this and other notable campaigns in our sidebar.)
The combination of cinema and television has proven to be a rather effective tool, as well as an industry-wide trend. Marks mentions how the results of a study commissioned by NCM—though all research is made available to CAC members and their brand partners—revealed that “the cinema experience has a significant influence” on a consumer’s ability to recall and to enjoy advertising. The analysis included over 1,350 standard ads with identical or similar TV and cinema creative across 29 distinct product categories. Utilizing Nielsen IAG’s web-based panel technology, scores were collected from persons who saw said spots within NCM’s FirstLook pre-show and on broadcast and cable television over the past five years. Combining cinema increased brand recall by 65%, while message recall nearly doubled and likeability was up 79% as compared to TV only.
In light of “television audience fragmentation and erosion,” Marks opines, “this study truly proves what a great complement cinema makes to any TV buy.” Reiterating his message first delivered during the “enormously successful” 2012 NCM Cinema Upfront, which will be repeated during the next television buying season in May, he says, “NCM is a big network like all these other television networks and we deserve our money upfront just like them. As a matter of fact, Nielsen numbers have demonstrated that on any given Friday or Saturday night, NCM is the number-one network in America as it relates to net reach in the amount of people. That’s a strong message: Two of seven nights we are number one, especially as you look at more narrow-cast demography like adults 18 to 49 or 18 to 34.”
Given that audience dominance and presentation impact, it should come as no surprise that Super Bowl ads premiering at the cinema were another industry highlight. In 2012, Kia Motors had become the first brand to showcase its super spot on the super screen. “This year, to help shine a spotlight on all this great creative,” NCM launched “a premium placement pod” called the “Big Game Ad Showcase” for previewing “the best in Super Bowl advertising.” While four other brands joined in, the 2013 Kia spot and teaser were scheduled on an additional 14,000 screens on the Screenvision theatre network for a total of more than 33,000 U.S. movie screens.
Going forward, will these and other successes continue at the cinema? “I believe brands want consumer engagement and they want to be able to reach their customers in different ways,” Marks responds. “I think cinema advertising as a whole needs to figure out how we can diversify and give brands a way to use the cinema medium that goes beyond simply running 30-second commercials. And I don’t that think any of us—as exhibitors, cinema marketers—have spent a lot of time thinking about that,” he acknowledges. “I like to say cinema is a great one-trick pony. Granted our trick is very, very special: It’s tall, big screens; captive and engaged audiences; and it’s very effective. But I would challenge everyone in the cinema industry to put that behind us and to think about how we can create more integrated offerings by using social, mobile and online video to enhance the packages that we sell.”
U.S. Cinema Advertising Revenue
CAC Member Revenue and % Growth:
2003: $273,000,000, 47%
2004: $367,456,000, 35%
2005: $394,830,000, 7%
2006: $455,661,000, 15%
2007: $539,946,000, 18.5%
2008: $571,421,000, 5.8%
2009: $584,067,000, 2.2%
2010: $658,255,000, 12.7%
2011: $644,294,000, -2.1%
Source: FJI archives; CAC 2011 Report for member companies, representing nearly 90% of U.S. cinema screens based on NATO’s count of 39,641; annual report independently tabulated by Miller, Kaplan, Arase & Co. LLP; 2012 industry numbers to be announced in April.
Cinema Campaign Highlights:
The De Beers group presented its first national television and cinema campaign, “The Center of My Universe,” during NCM’s FirstLook pre-show in 61 markets nationwide as part of a co-op program with Forevermark retailers. The participating theatres were selected both for their high attendance and location in areas with a high ratio of Forevermark’s target demographic of affluent consumers. According to cinema industry research, frequent moviegoers are 33% more likely than the average person to buy diamond jewelry and 47% more likely to have spent over $1,000 on fine jewelry in the past year. Traffic to www.ForevermarkDiamond.com increased 704% compared to four weeks prior to the cinema ad running.
GED Achievement, DoSomething.org
Developed by the Ad Council and Dollar General Literacy Foundation, the national “Get Your GED” public-service campaign debuted during Screenvision’s newly redesigned “Limelight” pre-show from March 30 to April 22, 2012. “Featuring our messages for the first time in cinema theatres,” said Peggy Conlon, president and chief executive officer of Ad Council, “will help raise awareness of this important issue to millions of Americans. We are thrilled to collaborate with Screenvision…to ensure that all Americans have the opportunity to achieve their full potential in life by obtaining their GED [General Education Development].”
Adding fun and facts in the form of trivia slides, “the audience can learn stats about important social causes and use SMS to sign up for more information and action opportunities while they’re waiting for the movie to start.” Naomi Hirabayashi, director of marketing at DoSomething.org also noted, “Buttery popcorn plus becoming a more socially conscious citizen? Double whammy.”
Cineplex Media’s campaign with the Canadian wireless provider covered online, print and in-theatre components throughout December. It also featured a TimePlay game where moviegoers were invited to use their smart-phones to score points for prizes by throwing (virtual) snowballs at El Tabador, Koodo’s animated mascot. The TimePlay Impact Study, conducted by the Strategic Marketing Council, revealed the highest total awareness scores across all measured telecom campaigns in the past six years. Contest entries and opt-ins were in the thousands and among the highest of Cineplex Media results recorded.
In June 2012, Samsung launched the biggest cinema advertising campaign ever across the United States. The exclusive marketing relationship in support of the Samsung Galaxy SIII smart-phone encompassed NCM’s full national 2D and 3D on-screen network; NCM’s Lobby Entertainment Network of over 2,800 screens in high traffic locations throughout over 1,300 theatres; online and mobile advertising across NCM’s Interactive and Mobile Networks; and, on 53 screens, the first 3D interactive audience game created in collaboration with Audience Entertainment.
This Canada-wide campaign for the fashion retailer included full-motion pre-show and lobby signage components, as well as print elements in Cineplex Magazine. The concept was a text-to-win contest, offering access to an Urban Planet shopping spree, free movies for a year, and a weekend for two in New York, Miami or Los Angeles.
In an effort to promote its “Great Big Toy Testing Event,” Walmart Canada partnered with Cineplex Media to create spots for the pre-show spot and for digital lobby screens. The campaign also included a full-page ad in the circuit’s customer magazine, as well as on-site activations in Toronto, Vancouver, Calgary and Edmonton. These in-theatre activities were timed in concert with the release of Finding Nemo 3D, Hotel Transylvania and Frankenweenie.
Super Bowl in Cinema:
Kia Motors America
The automaker’s full 60-second “Space Babies” ad premiered on Feb. 1 on more than 19,000 movie screens in NCM’s FirstLook pre-show plus on another 14,000 in Screenvision’s Limelight program, before airing on TV during Super Bowl XLVII. To build anticipation, Kia had teased audiences with a 15-second spot starting on Jan. 25, all in a “premium placement pod” under the headline of “Big Game Ad Showcase.”
The “Viva Young” Super Bowl commercial hit 19,000 big screens on the day of the big game (Feb. 3) and ran throughout the following week. “Taco Bell’s cinema launch strategy builds on the brand’s past big-screen success and is a great way to extend the Super Bowl buzz beyond the big game,” NCM noted.
CBS, E*TRADE, M&Ms
As one of NCM’s exclusive content partners, CBS ran a 2.5-minute entertainment content piece about the making of the “2 Broke Girls” Super Bowl spot in NCM Media Networks’ FirstLook. To “generate additional exposure,” Mars added the new M&Ms spot to the pre-show beginning after the game. The well=known E*TRADE Baby showed everyone how to “Save It” on approximately 23,000 screens in both FirstLook and Limelight programs.
(Compiled by Andreas Fuchs, based on cinema advertiser information.)
Cineplex Media Moves Moviegoers
Revenues in the second half of 2012 exceeded the same period in 2011 by 6.1%, Cineplex Media reports about Canada, where its affiliated theatres represent 93% of the box office coast-to-coast (www.cineplexmedia.com). For the full year, however, media revenues decreased 7% compared to the record set in 2011. “This was largely a result of economic uncertainty and a hesitancy in advertising budgets,” explains Mike Langdon, director of communications at corporate parent, Cineplex Entertainment. “In addition to full motion advertising in our pre-show, we’re seeing advertisers incorporate other aspects of cinema advertising in their campaigns. This means advertising opportunities for cineplex.com, the Cineplex mobile app, Cineplex Magazine and our digital lobby show.”
As “some advertisers are taking advantage” of 3D film releases to present their spots in 3D, they are moving the audience in other ways too, quite literally so. “Cineplex Media achieved an advertising first this February,” Langdon explains about the trip-to-space initiative for Axe Apollo in support of the company’s “Space Academy” promotion. “The campaign is the first in-theatre advertising specially coded to work in concert with D-BOX Motion Seats.” He calls this “premium entertainment offering…one of the hottest technologies in cinema today, providing a multi-sensory enhancement to the action on the big screen.”
Having audiences interact with what’s up on that screen makes the TimePlay platform another “good example of Cineplex Entertainment being on the forefront of cinema advertising.” TimePlay (www.timeplay.com) allows moviegoers to use their smart-phones to interact in real-time through a WiFi connection, Langdon says. “Guests can play games and participate in other on-screen challenges, with and against friends, family and other audience members.” They receive 50 points for their SCENE loyalty account just for trying. The ten highest-placed players on the on-screen leaderboard receive a free large drink with a purchase of popcorn. In December, Cineplex expanded TimePlay from Toronto to Vancouver and brought the total installations to 231 screens in 20 theatres.
(For more, see our “Rewarding the Audience” story.)