Blockbuster season is a welcome boon for in-theater ads

Heading back to the movies? Advertisers are betting on it.

As viewers head back to theaters in droves, the companies that sell ads that run before the main show are breathing a sigh of relief. Armed with box-office data from films like Marvel Studios’ Doctor Strange (one of 2022’s biggest releases so far with $803 million in ticket sales after three weekends) and comparatively smaller titles like A24’s art-house hit Everything Everywhere All at Once (the studio’s highest-grossing release), the companies that manage in-theater ad inventory are betting that brands will be eager to market to popcorn-munching moviegoers.

“We’re here. We’re back,” John Partilla, CEO of Screenvision Media, told Marketing Brew ahead of the company’s upfront earlier this month. “We hope to recapture our place in the media ecosystem and in people’s media planning, and to remind them of our place in this super-premium video mix.”

The cottage industry of cinema

Whether it’s sponsored movie trivia, a traditional 30-second ad, or a big display next to the concession stands, in-theater advertising is big business. In 2019, revenue across members of the Cinema Advertising Council, whose members comprised about 90% of US cinema screens and box offices, saw revenues, mostly from on-screen advertising, exceed $809 million.

But that revenue only flows when movies are playing and audiences are showing up, and it goes without saying that Covid “knocked us out of our saddle,” Partilla admitted. The CAC did not collect data from its members in either 2020 or 2021, but box-office revenues overall were still at about half of pre-pandemic levels last year.

The US box office is still far from recovered, but the good news is that theatrical releases are roaring back, with just about every entertainment company committing to the in-theater experience and planning hefty summer movie slates. Anticipated blockbusters like Top Gun: Maverick, Jurassic World Dominion, and Thor: Love and Thunder are among the many titles expected to bring more people back to theaters.

That, of course, makes it easier to attract advertisers. National CineMedia, which has ad inventory in more than 1,600 theaters around the country, tracked an increase in advertising deals in Q1 in theaters, with auto, travel, dining, gaming, wireless, entertainment, and CPG brands leading the way, CEO Tom Lesinski told investors this month.

At Screenvision, automotive brands and CPG brands, which dialed back advertising spend due both to the pandemic and to supply-chain woes, respectively, are both intensifying their in-theater ad spend, as is travel and tourism, Christine Martino, Screenvision’s chief revenue officer, told Marketing Brew.

Across the CAC, members reported that auto, travel, alcohol, luxury goods, dining, wireless, and CPG brands, as well as entertainment brands advertising tune-in, were all returning to cinema screens, CAC spokeswoman Laura Adler told Marketing Brew.

All video is not equal

In-theater advertising offers some brands the kind of audience that is becoming increasingly challenging to find elsewhere: a captive one.

“There are some diehard theatergoers that get there early, they love the previews, they look forward to the previews, and even some of the advertisements,” Liz Phelps, managing director of integrated media at the agency PPK, told Marketing Brew. “They talk about them and they tend to recall them more. It’s more impactful.”

Phelps and PPK have had success marketing certain children’s brands in theaters, including a campaign for Legoland Florida that ran during the releases of films in The Lego Movie franchise like The Lego Batman Movie. Children are hard to reach in other mediums due to restrictions on targeting and tracking, but advertising around a kids’ movie is a surefire way to reach them. (Bonus: families may arrive to theaters earlier, giving them more time to watch pre-preview advertising.)

Retail brands may also find a particular use case in movie theaters, especially if their brick-and-mortar locations are close by, she said.

Stream all about it

There has been much hand-wringing about streaming media’s negative effects on theatrical releases. But streaming media is actually a big spender on in-theater advertising; over the last two years, streaming media brands have grown to be the second-largest advertising category at Screenvision, Martino said.

“The streamers—the ones that are looking for new paid subscriptions—are coming to cinema to advertise because they know that’s where their audience is,” Martino said, adding that since last fall, Paramount+ has advertised most of its new releases to movie-goers using Screenvision’s in-theater advertising.

The growth of streaming has benefited in-theater advertisers in another unconventional way, Martino said. Screenvision promises advertisers access to a group they label “the elusives:” 30 million 18–34 year-olds who exclusively watch non-ad-supported streaming and do not have linear TV.

“We reach 75% of them, with 22 million elusives going to the movies,” Martino said. “We feel really strong about being able to say, ‘There’s this core audience you really can’t reach through any other traditional video means—but you can reach them in cinema.’”