Digitization, aggregation of screens through multiplex chains and digital cinema players make advertising in cinema halls a great fit in a brand’s ATL mix; geo-tagging the audience is the biggest benefit
By Dipali Banka
“Kattappa ne Bahubali ko kyun mara?” probably that’s the question which will lead most of us to the cinema halls when Bahubali II releases this month-end. Brands are eager to be part of the answer and hence there has been a massive rise in in-cinema advertisements for this mega blockbuster movie. With more than 40 million hits on the promo trailer, Bahubali II has all initial signs of a mega blockbuster. Cinema chains are making as much business as they would during a Diwali or a Christmas season. The cost for a video ad ranges from Rs 3,000 per week in Tier II multiplexes to Rs 15,000 per week in metros with most of their inventory already sold. According to industry sources, at least 200 brands (small and large) are likely to have cinema campaigns during this mega blockbuster release.
Once a poor brand’s media vehicle running on slides to an evolved audio visual form which can be a great fit in a brand’s ATL mix, in-cinema advertising has come a long way. But does it make sense for brands to use in-cinema advertisement only during big ticket releases? What have been the structural changes in this medium over the last couple of years and what are the issues that still keep this medium away from the overall media plan?
A GEO-TAGGING FORMAT FOR ATL MEDIUM
Along with a captive audience with an open frame of mind, today in-cinema advertising also offers a brand the option to block a particular movie or take the genre of the movie and be relevant to that particular audience. Moreover, in-cinema advertising can today tell you exactly which store, which mall or which theatre you want to advertise in and that is the closest one can get from an Above the Line (ATL) advertising perspective, says Jiten Mahendra, Vice President, Marketing, Max Fashion India. “In-cinema advertising along with Digital and Radio, is a classic combination for targeting youth. Radio gives you the call to action, in-cinema gives you the thematic feel of it and Digital (Facebook and YouTube) is the new age medium. These three together give you far better reach than a Print and Radio put together. And all of them are very cost-effective,” says Mahendra, while explaining ad spends of Rs 12 crore on in-cinema advertising in the year 2016-17.
ADVERTISING DURING BLOCKBUSTER RELEASES
Does it make sense for brands to advertise during blockbuster releases? “Depending on the categorization of the movie, brands would want to be present in theatres where the film is playing. So, it is the movie that takes the lead. Normally, blockbuster movies have immense traction with the clients. And it stands to reason that such movies get screened in the best of cinema chains,” says Sanjeev Goyle, CEO, Rural & OOH, IPG Mediabrands India.
Cinema halls are paying a huge royalty fee to screen Bahubali II. To recover this money and also ride the popularity of Bahubali among advertisers, cinema chains are prepared to charge a premium from advertisers in order to place ads during Bahubali II screenings. “The average occupancy of theatres doesn’t change much over a period. They make more money by charging higher ticket prices rather than increasing the number of seats. So cost per reach for your cinema campaign might go up if you choose to advertise only during the screening of Bahubali II. Also, there will be a huge ad clutter, especially during the first two weeks of release,” says Samir Chaudhary, Co-founder of The Media Ant, which provides detailed information on advertising touch-points.
However, Anand Vishal, VP Sales, INOX Leisure Limited, thinks the cost to reach out to an audience during a blockbuster film is cheaper than advertising during a regular film. “In the last couple of years, the advertising rates have increased at the rate of 12-15% YOY. Also putting things in perspective, the blockbuster movie rates are designed differently from a regular film. This is because the blockbuster films cater to a larger audience base and the cost to reach out to an audience during a blockbuster film is cheaper. By and large, we consume approximately 12-13 minutes of inventory per show and that’s designed in such a way that the consumer gets the best cinematic experience between the feature film and the commercial ads played on the big screen.”
“It’s true that the nature of the medium is skewed towards big ticket launches; hence, the rate card is primarily based on standard, blockbuster and mega releases. However, considering the success of sleeper hits - movies that surpassed expectations critically and commercially - brands are quite wary of this fact, hence they wouldn’t like to lose out on the viewership due to a sudden spurt in audience admissions,” says Gautam Dutta, CEO of PVR Cinemas.
As television channels become fragmented, in-cinema advertising is becoming more effective for brands. The fashion brand Manyavar has been a great example. A pioneer in the ethnic wear segment, the market-share of Manyavar has been growing by 20-25% annually and in-cinema advertising has been a major focus for the brand in its growth journey.
“Today, our long term deals contribute more than 40% of the overall advertising revenue and 60% is targeted for retail activity attracting small to big films,” states INOX’s Vishal.
‘The big challenge is to build bridges with all stakeholders and make them appreciate the value of data’
Having a unified currency for box office measurement has been a challenge for the industry. Media research company Rentrak made its second attempt to enter India in the second half of 2014, but hit a roadblock in collected box-office data as two of the biggest local cinema chains - PVR and INOX - did not sign up. The research company also entered into an alliance with WPP’s cinema advertising unit Interactive Television (ITV), to try to overcome the roadblock. On February 1, 2016, comScore announced the completion of its merger with Rentrak to create a new cross-platform measurement company. Giving a big boost to the company and the industry measurement as a whole, PVR came on board of comScore in January 2017. IMPACT talks to Rajkumar Akella, Managing Director - India (Theatrical), comScore to find out the issues related to box-office measurement in India and how they are being addressed.
Q] ComScore collaborated with Rentrak last year for film box office measurement. How has the ride been so far?
India is the most challenging market for us because it’s so diverse and has a large number of single screens. Also, traditionally the market has been very opaque in terms of data. So, the big challenge has been to build bridges with all stakeholders and make them really appreciate the value that we could bring in with the data and transparency. Most recently, we got PVR on board. And that’s been a tipping point for us to move forward, because that’s a huge endorsement for the transparency we could bring into this market.
Q] Are cinema chains open to go for a unified measurement system, which did not exist in the country earlier? What are the apprehensions that you have come across?
There is one notion that accuracy will only help the distributor and there is nothing in it for the cinema chains. In fact, it’s the cinema chains that benefit substantially through this kind of data. India as a country is passionate about cinema – but if you look at on-screen advertising, it is very dismal and highly under-monetized. One of the biggest reasons for that is there is no currency for brands and advertisers to determine what is the ROI for cinema advertising. In international markets, comScore is the currency for cinema advertisers.
Also, in India, there is a lot of ambiguity in terms of box office numbers available. There are multiple sources, multiple trade publications which report numbers differently. For example, globally you always talk in terms of gross box office numbers. It’s about what is the aggregate of all the tickets sold. But in Bollywood, we talk in terms of net box office. And down South, we talk in terms of distributor share, which is arrived at after you take out the theatrical rentals/shares. So far, we have been comparing apples to oranges. We need some standardization of box office reporting and once that happens, there will be better understanding of this market.
Q] How does this model work? How do you collect the data?
We collect data in an automated manner directly from the cinemas without any intermediaries. We use a software patch on the POS (Point of Sale/e- ticketing) - software that cinema is using. With this, we get the data, everyday, at the end of every hour in real time. A few years back, there were connectivity concerns, but now the market is ready with good connectivity. Also, these POS solutions were a little expensive for independent cinemas. Today, these solutions help cinemas equip themselves with e-ticketing at a fraction of the cost.
Q] How many multiplex chains and independent cinemas have come on board for this measurement system so far?
Of the top four chains in India, PVR, Cinepolis and Carnival have come on board. We are constantly engaging with INOX to bring it on board. Twenty smaller chains - like SRS, Wave, City Pride, e-Square, Asian Cinemas, Miraj Cinemas, Movietime - have also tied up with Rentrak. Once we actually complete the multiplexes, we want to look into the next phase which is engaging with independent cinemas and single screens. Our goal and commitment to the Indian market is to get 100% penetration.
Q] How do the finances work here? Who has to pay for this measurement system?
We don’t charge anything from the cinema. We collect and compile the data primarily at the behest of distributors, and charge them based on per-screen tracked basis, which is the model globally. Cinemas get the additional benefit of rich insights about programming and movie consumption patterns across geographies with which they can boost their opportunities in cinema advertising.
Q] How are media agencies and brands accepting this data? Today, unavailability of a uniform matrix is keeping them away from cinema advertising…
We have spoken with many media agencies and there is unanimity about the necessity of a central agency like ours. They definitely want data to basically optimize the potential that is there for screen advertising.
Q] Clients require footfalls or information about categories of consumers who would view a movie. How does the current measurement system address these issues?
Yes, it is possible, but like I said, we want to go in a phased manner. If the industry is actually moving at a certain pace, we can incrementally add to that momentum, but cannot suddenly bring a lot of pace which the industry may not be ready for. Technologically, all data points that the advertising and media industry or the movie industry wants, are possible through comScore. But we have to be in sync with the industry’s pace, and try to gradually increase the momentum.
DIGITAL CINEMA CHANGES INDUSTRY DYNAMICS
Digitization of screens has brought about a revolutionary change in the way in-cinema advertising is being sold in India. The biggest structural change has been the aggregation of screens, either through the growth of the multiplex chains or digital cinema players such as the Qube Network and UFO Moviez. This has enabled investment in sales infrastructure and manpower. Digital cinema is now fast transforming the positioning of cinema as a media touch-point by establishing credibility and traction in the advertiser’s and media planner’s minds and budgets.
“In India CPTs (cost per thousand) of cinema advertising are much lower than Television when compared with other countries. For example in the US, the CPT of cinema advertising is almost three times that of Television. This makes the platform a cost-effective medium to engage with the audience and generate a greater brand recall,” says Girish Menon, Director and Head, Media & Entertainment at KPMG India.
“We are observing a growing acceptance of in-cinema advertisement as a media platform. In-cinema advertising has been growing at a robust rate of ~25% over the past few years and is expected to grow at a similar pace for the next few years. The number of advertisers has grown from around 50-100 in 2010 to more than 2,500 in 2016,” adds Menon.
“India has approximately 9,000 screens that deliver close to 3.3 billion tickets, out of which 2,000 are multiplex screens which would roughly deliver around 30 crore tickets. The balance 3 billion tickets come from 7,000 single screens. This is where digital technology companies come into play,” says Siddharth Bhardwaj, Chief Marketing Officer & Head of Enterprise Sales, UFO Moviez which has a network of 3,700 screens across the country including around 750 multiplex screens.
Digital technology companies replace analogue projectors with digital ones, setting up different arrangements with the cinema owners. In many cases, they are co-owned, in some cases the cinema owners allow rentals to the digital supplier and to subsidize this rent, they offer ad inventory to these technology companies. The revenue generated from this inventory is shared with the theatre owners, the ratio is again based on the agreed arrangements.
“There are some States where the monthly reach of cinema is at par or more than the top-tier TV channels. We are now in the midst of a move towards the segmentation of audiences, and to that end, are setting up a sub-network within our 4,000 screens of the top 400 multiplex and premium screens called the Qube Premiere Network, which will be offering a more premium offering to clients,” says Harsh Rohatgi – President of Digital Cinema for Qube Cinema Technologies Pvt Ltd.
“Each brand is in a different stage of advertising, of maturity when it comes to using cinema as an advertising medium. But what we have typically seen is brands first come and test cinema by choosing to be part of a big movie because that’s when ROIs are at the maximum. And then, once they slowly gain confidence, they choose more of such movies and expand to different geographies. But the leap of faith is largely taken by the brands themselves and not by agencies,” says Bhardwaj.
WHY DO PLANNERS SHY AWAY FROM IN-CINEMA ADVERTISING?
If we look at the cinema advertising pie in 2016, it was 1% or Rs 523 crore, out of the total advertising spends of Rs 49,490 crore, according to the Pitch Madison Advertising Report 2017. It is a miniscule part of the entire media plan. Most of the brands categorize cinema advertising as an outdoor or a tactical medium and the mandate is largely left to the brand manager or the local territory manager.
Also, planners find it difficult to sell this medium to a brand as the KRA (Key Result Areas) of a planner is based on CPRP (Cost Per Rating Point) and TVR (Television Viewer Rating). Now, the grey area in this medium is a proper measurement matrix. Monitoring is not institutionalized, the way a BARC or a TAM works for Television. That makes it difficult for a brand which is purely driven by processes and not by customers. “Digitization of cinema and multiplexes has helped it grow. Despite it being more organized than in the past, it is still treated as an unorganized medium,” says Neelkamal Sharma, COO Buying, Madison Media Group.
Clients require footfalls or categories of consumer who would view a movie. The current measurement system doesn’t give out segmentation. Data on reach is scarce, leaving planners to go with their gut feel. “Monitoring is quite a challenge in in-cinema advertising, as it doesn’t fall under the purview of broadcasting/ audience monitoring tools like in Television. So, measurement and analysis of impact is usually tenuous,” says Jitin Paul, Chief Marketing Officer of Bharti AXA Life Insurance.
MEASUREMENT SYSTEM AT A NASCENT STAGE
Some media agencies have developed their own tools to measure footfalls. The FICCI-KPMG report 2017 gives the example of ‘Buzz Index’, a measuring tool launched by Interactive Television, a marketing agency specializing in in-cinema advertising. The tool identifies, captures and quantifies the buzz around a particular film across all social media platforms and arrives at a ‘buzz score’.
Cinema exhibition companies also offer a professional approach while selling this medium with data on footfalls, comparative analysis with other media, assured proof of play, pay per eyeball and customized solutions in relation to the brand’s messaging. “Multiplex chains provide a proof of play and a proof of footfalls to the advertiser, which gives them a fair bit of idea of how many people have viewed their advertisements,” says Devang Sampat, Director – Strategic Initiatives, Cinépolis India.
Rentrak (now comScore), the measurement system which provides real-time box office ticket sales intelligence worldwide, has entered India and is spreading awareness amongst the industry around the benefits of adopting a single measurement system. In 2015, Carnival & Cinepolis joined as partners and in January 2017, PVR Cinemas also came on board. This signifies increasing acceptance of a single third-party measurement system by the industry in India.
“This (comScore) is a welcome move and in the right direction. It will bring in measurability to the fledgling medium. However, the interesting part would be to look at how much does it costs. With Cinema spends still a small fraction of overall spends, expecting advertisers to pay a lot for measurement might be a dampener. In my view, the cost should be borne by both the advertiser and the cinema chains,” says Chaudhary of The Media Ant.
“The biggest issue with in-cinema advertising is that there is no mechanism of monitoring it and hence it works on trust primarily. Occupancy is another challenge which is based on performance of movies, show timing and weekday/weekend show,” says Shantiswarup Panda, Chief Marketing Officer (CMO) – Lifestyle Business, Raymond Limited.
SOUTH IS THE HUB FOR CINEMA, BUT HSM GETS MOST ADVERTISERS
Another interesting observation of in-cinema advertisements is that there is a disparity in cinema viewing habits and advertisement revenues that come in from different geographies in India. Almost 60% of screens in India are in the four States in the southern region. Also, 50-60% of movies made in India are from these four States. But the fact that most advertisers don’t understand their content, and language, make it fairly difficult to monetize in terms of on-screen advertisements. Brands take advantage of the content which they are familiar with, and that is why advertisements are skewed towards Hindi-Speaking Markets (HSM). “Advertisers are largely based out of the three main metros of Delhi, Mumbai and Bengaluru and the trend is likely to continue,” says Vishal of INOX.
Also, the advertiser base has shifted from Government to local and corporate clients, with the latter contributing nearly 55% of the portfolio. Sectors majorly engaging in in-cinema advertising include FMCG, banking, e-commerce, hosiery, automobile, local real estate and local retail.
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