A variety of factors has made it difficult for cinemas to make as much money as they once did, and some even worry for the medium's future. The good news is that while the industry is changing, there are ways for cinemas to remain competitive and continue to generate substantial amounts of revenue. One method that has been around for quite some time is in-theatre advertising. Let's look at how this monetization method can help a cinema increase its profits and grow its business.
What is In-theatre Advertising?
Moviegoers fall into a variety of demographics and constitute a demographic all their own as well. This means that a variety of companies are eager to reach out to these highly targeted demographics with their marketing messages to sell their products and services.
In-theatre advertising is when these companies agree with cinemas and pay them to display ads within their establishment. One example of this would be running ads or trailers before the main movie starts. Another would be advertising for products such as candies and sodas since those are a big part of the cinema experience.
Regardless of what form the advertising takes, it is a lucrative opportunity for sponsors to reach out to their demographics and build their brand. This gives cinemas a fair amount of leverage when it comes to getting well-paying sponsorships. The downside, of course, is that there are so many cinemas around the country and world, meaning that charging more than what would be considered “normal” isn't an option in many cases.
Now that you get how cinema advertising works, let's' take a look at some of the benefits. In addition to bringing in new revenue streams from sponsors, there are other ways to help your business succeed.
No Overhead or Production Costs
With most business models, you have to produce something or provide a service of some sort to generate revenue. This means that there will be overhead and production costs to overcome before you see any profits. In-theatre advertising is a little different.
When you sell advertising space in a theatre, you're not producing anything, and you do not have to go out of your way to provide a service. Instead, it is more comparable to renting a property that you own, only with the added advantage of having no maintenance costs. This means that the revenue you generate through in-theatre advertising is essentially pure profit.
Knowing Your Theatre's Value
As stated before, in most cases, a sponsor will pay an amount already determined by the market, and attempting to charge significantly more won't work. However, there are certain situations in which you may be able to negotiate for a higher price.
Consider this way: If you run a small mom and pops movie theatre on the corner, you're not going to be getting as many customers as if you ran a huge multi-screen duplex cinema located in a busy shopping center or a famous commercial district in a major city. The more people frequent your theatre, the more valuable your ad space is, and the more you can charge for it.
The key here is knowing the value of your ad space. Sponsors will try to pay you as little as possible to run ads, that's the nature of the business, but if you have a good understanding of just how valuable your ad space is, you will have the leverage to charge more. That said, getting in touch with the right people can be tricky, and of course, professionals handle negotiations best.
Seeking Out Sponsorships
Since there are so many theatres in the world, it's easy for you to get overlooked by sponsors sometimes. This means that instead of waiting for sponsors to come to you, you need to reach out to them. Unless you're a big nationally known cinema chain, this is the best way to get sponsors and sell in-theatre advertising.
As you might imagine, the process for reaching out to sponsors, negotiating deals, and determining exactly how the ads will work in your theatre is complex. Fortunately, some services specialize in brokering these kinds of deals, so you don't have to spend valuable time figuring it all out yourself. While there are fees involved, the time and money you save in the long run are well worth it.
Other Advertising Options
In addition to extensive corporate sponsors looking to advertise their next film or their junk food products, there are also smaller sponsorship opportunities that you shouldn't miss at a cinema party hire event. For example, if you run one of the aforementioned mom-and-pop theatres, you can reach out to local businesses and offer them advertising opportunities. This could be having their brochures displayed in the theatre, distributing fliers to guests, or providing guests with coupons and special offers from your sponsors.
The key is to get creative and truly understand just what a massive advertising asset a theatre is. As long as you can do that, you'll be sure to find sponsors willing to pay you for in-theatre advertising opportunities.