In-cinema advertising catches advertiser eye

In-cinema advertising is just 0.5% of the total advertising pie, but the reach and impact of this medium is making advertisers sit up and chart its growth

e4m by Shobhana Nair
Published: Feb 25, 2013 9:08 PM  | 6 min read
In-cinema advertising catches advertiser eye

In-cinema advertising is just 0.5 per cent of the total advertising pie, but the reach and impact of this medium is making advertisers sit up and chart its growth. In 2012, this sector yielded a revenue close to Rs 210 crore (according to Magna Global), showing a growth of around 35-40 per cent.

From projector ‘slides’ of Lux soap to the perennially running ‘Vicco turmeric, nahin cosmetic’ jingle, the trend became a norm and is now a medium by itself.

Raking up the numbers
S Venkatesh, Sr EVP – Director, Intelligence Practice of Magna Global said, “Cinema advertising has grown at a CAGR of 11 per cent in the last five years. It has seen its share of low points though. In 2009, while the stalemate between theatre-owners and producers was one of the reasons, IPL and the swine flu scare kept the audiences away. In 2012, while most advertisers maintained their budgets, government spending on cause and consumer awareness went up significantly, curbing the de-growth.”

Anand Vishal, Sr VP – Operations and Sales, Fun Cinemas shared, “The total advertising pie may sound less, but it’s an important chunk for multiplex owners. On a ticket worth Rs 100, cinema owners don’t pocket the entire amount. It gets divided among different stakeholders. But when it comes to ad revenue, we bag the entire amount and hence, it stands at about 50-60 per cent of the total multiplex bottom line.”

Entertainment Entertainment Entertainment
Siddharth Bhardwaj, CMO and National Sales Head – Corporate, UFO Digital Cinema said, “Entertainment is the most aspirational space for any advertiser to be in. A brand wants to be where the viewer is in a positive frame of mind. This year, we have already doubled the number of advertisers through cinema advertising.” To spell out what he refers to, UFO earned an approximate Rs 35 crore during the last financial year and it’s now targeting around Rs 75-80 crore in 2012-2013. The confidence comes from the fact that from 200-odd clients last year, it has fetched close to 350 this year. And how is that? Well, we see a direct link between that and UFO’s exclusive tie-ups with 3,000 screens in India. Which media planning agency would find it tough to identify key markets this way?

Another cinema advertising medium – Qube Cinema Network (QCN) by Real Image Media Technologies has a network of 1,700 screens across the country, with a strong presence in the South and it claims to have a reach akin to a General Entertainment Channel (GEC). In fact, in Tamil Nadu, QCN is second only to Sun TV in terms of effective reach in the state.

MS Rajagopalan, President of QCN said that cinema advertising in India has the potential to cross the Rs 1,000 crore mark. “People have always considered cinema in a tactical way for big occasions such as Diwali, Eid or the A-list release. With this attitude, the industry will remain small, at Rs 200-250 crore. Of course, cinema cannot replace TV, but can definitely stand alongside it. Research clearly establishes TV plus cinema works better than TV alone,” he said, adding, “There’s a media multiplier effect that TV and cinema bring in.”

In order to provide metrics like TV does, QCN took the initiative and appointed The Nielsen Company to conduct a survey based on the house-to-house IRS pattern. This analysis in Tamil Nadu showed that even using a conservative impact ratio of 1:3 for one exposure on cinema over one on TV, QCN can generate effective reach that could rank it amongst leading TV channels.

A far cry from TV ads?
Few large players rely on occupancy and ticket sales data to understand audience preference. Cinema lacks audience measurement unlike TV or print, which have TAM and IRS respectively to their rescue. In cinema, audience measurement would mean more brands turning up with faith. Ashok Ganapathy, CEO, Reliance MediaWorks stated, “The footfalls are there but it’s about getting the industry organised through audience measurement. Till then, it’s very difficult for big advertisers to be interested. You need a system to monitor if required.”

So while nobody’s questioning the effectivity of this medium or its reach, the debate which always sparks when media planners chalk out plans for their clients is ‘cost per contact’ in comparison to TV. For instance, if a brand shells out less than a rupee on a single person in TV, the cost rises to Rs 2–3 per person in cinema. This is a major deterrent and it forces many brands to make midget budgets.
Nandini Dias, COO, Lodestar UM questioned, “How do you expect cinema to have the cost efficiency of TV? It will never have. And then the advertisers will always talk to select well-to-do families, not being able to go to the masses. If you compare cost per contact on TV and cinema, the latter is terribly expensive! Hence, brands come on board only during big-ticket movie releases and occupancy is guaranteed.

Digital is the key
Audience measurement and cost effectiveness aren’t the only reasons holding brands back from deep-diving in cinema advertising. Out of the over 11,000 screens (single and multiplexes) in India, an approximate of 6,500 are digital. This means that for the rest, i.e., analogue cinemas, there’s no accountability of whether the ad was played at all!

Rakesh Endlaw, Media Head, Dabur added, “Cinema is a very effective medium; but in smaller towns, it is not structured. We don’t know whether the ad ran or not. In cities, things are more structured and monitoring is possible. But with cinema going digital, especially in the South, this picture is looking more optimistic than before. Earlier, associating with cinema was a tedious and expensive process due to analogue prints.”

Ajay Mehta, MD, Interactive Television, of which GroupM holds 60 per cent stake shares, said “Three-fourth of cinema advertising is happening in multiplexes. Will that always be the scenario? No, because single screens too are getting higher footfalls due to new film releases through digital technology. Single screens will start getting a lot of advertisements in the coming five years.”

Cinema advertising has a long way to go from being a mere Rs 210 crore industry. Clearly, digitisation and audience measurement are major roadblocks that cinema owners will have to overcome. And for brands, just running a 30-second spot will not get them anywhere, a ‘shock laga’ treatment using the 70-mm screen we, as a nation, are so obsessed with watching, will take the industry forward.

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