Advertising at movie theatres may be the fifth or sixth preference for a media planner, and the market size still a fraction of the total advertising pie. But the market is growing at 35-40%. Shobhana Nair decodes the numbers behind in-cinema advertising, and what it means for advertisers and cinema owners
Picture this: Sunday evening, you’re at a multiplex to catch that Bollywood multi-starrer you’ve long waited for. Phone’s muted, pop-corn is in place, the lights dim. Suddenly, you almost jump out of your seat as there appears a Censor Board certificate with the title of ‘Lagaan’ or ‘Rangeela’ which released over a decade ago. The next instant, you see the words ‘Shock laga kya?’ followed by the Havells logo.
Any multiplex regular worth his pop-corn would agree that these films-prior-to-the-actual-films have both improved and increased in the past decade. And though not all of them would manage to induce chuckles among the stands as the above campaign (2010, during the releases of De Dana Dan and Peepli Live) did, truth is that this industry (yes, it deserves to be called one) is growing with eyebrow-raising pace. That said, in-theatre advertising (not to be confused with ‘infilm’) is as old as the Bachchans and Dilip Kumars themselves. From projector ‘slides’ of Lux soap to the perennially running ‘Vicco Turmeric, nahin cosmetic’ jingle (as rare as single screen theatres now), the trend became a norm and is now a medium by itself.
Raking up the numbers
Let’s get down to stats straightaway. Cinema advertising is just 0.5% of the total advertising pie, but this still meant a revenue close to Rs 210 crore in 2012 (according to Magna Global). It is the reach and impact of this medium that’s making us sit up and chart its growth.
S Venkatesh, Sr EVP – Director, Intelligence Practice of Magna Global explains, “Cinema advertising has grown at a CAGR of 11% 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 & Sales, Fun Cinemas, states, “The total advertising pie may sound less, but it’s an important chunk for the 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% of the total multiplex bottomline.”
Entertainment-Entertainment-Entertainment
Needless to mention, we’re talking about the world’s largest film industry in terms of movies churned out every week, and footfalls to theatres are assets waiting to be captured by brands. Siddharth Bhardwaj, CMO & National Sales Head – Corporate at UFO Digital Cinema feels, “Entertainment is the most aspirational space for any advertiser to be in. The 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 of them this year. And how? 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? The other leading cinema advertising medium – Qube Cinema Network (QCN) by Real Image Media Technologies Pvt. Ltd. has anetwork 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, believes 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. Our mission for it - to make it larger – is strong. Of course, cinema cannot replace TV, but can definitely stand alongside it. Research clearly establishes TV plus cinema works better than TV alone,” he says, 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 shows 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?
Other large players in the scene 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, admits, “The footfalls are there but it’s about getting the industry organized 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. Now we know why cinema advertising is never more than 4 to 5% of entire media plans of major brands.
Nandini Dias, COO – Lodestar UM, questions, “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 & 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
That said, 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! Ajay Mehta, MD, Interactive Television, of which Group M holds 60% stake shares, “Three-fourths 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.”
Rakesh Endlaw, Media Head - Dabur adds, “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.”
The good news is that digitization is picking up rapidly. MS Rajagopalan of QCN, who has a network of 1,424 digitized theatres in South India says, “In the North, life begins and ends with multiplexes not only for the audience but also for brands and media planners. In TN, out of 600 theatres, only 50 are multiplexes. Each of the rest have a seating capacity of 600 and with top movies being played, a minimum audience is guaranteed.”
But it’s not like nobody was in the sphere since the analogue days began. The most recalled in-theatre brand is Vicco, and it has been using cinema to effective results since years. “Twenty-five years ago, cinema had a huge demand and TV wasn’t that strong. We started meeting every theatre owner all over India and established a direct contact. We started to advertise in theatres because a majority of theatres were in interiors, where we wanted to reach. The impact is definitely better than TV!” Vicco’s GM PY Palvankar is expectedly the most optimistic sounding person on this subject. And talking of regular advertisers, it must be said that SAB TV has latched on to the digital phenomenon for plugging its family-oriented shows. Anooj Kapoor, Business Head at SAB gives us the reason: “Our channel’s message is that real fun lies in watching TV with the whole family and theatres are the ideal places for us to say so.” Sanjay Tripathy, Executive VP – Head Marketing, Products and Direct Channels at HDFC Life strongly believes that there has been a positive co-relation between cinema advertising and HDFC Life’s brand awareness and consideration, among audiences who have visited the cinema chains.
Talking Regional Hindi movies may be playing a key role in cinema advertising but as per the FICCI-KPMG Indian Media & Entertainment Industry Report 2012, only 17% of Hindi movies were certified while the rest were from regional cinema in 2011. And as per industry estimates, around 29 movies release every week in 30 languages. This presents huge opportunities for brands to tap unexplored markets. oreover, this access will be more as and when digitization speeds up in regional markets.
Tushar Dhingra, who has been responsible for taking BIG Cinema from a 23-screen regional operator to one of the leading brands of India, adds, “With the help of cinema advertising, targeting can be very sharp by selecting the language of the film. You can choose your locality and genre of a movie for an effective communication with your target audience.”
Talking of innovation The biggest and most unique way where cinema advertising scores over other forms is the captive audience factor. Seeking undivided attention in a relaxed atmosphere, it strikes the nail on the head. And with the absence of a remote control, active mind space is guaranteed.
Nirmal Jain, Chairman, IIFL (India Infoline Group) agrees to this, adding, “Cinema advertising has not only increased our brand awareness but has also got us a significant number of sales leads. IIFL got into this genre in 2009, with approximately 5-10% of the overall budget. This spend has only increased year after year since.”
That said, effective communication is possible today in ways beyond on-screen ads too. There have been many successful case studies of off-screen activations having worked wonders for brands. Shekhar Banerjee, Senior VP - Madison feels, “In cinema advertising has moved beyond the screen. At the end of the day, the audience goes for entertainment, so don’t be an intrusion. If your approach can add to the entertainment, that’s more like it!”
Banerjee shared an example about Cadbury Bournville, which made a strategic alliance with the blockbuster The Dark Knight Rises. As part of the integrated campaign, Bournville conducted a special screening for guests and winners of the digital media campaign.
During the special screening in Mumbai and Delhi, the audience was engaged through a unique Bournville experience and an augmented reality game using the motion-sensing technology, which required active participation from the audience. It was designed in a way that made the viewers literally throw up their arms with excitement to collect the Ghanaian Cocoa, to earn their Bournville.
Cinema advertising can be impactful with innovative ideas, but brands still hesitate to associate with digitized cinema halls on a long-term basis. Firstly, nobody can guarantee the fate of a movie at the box office; brand managers putting money blindly on movies with A-list stars can backfire too. For them, small-budget movies do not exist and a movie proving to be a dark horse is rare.
Nandini Dias gives her view: “Nowadays, we prefer tying up with movies than with theatres. You pick up 20-25 movies which you think will do well. For those, around 2-3% is what goes in the entire marketing spend - that’s enough to use the medium sufficiently well.”
But this kind of planning creates room for cost inefficiency, Nadeem Manekiya tells us. Co-founder of Nest Media which provides 360 degree cinema solutions, he judges cinema advertising to have a ‘retail and wholesale’ system. “You will be charged heavily during a big movie release because small movies didn’t generate any ad revenue for us. Brands don’t come on board during small movies even after 90% discount on the rate card.
For cinema, a minimum one month of buying is needed for the brand recall. So if you buy for a month, the calculation will be much cheaper,” he says. And in order to make brands realize this cost-effectiveness, almost all cinema chains now have experienced sales teams dealing directly with advertisers, media planning agencies and concessioners who dedicatedly plan for cinema.
For advertisers, theatres with a strong bouquet of screens work better. PVR’s recent acquisition of Cinemax means a strong network of cinema chains across India for advertisers who would want to make the most of this consolidation. For PVR, cinema advertising contributes 13.5% of the total revenue, making it critical for the market leader. It believes that in two years, they have the ability to reach Rs 100 crore in this bracket.
Gautam Dutta, COO – PVR says, “Over the last seven years, we have had double digit growth because everyone is looking at this medium carefully. We get the most discerning audience, willing to pay extra. For our clients, we do regular researches to know about this customer. How many times do they watch cinema, what kind of cinema do they watch, what pricing works more? All this and more is researched and shared with the clients for them to plan better.”
And talking of innovation, just as the Havells campaign we spoke of earlier, you might recall Frooti’s ‘Digen Verma’ campaign, which saw slides reading ‘Ms Madhuri Dixit, Digen Verma is waiting for you at the cafeteria’, creating a superb buzz. Simple ideas have worked too, and being in the cinema but out of the box is difficult but not impossible.
Looking Ahead
Magna Global forecasts cinema advertising to grow at a CAGR of 22% in the next five years. S Venkatesh says, “Theatrical revenues will continue to dominate the overall pie. Growing urbanization, aggressive multiplex expansion plans (multiplex screens are expected to double in the next five years), increasing digitization of screens are some of the growth drivers for the category.”
Ketan Lakhani, Director of Orienta Cine Advertising Pvt Ltd, backs this: “With an increasing number of films crossing the Rs 100 crore mark, this industry is poised to see a consistent growth in the near future.” Orienta registered an annual turnover of Rs 75 crore in 2011-2012 and is aiming to cross Rs 100 crore this year.
But it is Harshavardhan Gangurde, VP – Marketing of INOX, who offers something that could pave the way for the future. “We can give an assurance that we will charge only for the number of people who have come in, i.e., cost per contact. The occupancy figures will tell you how many people turned up for a show. This technique will be a game-changer. We are in talks with several brands and they’re all excited.” We can see why.
Cinema advertising has a long way to go from being a mere Rs 210 crore industry. Clearly, digitization and audience measurement are major roadblocks which 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.
AKASH CHAWLA, Head of Marketing, National Channels, Zee
“We launched Dance India Dance 3 during the festive season along with one of the major blockbusters of that year, Don 2. Keeping in mind the high footfalls in theatres and markets during this time, we thought we should present something to surprise people and at the same time make them recall their favourite dance show.”
KAPIL SHARMA, VP Marketing, 9X Media
“9XM plays the latest hit Bollywood music, so the audience at cinema halls is a good fit for us to reach out to Bollywood movie lovers. Rather than using traditional on-screen ads, we’ve chosen to opt for the mandatory slides at Cinemax & Plaza Theatre.”
CINEMA IS THE CHOICE!
Ruosh, a footwear brand for men based out of Bangalore, used cinema as an effective medium to target its audience. The brand made commercials only for cinema viewers with lines like ‘Sadly, we make shoes only for men, who probably can’t wait for the movie to start.’ Mohini Binepal, Business Head Retail, Ruosh says, “In the last three months, we have advertised during 10 English movies, 11 Hindi movies and four regional language movies. We advertise in genres ranging from comedy to pot-boilers to action to drama. In fact, we are thinking of tying up with movie theatres at least for six months, if not annually, to get efficiency and better costs. A major percentage of our consumers indicate that they came to know about us through theatre, which gives us the confidence.”
BRANDS THAT SHELL OUT MORE
‘Can’t just run behind Khan movies!’
In the star-obsessed cinema advertising industry, Nadeem Manekiya seems to be only one with a plan. The cofounder of Nest Media plans to form the non-profit ‘C ASIA’ (Cinema Advertising Screen Indian Association) to govern, innovate and benefit all. Here are excerpts from a conversation with Shobhana Nair
Q] What made you feel the requirement of an association such as C-ASIA?
Just the opportunity of helping single screen theatres and single multiplex owners survive through additional advertising revenue. The body aims to seek revenue from 360-degree verticals of theatre inventories. It will monitor their campaign execution; we also plan to rank brands on the basis of their payment release. C-Asia will be not-forprofit, equivalent to AAAI and IBF.
Q] But currently cinema is the last option when it comes to advertising. Media planners don’t sound excited either. Why?
Only choosing your plan wisely will get you maximum reach. As of now, not a single media planning agency is into cinema buying. And they don’t have a cinema team in place as they don’t understand cinema. UFO is the market leader because they know how to use the medium well.
Q] The reason why media planners shy away from cinema advertising is that they think it’s not cost-effective.
On the contrary, cinema can be very cheap if planned well. We try to fit exactly in the budget of the client. In cinema advertising, we have 1,000 mediums. We are actually cinema planners. Media planners should give the brief and budget to us, but they still try to do it and then goof up, saying, ‘We can’t understand it, it’s not worth it.’ A fashion designer can never work like a tailor.
Q] So how can you make cinema a cost-effective medium?
Cinema has to be given to someone who plans and understands it for a longer term. It’s crucial as cinema is a year-round affair. In a year, there are eight to 10 big releases and there are around 100 movies if we classify them into A/B/C classes. Why advertise only during a Salman movie? You can get four movies for the rates you pay for a Salman movie if you plan in advance. You can’t just run behind Khans, that kills the charm of cinema! A brand has to be present for at least six to eight movies a year to have an impact. Don’t plan at the last minute. Cinema is affordable, but last minute planning makes it costly.
Feedback: shobhana.nair@exchange4media.com
