Cinema ads slow but still grow

5.8% growth in 2008 down from 19% in 2007

Revenue from advertising in U.S. movie theaters grew just 5.8% last year, marking the slowest gain in the seven years that such statistics have been kept.

Still, the Cinema Advertising Council, which is expected to release its 2008 report Monday, can boast of an ad industry still showing growth while most others are not.

"Media has seen such huge slippage -- with audiences and advertisers both leaving -- that to have a medium with growth is significant," CAC president and chairman David Kupiec said.

According to the CAC, cinema advertising in the U.S. grew 5.8% to $571 million in 2008, down from 19% growth the previous year and 15% the year before that.

The CAC has been keeping track of revenue generated by the industry since 2002, when the industry took in just $186 million. Since then, it has grown at an average clip of 21% each year.

The CAC measures ad dollars from onscreen and other in-theater initiatives but only at member theaters, which account for 82% of U.S. movie screens.

Kupiec said that this year theaters are closing more ad deals than last year, but, because of the weak economy, they are smaller in size.

Advertisers pay a premium on a CPM basis for cinema advertising compared with television because the recall rate is as much as five times greater, Kupiec said.

Cinema ad campaigns can run as high as $2 million a month for ads on 30,000 screens. On a CPM basis, they usually run $30-$40, about twice the going rate for primetime television.

In 2008, 90% of cinema advertising was of the onscreen variety, while lobby-based ads, sampling, concession promotions, etc. made up the other 10%.

The CAC said 77% of the ad revenue last year came from national and regional advertisers and that the remainder was from local sales.
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