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Theater Advertising Giant Looks for Revenue Outside of Big Cinema Screens

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With many U.S. theaters shuttered or operating with reduced attendance, advertising on movie screens has been sharply curtailed. So the largest domestic cinema advertising network is searching for revenue outside of theaters.

On Dec. 10, National CineMedia hired former Screenvision exec Steve Sapp to drive out-of-home digital ad sales well beyond the multiplex during the pandemic. The move is aimed to help the theater ad firm get its prescreening ad inventory into restaurants and retail outlets as movie fans go to shopping malls and outdoor venues.

National CineMedia has taken a huge financial hit. Overall revenue for the three months ending Sept. 24 fell 94.6 percent to $6 million, compared with $110.5 million for the same period last year.

The strategy is getting brand marketing messages that usually play in movie theaters closer to on-the-go consumers in retail settings with place-based digital screens.

Sapp’s New York-based team will expand movie-centric entertainment content, trivia and ads beyond theaters to complementary venues and will sell ads on the firm’s Noovie web platform and app.

“Digital has actually been a real bright spot for National CineMedia while some theaters in our network have remained temporarily closed due to the pandemic,” Scott Felenstein, NCM executive vp and chief revenue officer, says, adding: “Our sales team has been able to successfully shift some onscreen commitments to our digital platforms and bring in new revenue to continue to reach movie fans at home online and on mobile devices.”

That shift has been prompted by out-of-home and cinema advertising having been especially hard hit by public health restrictions on movie theater capacity and pandemic-era lockdowns, and consumers staying away from public places like the multiplex to avoid COVID-19 infections.

Advertising firm Zenith forecasts out-of-home advertising will shrink by 25 percent in 2020 and in-cinema advertising by 51 percent at the end of a turbulent year for exhibitors. Rival Magna, while predicting cinema advertising will fall by a larger 80 percent in 2020, predicts a sharp rebound to 123.1 percent in advertising growth for cinemas in 2021 as the promise of a vaccine and a return to the local multiplex plays out.

Until then, NCM is placing ads on its digital properties like the Noovie web platform, the Noovie trivia app and the Noovie Arcade gaming app.

"These partnerships will allow us to further expand the reach of our Noovie Trivia and other movie-centric content to continue to engage movie audiences when they’re not in our theaters, while also giving brands additional touch points to further interact with movie fans in the community," Felenstein added.

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