Movie theater screens are the latest to get a digital makeover

Movie theaters have long been stuck in the past when it comes to ads, preferring analog film dominated by movie trailers. That's changing though, as programmatic advertising has premiered at the box office.

The two biggest in-cinema advertising firms in the U.S., Screenvision and National CineMedia (NCM), have both brought programmatic ad buying to the big screen in recent years. Screenvision launched an addressable offering starting with 2,400 screens in late 2020, and NCM debuted its own platform in 2022 with around 20,000 screens.

The pandemic timing is no coincidence: The move is helping theaters drive revenue as the industry tries to rebound from years of waning ticket sales. And it’s bringing the audience experience as well as brand opportunities into the present day.

For years, marketers have struggled to target crowds with diverse interests with mass ads, so the new ability to target and measure relevant consumers in theaters plays a big role in this innovation. Vistar Media, the programmatic digital out-of-home (DOOH) platform that partnered with Screenvision to bring programmatic to the theaters, says it marries location data with audience segments to recommend when advertisers should include cinemas in their media plans.

“In-cinema programmatic availability wasn't heavily promoted because of the pandemic,” Vistar Media’s senior VP of marketing, Leslie Lee, tells The Current. “It wasn't really the time to be out shouting, ‘Hey, we can advertise in movie theaters.’ The awareness of that capability was slow to make its way into the broader advertising planners.”

Now, with more moviegoers returning to theaters, as evidenced by Avatar: The Way of Water and The Super Mario Bros. Movie both crossing $1 billion globally at the box office in the last six months, many advertisers may be keen to follow those audiences.

But ticket sales are still below pre-pandemic levels, and it’s unclear when the industry will fully bounce back to that heyday. The North American box office crossed $11 billion in both 2018 and 2019. Last year, it topped out at $7.5 billion, and analysts expect this year to hover around $9 billion. 

Ad revenue may not close that gap, but “any dollars coming into movie theaters should be welcome,” says Paul Dergarabedian, Comscore’s senior media analyst.

“It’s great for advertisers because they’re getting in front of a receptive demographic,” he tells The Current, adding that consumers are incentivized to fast forward or look away from ads at home.

In fact, a first-of-its-kind study from NCM and attention measurement firm Lumen recently found that attention scores for ads that run before movies beat all other video channels by four to seven times. The research also showed 97 percent of moviegoers watched the ads, and 74 percent of those prompted brand recall.

“It's new to people to realize that actually [DOOH offers] the biggest, most premium screens in the world,” says Lee, who views bringing programmatic into theaters like any other DOOH ad, be it in Times Square or Piccadilly Circus. “That's where that concept is starting to click for advertisers and they're thinking about it like, ‘Oh this doesn't have to just be a niche kind of efficiency play,’ it could be used for these bigger, splashier premium advertising campaigns.”

Programmatic isn’t just invading the big screen though — it’s becoming woven through the whole theater environment, from the screens in the lobby to the hallway ads. Vistar itself offers around 20,000 screens across the U.S. within theaters.

Another key to this puzzle is the immense amount of first-party data that in-cinema ad networks can offer advertisers. NCM and Screenvision both launched data platforms in 2022 to allow advertisers to match their own data against both firms, which say they each have around 250 million data sets of geographic, behavioral, and contextual information. In one example from a CPG brand, Screenvision says that “for every dollar spent with Screenvision, the client earned 14 times higher than the average (return on ad spend) received through linear and addressable TV."

As a whole, programmatic DOOH is exploding. In 2019, Insider Intelligence reported $86.5 million was poured into the channel, 3.2 percent of total DOOH spend. This year, the number is projected to skyrocket to $659 million, and in 2025 it’s expected to jump to a staggering $1.11 billion, 31 percent of total DOOH spend.

As the channel matures, it makes sense that programmatic advertising within theaters could increase as well. So get your popcorn ready, because this may just be a preview of what’s to come.

Travis Clark contributed to this story.