Spending on cinema ads spikes

Theaters bullish as commercials, promos bring in nearly $540 million

Cinema advertising spending in the U.S. continues to grow at a rapid pace, jumping 18.5% to $539.9 million last year.

The latest data from the Cinema Advertising Council, whose members account for more than 82% of the total cinema ad revenue, shows 92% of total spending coming from onscreen commercials and 8% from other promotions in movie theaters.

On- and offscreen ad revenue rose 18.5% each to $494.6 million and $45.3 million in 2007, respectively.

CAC president and chairman Stu Ballatt predicted that the industry's double-digit percentage growth path would continue "for the next few years at least."

He said a sluggish U.S. economy does not seem to slow marketers' willingness to put money into cinema promotions. Ballatt cited increased activity across many sectors, with cinema ad spending by packaged goods and retail companies showing strong growth during the past six to 12 months.

Overall, Ballatt lauded the increased upfront sales mentality in cinema advertising.

"More advertisers are embracing the value proposition of cinema advertising — such as high recall and engagement — more regularly," he said. "They used to see it more of a once-a-year tentpole event."

He also talked up the value of integrated campaigns using on- and offscreen messages. These can "double or triple the impact a brand can make on the moviegoer," he said.

Asked about the effect of union strikes on cinema ads, the CAC head suggested that the WGA strike did not have a material positive or negative effect. "SAG ripple effects are possible, but we don't project a benefit or negative impact in the near term," Ballatt added. (partialdiff)