Movie Ad Growth Stalls

Cinema advertising—once laughed at for its corny prefeature slide shows or yelled at for ads running before the trailers—has grown into a more sophisticated medium with the statistics to prove it. But that’s a double-edged sword, as even this new medium feels the recession’s impact, with single-digit growth for only the second time in its history.Coming off explosive 18.5 percent growth in 2007, cinema advertising moderated in 2008, up 5.8 percent to $571.4 million. While it’s the slowest growth since the Cinema Advertising Council has tracked the business (see chart), cinema’s performance remains the envy of many other traditional media, if not a threat to their budgets. “A lot of [’08] dollars converted to cinema because of the writers’ strike, so advertisers had an opportunity to get comfortable with it,” said David Krupp, managing director for Kinetic in Chicago. “It gave cinema a springboard opportunity,” The recession has been a positive for box-office revenue in general, up 12 percent year to date on an 11.5 percent hike in attendance. Movie releases are more evenly spaced through the year, changing advertisers’ perception of cinema ads as seasonal. “No other medium can go into their clients’ office and say their audience is up,” said Dave Kupiec, CAC chairman and president, and exec vp of sales and marketing, National CineMedia.Cinema has even taken a bite out of the TV upfront, though it’s more like a nibble. “Screenvision broke the upfront with GroupM and Mediavest,” said Mike Chico, the company’s executive vp of sales and marketing, declining to name the advertisers. “We are a full-fledged part of the upfront.” Chico expects cinema ad revenue to end ’09 up 4 percent to 6 percent: “We saw some advertisers holding back earlier, but in the last three months, things have really picked up.” But it’s not immune from economic conditions as its purveyors have had to lower rates and skittish advertisers have held onto budgets until the last minute. “We wrote a seven-figure deal for a major national advertiser one week out. I couldn’t have predicted that two weeks ago,” said Cliff Marks, president of sales and marketing, National CineMedia, which grew 1Q ad revenue 11.5 percent. “We’re guardedly optimistic.”Cinema Ad GrowthYear Rev (Mil.) % Chg.2002 $185.80 2003 $273.00 47%2004 $367.46 35%2005 $394.80 7%2006 $455.66 15%2007 $539.95 18.5%2008 $571.42 5.8% Source: Cinema Advertising Council based on data from Miller, Kaplan, Arase & Co.

Performance Marketing

Movie Ad Growth Stalls

Katy Bachman

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Katy Bachman