Advertisers' confidence returns in cinema advertising; to grow in double-digits in 2024

In terms of advertising mediums, cinema advertising was the biggest casualty of 2020 when Covid-19 hit the world. It de-grew by almost 85%. Before Covid, the cinema adex was more than a thousand crore in 2019.

Having said that, as per India’s leading media agencies, the good days of cinema advertising have returned.  

Even having a share of less than 1% in the overall Indian adex, in terms of growth percentage, cinema is expected to see the highest growth of 15%, leaving digital behind at 13%, to touch Rs 879 crore in 2024, predicted GroupM in its annual TYNY report.

On the other hand, Madison in its latest adex report stated that cinema advertising is projected to grow 35% in 2024.

"Cinema has been recording a good growth rate post-Covid and we expect a 35% growth in 2024, over its small base of Rs 776 crore taking total cinema adex to Rs 1,047 crore. Cinema’s share of total adex has steadily grown from 0.63% in 2022 to 0.78% in 2023 and we expect it to move up to 0.94% in 2024," the Madison report stated. 

Before the pandemic, the medium was growing at around 15-20% year on year.

Experts are anticipating a return to pre-Covid levels in the not-too-distant future.

Anticipated growth of 20% to 25% in spending from loyal brands

 

Vivek Lakhwara, President – LIO, Rapport India, said that the growth trajectory in cinema advertising for 2024 is expected to be robust, building on the successful comeback of Bollywood movies in 2023 after the pandemic's impact. 

“With the release of highly anticipated sequels like Pushpa 2 and Indian 2, demand for cinema plans is on the rise. We anticipate an overall growth of 15%-20% compared to 2023, driven by both increased demand from existing clients and the entry of new brands into the medium,” he added. 

Rahul Puri

Rahul Puri, MD, Mukta A2 Cinemas, said that the expected 15% growth of the cinema segment in 2024, according to GroupM, indicates a substantial surge compared to past years. This growth is likely to outpace the industry's previous year's trends, showcasing the cinema as a robust advertising platform. 

“Brands are understanding how cinemas are the perfect fit to reach the right target audiences through on-screen- off-screen advertising,” he added. 

Lakhwara emphasised that in 2024, brands are not only looking to secure on screen ad space but also exploring innovative opportunities within the cinema environment. 

“Following the record-breaking success of movies in 2023, brands are eager to elevate their advertising strategies. We anticipate a significant growth of approximately 20% to 25% in spending from loyalist clients, with total annual ad revenue expected to surpass the Rs 800 crore mark, fueled further by contributions from new clients,” he added. 

Similarly, Puri said that anticipating big blockbuster releases, brands are expected to significantly increase their spending on cinema advertising in 2024. The magnitude of spending could surpass previous years, driven by the unique and captive audience cinema offers.

Stable ad rates

Lakhwara stated that ad rates for advertising on cinema screens have remained stable since the pandemic, aimed at providing brands with continued value from this medium. The recent merger of PVR and INOX has further contributed to the stability of ad rates. 

“While there have been no immediate rate hikes, slight adjustments may be anticipated later in the year as market dynamics evolve. We remain committed to ensuring that brands derive maximum benefit from cinema advertising while maintaining competitive pricing structures,” he added. 

Meanwhile, Puri said, “Following major releases, advertisers should expect a temporary spike in ad rates due to increased demand for prime advertising slots and also showcasing their brand when we expect a good inflow of content. The exact hike may vary, but a moderate increase in ad rates can be foreseen during these high-demand periods.”

According to Puri, given the significant events in 2024, such as the general elections, IPL and the World Cup, innovative strategies in cinema advertising may include: Aligning advertisements with the themes of major events or blockbuster releases and utilising interactive formats or AR/VR experiences to engage and captivate audiences.

“In summary, the expected uptick in cinema advertising in 2024 presents a unique opportunity for brands to explore innovative strategies, increase spending and capitalise on the shifting dynamics of consumer behaviour in the cinematic environment. Advertisers should remain agile and embrace trends like data-driven personalisation to maximise the impact of their cinema campaigns,” he added. 

Meanwhile, UFO Moviez, an in-cinema advertising platform, reported that in Q3FY24, its overall business saw an improvement on the back of improved Advertising and Theatrical Revenue.

Its consolidated ad revenue was up by 22.7% and stood at Rs 14.29 crore for the quarter ending December 31, 2023. The consolidated ad revenue was Rs 11.64 crore in the corresponding quarter of the previous year.

Slow recovery; Cinema adex yet to touch pre-Covid levels

According to the Madison report, post-Covid, it was expected that cinema adex would bounce back remarkably. However, despite blockbuster movies getting released almost every month in 2023 and many movies like Pathaan, Gadar 2, Jawaan etc. doing a box office collection of more than Rs 500 crore, cinema advertising in India grew by only 36% on a very low base as against projected growth of 75% to reach close to Rs 800 crores. 

This figure is still short of the pre-Covid level by almost Rs 300 crores. Cinema advertising continues to contribute less than 1% of the total Indian Adex, the report stated.

According to the report, cinema adex is yet to recover to pre-Covid level of Rs 1,045 crore in 2019.

Striking a similar tone, theatre owners stated that challenges still persist for advertising in cinemas and the total revenues remain 10% to 15% lower than pre-pandemic levels.

Is the cinema industry truly triumphing over challenges posed by OTT platforms?

As per the Madison report, OTT has proved to be the most significant cause for the decline in cinema advertising, with the wide availability of high-quality content which can be viewed at the individual’s convenience and in the comfort of one’s own home.

However, a theatre owner said, "We have observed a significant increase in in-cinema advertising lately, overcoming obstacles presented by the rise of OTT. The diverse movie offerings remain attractive to audiences."

“Also, cinema advertising has improved not just because of the festive period, but also due to factors like better content and increased movie theatre attendance. Advertisers who were previously hesitant or selective in their cinema campaigns began to engage more consistently and sign longer-term deals. This led to an increase in the number of brands advertising and generated higher revenue,” he added. 

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