In-Theater Ad Revenue Rises 21%

NEW YORK In-theater advertising revenue rose 21 percent to $527 million last year, for the first time breaking the $500 million barrier, according to a report released today by the Cinema Advertising Council.

The medium’s top advertisers in 2005 included American Express, the Army National Guard, Hyundai, Nike, Toyota, Unilever, Verizon, Wal-Mart and Microsoft’s Xbox gaming system, the CAC said.

With declining attendance (down 9 percent in 2005) and flat box-office revenue, in-theater ad sales have become critical for cinema owners, said CAC president Robert Martin.

“We see it as a core part of the business,” Martin said, noting that advertising is the third highest revenue source for theaters behind box office sales and concession stands.

Martin predicted that theater ads will surpass $1 billion in five years, “if not sooner.”

He cited two big growth drivers: advertiser demand for new channels to reach their consumers and the switch by the cinema industry to digital technology, which lets advertisers transmit their ads to theaters electronically.

“We see robust advertising growth for the foreseeable future,” he said.