Before the Feature: In-theater ad revenue continues growth

New numbers from the Cinema Advertising Council show in-theater advertising revenue continues to grow rapidly.

The group, which represents 82 percent of the screens in the U.S., reports revenue rose 18.5 percent in 2007 to land just short of $540 million. In 2006 revenues were $455.7 million.

That’s good news for exhibitors, who are seeing concession sales fall off due to more health-conscious audiences. It’s also money that they pocket directly instead of needing to split with the studios like they do box-office prices.

The report shows more advertisers are buying in to cinema ads, growth that’s likely attributable to studies showing audiences are more accepting now of such ads than they were a few years ago and that brand recall is higher than in some other media.

Local ads are growing in number as technology improves both in terms of production but also targeting. National advertisers are also taking advantage of that targeting to more accurately run their campaigns in markets where sales or other promotions are happening.

Also growing are ancillary businesses like off-screen promotions and activities that occur in theater lobbies and elsewhere.

While I know some people continue to rail against pre-show advertising I’ve actually come 180 degrees on the idea. Yes, I still think this bucks the trend of other media offerings that offer content either for free or at reduced prices in exchange for advertising exposure. But when you look at the realities of the exhibition business – especially the fact that studios take such a huge percentage of the box-office take in the first few lucrative weeks – it becomes more understandable that theater chains are looking at advertising as a viable revenue source, one that can’t necessarily bring with it a direct audience advantage.

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