Coming Soon: More Ads Tailored to Your Tastes - Advertising in movie theaters - Brief Article - Statistical Data Included

American Demographics, August 1, 2001

Welcome to the new movie pre-show. First up, those ubiquitous trivia slides, accompanied by an "in-theater radio" audio track. Then, there's that strangely outdated in-house promo for popcorn, soda and audience silence. Next, viewers are treated to a host of spots for everything from sneakers to sitcoms. When the lights finally dim, an ever-lengthening barrage of trailers fills the screen. By the time the movie starts 20 minutes later, the audience is often restless and annoyed.

But lately the catcalls and hisses are dying down as audiences acquiesce to the reality of in-theater advertising. They are wise to do so, because on-screen ads are only the beginning of today's exhibitor advertising boom. In addition to an influx of on-screen commercials, there's more advertising on movie tickets, popcorn bags and soda cups; sponsorship opportunities for meetings and special events; promotions in lobby displays, interactive kiosks and on TV screens; as well as ads on theater chain Web sites. In 1992, advertisers spent around $40 million on movie theater ads. Today, cinema advertising is estimated to be a $200 million industry, growing at an annual rate of 20 percent, according to National Cinema Network (NCN), a theater advertising services provider. In a new twist, many theaters now offer sophisticated ways to match ads to target demographic groups. As a result, a perfume ad can run before a Meg Ryan romance, while an SUV promo can appear before a family film.

Movie advertising is thriving precisely because the exhibitor industry is in such a sorry state. Over the past year and a half, seven major theater chains, including Loews, United Artists and Silver Cinemas, have filed for bankruptcy. The industry brought much of the problem upon itself, with a spate of expansion at the same time that sales of tickets were dropping - though recently sales have bounced back. A correction to multiplex mania is kicking in, though it's far from solving the industry's problems. The number of screens has fallen slightly - to 36,264 in 2000 from 37,185 in 1999, according to the National Association of Theatre Owners - and is expected to drop to about 30,000 by year's end. But cutting back on cinemas isn't enough to ensure profitability. "It's no secret how the exhibitor industry is doing," says Suzie Grieco, executive director of marketing for NCN. "With theaters