The power of programmatic now showing at a movie theater near you

The movie adaptation of the Broadway smash hit Wicked soared to heights few other musicals have, earning its spot as the fourth-biggest opening weekend for a musical ever. Audiences sang along to the big numbers. Meanwhile, Gladiator II also had a strong debut in the U.S., with moviegoers cheering on the action.

These box office draws show packed movie theaters are making a comeback thanks to a welcome dose of nostalgia this holiday season. The communal experience of dimming lights, wafting popcorn smells, and pre-show ads is as old as the movie industry itself. The best part? There are still no phones in sight.

But even the oldest traditions are finding ways to reinvent themselves, as in-cinema marketers lean into new tech to advertise in front of this highly engaged audience. It’s not that showing ads is a new phenomenon, but rather that marketers are now using data-driven strategies to optimize their campaigns for cinemagoers.

Case in point is the Harkins Theaters in Cerritos, CA, where the brain of the operation is a bank of servers. Three by three feet in size, the servers control the playback of all the movies, trailers and pre-show ads in each theater. It’s another sign that this isn’t the movie theater of old. National CineMedia (NCM) and Screenvision Media — the two largest in-cinema advertising firms in the U.S. — have introduced programmatic buying to their networks of theaters and advertisers through these servers and are rapidly expanding with it.

Movie theaters offer the most-premium way to advertise because viewers are most leaned in after the lights go down, according to Jeremy Morgante, SVP of data and programmatic at Screenvision Media.

In fact, Screenvision, Amplified Intelligence and MAGNA Media Trials found that ads delivered during the pre-show captured just under three times the attention of streaming or other digital video 30-second spots — with 84% attention compared to 30% on average. That 84% number is by far the highest attention rating of any channel that was tracked. The studies also found in-cinema ads had a staggering 88% average recall among viewers.

“We have foreseen the golden goose of programmatic in-cinema ads,” Alyssa Lee, Roborock’s brand manager in NAMER, tells The Current. The cleaning-device company recently ran ads before trailers in California theaters. “The unique value of big screens in theaters has been proven [to] grab audience attention without phones in sight, where our branding creativity can be fully presented to consumers.”

NCM found similar results in studies of its own by tracking moviegoers’ eye movements and facial expressions. It declared cinema the No. 1 channel for attention, beating all other video channels.

With 70% of NCM’s and Screenvision’s core audiences being Gen Zers and millennials, the big screen also represents an opportunity to grab the attention of these elusive and highly valued groups.

How programmatic comes alive at the theater

Serving over 385 million moviegoers every year, Screenvision Media represents 45% of all movie theater impressions in the U.S. Morgante sees programmatic as key to capturing that monetization opportunity.

The data insights are the core driver in this strategy, which is why Morgante says linking programmatic to its first-party data center is “the future of how we should do our entire business.” Using QR codes, gamification, coupons and tracking pixels in ads to gain email addresses, both Screenvision and NCM are leveraging that first-party data to connect with people outside their theater seats as well.

“A simple way to think about it would be if you’re about to sit in front of eight trailers,” Morgante says. “What if you just got that delivered to your inbox after you left? So, as you’re home thinking, ‘Wait, what was that trailer that I really liked?’ You can go back and reference it. And then maybe sign up for an alert when it is released in theaters. So now we create more engagement for the entire industry.”

Cinema programmatic isn’t 100% akin to programmatic buying within a channel like streaming because advertisers are targeting a group of people at the same time instead of segments within an audience. In this way, it’s closer to a digital out-of-home ad with premium video.

So how does it all work?

Advertisers can use contextual, location and transaction data from theaters to more accurately target a movie theater’s audience. There’s now real-time optionality to the pre-show process, meaning a brand can buy by title, genre, time of day or contextually at a moment’s notice if they find alignment with the audience attending.

During any given pre-show, ads from some of the biggest brands in the world — Nike, Hyundai, Expedia, Allstate, Chevy, Ram, Amazon — can appear on-screen, activated with a mixture of private marketplace and programmatic guaranteed deals.

Morgante says he expects all the ad slots to be decisioned and open for programmatic bidding within five years. He says it all comes down to change management. The biggest hurdle is convincing all the parties involved — from theaters to advertisers to agencies — that this is the path forward.

“It’s the hardest thing,” Morgante says. “You can have the golden goose and getting people to get out of their habits is the hardest part.”