Came, If Gradually
A Canadian Perspective
by Howard Lichtman
Over 15 years ago, as executive vice president
of marketing and communications for Cineplex Odeon, I began
rolling-stock on-screen advertising in Canada. Several
years later I did the same in the United States. My success
in Canada was significantly greater than in the United
States, primarily because I was able to offer advertisers
a national network in Canada but I could only offer certain
markets in the United States. We did not have the scale
in the United States to attract advertising agencies and
I thought it would be helpful to offer some
insight into what we went through at that time. My American
seem to be going through the same growing pains we did.
real question is: Is advertising in a particular
venue so distasteful to you that it’s going to
change your attendance habits? All our research said
no. People weren’t even willing to spend five
cents more in terms of movie ticket pricing to be advertising-free.
The first issue that an individual theatre
owner faces is: What do my consumers think? Will they
stop going to
my theatre and start going to my competitors’ theatres
if I show rolling stock advertising?
The industry as a whole has to be concerned
about whether moviegoers in general will go to movie theatres
due to advertising. In every business situation there is
both risk and reward, and this represents the risk portion.
The reward was obvious. We had our eyes
on Europe and we understood that screen advertising in
Europe and elsewhere
in the world represented slightly less than one percent
of total advertising expenditures across all media. If
the same expenditure was applied to United States, it could
generate over $2 billion – in a market where box
office gross accounts for only $9.5 billion annually. Remember
also that a huge portion of screen advertising income flows
to an exhibition company’s bottom line.
We had looked at several theatre companies
in Europe and found that, for many of them, all of their
net profit could
be ascribed to screen advertising. There was simply too
much potential revenue on the table to ignore this opportunity.
What about the risk? Moviegoers were our
bread and butter. If we alienated them or lost market share
we were out of
We spent a lot of time researching the issue
and our research showed that over time consumers would
Let me clarify. For the most part, moviegoers don’t
love cinema advertising. Asking somebody whether they like
cinema advertising or not really isn’t a relevant
question. Imagine asking someone whether they like taxes.
Who’s going to say yes? Ask anybody whether they
like advertising on the Internet. Ask anybody whether they
like advertising on television. Ask anybody whether they
like advertising anywhere. Advertising is not something
you like. The real question is: Is advertising in a particular
venue so distasteful to you that it’s going to change
your attendance habits? All our research said no. People
weren’t even willing to spend five cents more in
terms of movie ticket pricing to be advertising-free.
Our experience reflected some of the trends
noted in the recent excellent Arbitron study on cinema
It found that the more often people went to the movies,
the higher the acceptance of cinema advertising. Those
who rarely or never attend movies are less likely to find
movie advertising acceptable, while frequent moviegoers
find cinema advertising very acceptable.
Beyond the natural tendency to not “like” advertising,
one of the reasons we’re seeing consumer protests
and negative media coverage is that Americans are simply
not used to seeing ads in theatres. Whenever you introduce
advertising into an advertising-free environment, there
are going to be people who don’t like it. Once it
becomes a natural part of the moviegoing experience, it
truly becomes a non-issue. You need not fly to Europe to
see screen advertising working, I invite everyone to come
up to Canada where advertising is now an accepted part
of both the moviegoing experience and is an integral part
of advertising agencies’ media spending.
I caution everyone that the first couple
of years are not easy. There is a small percentage of people
who truly hate
ads in the theatres and they are quite vocal. They often
crave media attention and a negative article about screen
advertising is an easy story for reporters.
Your natural next question is: Were we harmed
by rolling stock advertising? It’s a difficult question to answer.
I’m sure we didn’t lose any attendance over
this issue, but occasionally we were perceived as “the
bad guy” in the media.
In order to be successful at this you must
redefine the business that you’re in. Traditionally
movie theatres have been in two businesses: exhibiting
and selling concessions. What we did over a decade ago
was discover a third business: on-screen advertising. To
properly exploit the opportunity we had to treat it as
a real business and not a sideline. Realizing that both
advertisers and agencies were interested in the attractive
audience we delivered, we began to expand the horizons
of our advertising vehicle. About eight years ago we installed
TV monitors in all of our lobbies (I recently saw some
incredible new technology for theatres which combines the
hardware, content management software, and delivery system
for this), we offered sampling and couponing, and we even
sold advertising on our popcorn bags.
The first companies I targeted for popcorn-bag
advertising were the studios. Our booking department told
me that I
would never make a sale. They said that studios would never
purchase advertising from exhibition. It wasn’t part
of the symbiotic relationship between studios and exhibitors.
They would never pay money to exhibition for in-theatre
exposure. Undeterred, I went to knock on the various studios’ doors.
Needless to say, virtually all of them were slammed in
my face. There was, however, a fledgling distributor that
was not at the time aligned with a major studio. Its name
was New Line. It didn’t have the budget to throw
at their films the same way that bigger studios did. It
decided to purchase the advertising on our popcorn bags.
It understood that it was a relatively inexpensive advertising
medium speaking directly to the moviegoers. New Line thought
of exhibition the way that exhibition should be thinking
of itself: an advertising medium that reaches an attractive
audience. It’s not enough just to say you’re
in the screen-advertising business. You have to understand
that this is a separate business entity and structure yourself
In the very near future a fourth business
will be added to the exhibition mix: alternative programming.
for many it is in an experimental model and a fledgling
enterprise, I predict that over time many exhibition companies
will establish entire divisions to oversee this emerging
source of income.
In the meantime, best of luck to you all on the screen
Howard Lichtman is president of The
Lightning Group, a strategic marketing consultancy practice.