Programmatic Ads: Coming Soon To A Theater Near You

Next up: movie theaters.

Programmatic ad buying is picking up traction in connected TV land.

Author: Alyssa Boyle Source: Ad Exchanger

On Monday, in-cinema advertising company National CineMedia (NCM) announced plans to sell movie screen inventory programmatically beginning in Q4.

The promise of programmatic is to reach people on a one-to-one basis, which makes using it for cinema inventory a bit of an eyebrow raise. In-theater ads reach dozens, if not hundreds, of people at once.

But marrying the efficiency of programmatic buying with data-driven targeting can turn cinema screens – which are designed to capture attention – into a performance channel that could attract digital ad budgets, said NCM CRO Mike Rosen.

And NCM could do with more digital ad dollars. In April, the company filed for Chapter 11 bankruptcy due to pandemic-related losses.

NCM hopes that offering advertisers automated buying for its inventory will be a “great growth strategy,” Rosen said.

Attention, please

A big part of NCM’s pitch to buyers is that they’ll be able to get attention from a captive, lean-back audience.

Unlike when watching TV at home, movie audiences are less likely to be distracted by a smaller second screen while ads are playing on the big one. According to a recent study from advertising research company Lumen, which uses eye-tracking technology, 97% of moviegoers have their eyes on the big screen while the ads are playing, compared with only about 35% of TV viewers.

Running ads in theaters can also be a way to engage attentive audiences that mostly or exclusively watch ad-free streaming and can’t be reached on AVOD or linear channels, Rosen said. 

NCM works with 1,500 theaters in the US, reaching just under 20,000 movie screens.

Show me the money

NCM is categorizing its inventory as “premium video” more broadly, Rosen said, because movies don’t neatly fit the CTV or out-of-home label.

It will sell its ad units, which run on movie screens before the previews, through programmatic guaranteed and private marketplace deals as well as on the open exchange, including through Place Exchange.

A select group of agency holding companies and advertisers, which NCM declined to name, are beta testing the capability, to be followed by a public rollout in 2024.

The goal is to offer the same targeting capabilities programmatically as it already does directly, meaning that advertisers will be able to choose theaters based on region, city or ZIP code, including individual locations They’ll also be able to buy (or exclude) inventory based on genre and movie title.

Lights, camera, data

But where there’s programmatic, there’s also audience targeting and retargeting.

NCM already has its own data and analytics platform, NCMx, which it rolled out during the 2022 upfront season.

NCMx has first-party data from customers through online ticket sales and theater-specific loyalty memberships on mobile apps, including opted-in and anonymized geolocation data and mobile device IDs.

NCM then works with third-party data providers to tie ad exposures to in-store foot traffic and sales. Partners include Affinity Solutions, which has purchase and transaction data, in addition to Catalina and Kochava.

Advertisers can optimize in-theater campaigns based on attributed results and complement NCM buys with online retargeting.

NCM has partner integrations with a handful of online publishers, including YouTube and Yahoo, that allow it to package inventory for retargeting specific segments of moviegoers based on their interests. For example, if NCM finds a positive association between, say, Marvel fans and fast-food purchases, a QSR brand could choose to serve an ad online to people who have watched Marvel films in the theater.

Showtime

NCM can sell inventory up until roughly an hour before a movie starts.

But the goal, Rosen said, is “not about just trying to sell remnant, unsold inventory” at the last minute. NCM has its eye on bringing in new advertisers that may not be buying cinema inventory by making it easier to access.

So, are advertisers buying in?

Although NCM isn’t disclosing the names of its early adopters, Rosen said that “the marketplace reaction was very positive” following initial tests earlier this year of programmatic integrations with screens in movie theater lobbies.

“The advertising market is hungry for more high-quality, premium video impressions in programmatic [bid streams],” Rosen said.

(And buttered popcorn, too, of course.)