Report shows 15% growth for in-theater advertising

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In-cinema advertising grew into a $455.7 million business in the U.S. last year, 15% better than in 2005 and far outpacing boxoffice growth during the same frame.

The Cinema Advertising Council is set to release Monday its 2006 annual report, which indicates that onscreen advertising jumped from $361.6 million in 2005 to $417.4 million last year and that the smaller offscreen category went from $33.2 million to $38.3 million.

Offscreen cinema advertising consists of lobby promotions, standees, ads on popcorn bags, sampling and any other form of marketing that is done inside theaters but not on movie screens.

While still just a small portion of overall exhibition revenue, the growth prospects for in-theater advertising far outweigh those of boxoffice and concession sales. Boxoffice revenue in the U.S. and Canada, for example, rose 5.5% last year to $9.5 billion after falling the previous year, according to the MPAA.

The CAC's data includes only the screens belonging to CAC members, which is the vast majority. Of 39,600 screens in the U.S., 30,800 of them sell ads, and CAC members own about 81% of those ad-selling screens.

CAC president and chairman Clifford Marks said that several industries already have embraced in-theater advertising, with newer ones including family restaurants, packaged goods and retail. Industries with more experience with in-theater advertising include automotive, movie studios, television, consumer electronics, telecom, financial services, educational institutions and the military.

About 70% of in-theater advertising comes from national advertisers, while 30% is regional.

One trend helping in-theater advertising maintain its growth trajectory is that about 18,000 ad-selling screens have upgraded to digital satellite systems that allow the same client to have different ads on different screens.

"They can buy nationally and sell locally," Marks said.

According to industry insiders, a four-week national campaign that would use the two top in-theater advertising companies -- National Cinemedia and Screenvision -- to blanket the nation's ad-selling screens would cost about $4 million. Under that scenario, the ads would be seen by 50 million-100 million moviegoers.

"The best thing to have happened in this industry is that both National Cinemedia and Screenvision have invested significantly to create entertaining preshows," Marks said.

One memorable spot has Vince Gill singing what sounds like a serious country ballad to a teary-eyed audience, though he's accompanied onstage by an apple and some grapes. It's a two-minute Fruit of the Loom underwear commercial.

"There's a trend toward longform marketing embedded in short, entertaining films, music videos or behind-the-scenes footage," Screenvision senior vp marketing Stu Ballatt said.

According to a TNS study in 2005, moviegoers exposed to in-theater advertising were 44% more likely to remember the ad than were viewers who saw a similar commercial on television.

"Marketers who were only experimenting with cinema three or four years ago are now demanding that their agencies make our industry's platform a must buy," Marks said.
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