National Cinemedia Stock Surges: CEO Upbeat On ‘Platinum’ Post-Showtime Ads
National CineMedia stock surged 15% Friday on a strong fourth quarter numbers and an upbeat outlook for cinema advertising, including its new “lights out” and platinum spots.
The stock was way outpacing a down market after the company reported Thursday net profit and sales – up, respectively 17% and 7% – that beat expectations and cited strong interest by brands in new inventory. As of December, the company began selling five minutes of “lights-down” advertising just after movies’ official start of show times, right before trailers when lights are dimmed. A new prized “platinum” spot comes deeply embedded in the movie trailers.
National CineMedia CEO Thomas Lesinki said during a conference call that it sold platinum inventory in December to a leading technology company, an automobile manufacturer and a major retailer, with CPMs more than 50% above the national pre-show average. The company’s traditional ad package runs before the advertised movie showtime.
Regal And Cinemark To Run Ads Closer To Feature Films Under National CineMedia Pact – Update
When the new ads were announced, giant chain AMC Entertainment protested, saying it didn’t want to alienate moviegoers and wouldn’t participate. Other major partners in the network like Cinemark and Regal did. At a post-earnings conference call Friday morning, Cinemark COO Sean Gamble, asked about customer response to having trailers interrupted, said it has “generally not been a problem. There have been a few comments, but in the scheme of are they significant in terms of numbers, the answer is no.”
He said the chain did a bit of tweaking. “One of the things that we tried to do to try to mitigate that as well is we took one less trailer pack that we were doing post-show and we moved it pre-show, so that we tried not to add too many minutes to to post show time period.”
Lesinski anticipates increased demand for theater ads this summer and fall as the Olympics and elections fill up inventory on other platforms. He also said the group experienced the lowest advertiser churn in five years, “indicating that marketers appreciate our brand building capabilities and our ability to cut through the clutter of digital and TV platforms.”
Advertisers are increasingly bundling onscreen adverting with other media buys in integrated digital campaigns. He said integrated campaigns “resulted in 133% higher contract value versus onscreen-only contracts and are helping to grow our average CPMs along with driving higher inventory utilization.” A key to growth going forward, he said, is NationCinemedia following the industry’s widespread use of consumer data to better target ads.
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