It’s been a long road to recovery for theater owners since reopening their screens following the Covid-19 pandemic. Shorter exclusivity windows and fewer theatrical releases have contributed to an overall box office decline, putting pressure on operators to find revenue from every possible area. Cinema advertising has been an invaluable partner in this effort, connecting brands with moviegoing audiences at a benefit for all parties involved. While annual box office returns remain billions of dollars away from prepandemic levels, cinema advertising’s value proposition in recent years has increased because of the structural changes across the media ecosystem.
According to Nielsen, “traditional” TV viewership, a metric comprised of broadcast and cable television providers, accounts for around half of television usage across all platforms in May 2024. Meanwhile, streaming represented nearly 40 percent of viewership during that same period. Advertising remains the sector most affected by this trend, with streaming unable to provide the attention, viewership, or recall brands used to rely upon. The decline of traditional TV advertising has helped emphasize cinema advertising as the ideal home for video advertising. In the streaming business, brands often have less than 15 seconds to capture viewers’ attention before they can skip an ad. At the cinema, brands can be reassured of a highly engaged captive audience they can target by title, genre, region, and even showtime, providing a unique and effective platform for their advertising needs.
“If you look at significant cultural moments driven by media, they don’t exist as they used to,” says Mike Rosen, CRO of National CineMedia (NCM). “You don’t see linear television delivering those moments outside a handful of live sporting events. We no longer have that Thursday night sitcom everyone talks about on Friday morning. Cinema is the only place where that exists today. Marketers know that when Deadpool & Wolverine comes out, tens of millions of people will share that experience over 72 hours in its opening weekend.”
Viewers’ emotional connection with a highly-anticipated new film has proven to be one of the most appealing factors for brands to buy into cinema advertising in recent years. According to Amy Tunick, CMO of NCM, her firm sold out its ad inventory for the first four weeks of the theatrical run of Taylor Swift: The Eras Tour within weeks of the film’s announcement. NCM “Taylor-ized” (Tunick’s pun, not ours) its own specialized preshow for The Eras Tour, recognizing the title’s central role in the brand’s decision to advertise. The entire preshow experience was designed to deliver specific marketing messages tied to that particular film, an increasingly common trend for major releases.
“The best [preshow] content is the one that talks to the audience in the way that they want to be talked to while being reflective of the brand,” says Kathryn Jacob, CEO of UK cinema advertising leader Pearl & Dean. “You instinctively know, for example, when you see a Chanel or Rolex ad. Brand markers, whether sonic logos or visual iconography, are key to this association. The role of a cinema sales house is to act as the conduit for putting the right ad with the right content so that it feels resonant … if you want memorable, brand-building, and emotionally-resonant advertising, you need to be in cinema.”
Luxury brands like those mentioned by Jacob are particularly adept at identifying the most suitable cinema advertising platforms for their ad spend. Spotlight Cinema Networks—which specializes in advertising with art house, luxury, and dine-in cinema circuits in the United States—offers distinctive preshows appealing to different audience segments. “We listen to our partners and know the importance of providing a quality, cinematic preshow that enhances, and reflects, the cinema environment it appears in,” says Michael Sakin, president of Spotlight Cinema Networks. “Our art house preshow includes exclusive indie short films, relevant trivia, and eclectic music. The mainstream preshow features exclusive red carpets, press junkets, cast interviews from the most talked about movies, relatable trivia, and more. Additionally, we work with our exhibitor partners to customize the length of the preshow to meet their needs and review all advertising campaigns before appearing onscreen.” Spotlight’s boutique approach to cinema advertising is concentrated around theaters in urban, upscale zip codes with a national footprint. “The best theaters in top markets,” explains Sakin succinctly, “providing the ideal advertising platform to reach urbane, educated, influential adults within the top DMAs in the country.”
A successful preshow must also keep the advertisers’ priorities at the forefront. Screenvision Media, which has grown its national network to 14,300 screens in 2,300 locations across all 50 states, announced it would be “guaranteeing campaigns on any measurable business outcome” in an address by its CRO, Christine Martino, at its upfront in New York City earlier this summer. “We want the advertisers to feel like their brands are center stage,” says Screenvision CEO John Partilla. “They are front and center. They are the heroes of that preshow. We don’t want to take too much of a focus away from the brands themselves.”
Delivering on advertisers’ expectations has been central to Screenvision’s success. Jeremy Morgante, SVP of data and programmatic at Screenvision, singles out an increased demand for outcome-based measurement as the most prominent trend he’s observed in the cinema advertising sector. “While we advise all clients to measure brand lift and reach, which are the most important measures of our medium, other types of attribution studies—foot traffic lift, web visits, purchase lift, tune-in—are increasingly important to prove ROI,” says Morgante.
Programmatic advertising has also emerged as an important innovation to better address advertisers’ needs. “For the past 20-plus years, there was only one way to buy cinema advertising: a direct sale,” says NCM’s Mike Rosen. “Starting this year, we are offering a fully automated way to purchase, whether it’s our full network of over 18,000 screens, a single theater, market, region—or any combination that an advertiser prefers. Advertisers can now bid and run an ad on the same day. Now that they can buy ads programmatically, we’re seeing clients who had not previously purchased with us.”
Despite these innovations, the decline in box office performance has paused some advertisers’ media plans regarding cinema.
“Actual theater attendance is down compared with the period before the pandemic. Since advertisers are paying for impressions, the number of impressions available through cinema advertising networks is also down, and so is the overall spending by advertisers and the revenue of both theaters and ad networks,” explains Thaddeus Bouchard, president of cinema advertising company Screendollars. “On the other hand, cinema advertisers have expanded their offerings to counteract this by introducing premium ad placements that play immediately before the feature and introducing entertainment and advertising screens in the lobbies and other common areas of the theater. The net is that as attendance rebounds in what is expected to be a strong period over the next two years, beginning with the second half of 2024, revenue should eventually recover to a level approaching the prepandemic highs. From an exhibitor’s point of view, that’s great news since it’s essential to maximize all available revenue opportunities to have the resources to operate theaters and invest in the future.”
Screenvision Media, which partners with Screendollars as part of its advertising network, has introduced its Marquee Position ad spot in response to this trend. Marquee Position runs one ad after the trailers and before the start of the feature film, touting an ad recall rate of 88 percent, according to Screenvision. While that solution has helped mitigate the perception caused by postpandemic box office figures, Screenvision’s John Partilla remains confident that theatrical returns have finally turned a corner from the postpandemic challenges. “From the back half of this year onward, I think we’re finally all well positioned for the skies to clear and fully enjoy this exciting, rewarding business again,” he says.
Competitive pricing is another way for cinema advertising and exhibitors to compete. Parrot Film has been providing cinema advertising solutions to exhibitors since 1924. Its CEO, John Adams, believes competitively-priced local ads can compound to make a real difference for independent exhibitors’ preshow. “We believe [ads] should be priced low enough where everybody in town has an opportunity to buy. In the towns we service, we have clients who don’t care about their placement in the preshow. They want to be involved; they want to be part of the experience. When we have an advertiser who makes it a point to be the last spot before a film starts, we can make that happen at a price that makes sense for everyone involved.”
Ultimately, the real value of cinema advertising comes from the benefits it provides brands and exhibitors alike. In this era of media fragmentation, cinema remains the sole video venue that can bring together a mass audience and claim its undivided attention. “Our entire sector’s focus is on providing marketers and advertisers the opportunity to reach one of the most desirable demographics: millennials and Gen Z,” says NCM’s Mike Rosen. “The broader video landscape is going through significant challenges in reach, scale, and relevancy to those audiences. When people are at home, they can easily avoid ads through subscription streaming services. Cinema advertising allows brands to reach the hardest-to-reach audiences with the most spending power through a platform that can deliver the highest attention scores. It is the best value proposition in advertising today.”
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