The much-awaited 3D animated film Toy Story 3 has just been released and it is predicted to be a summer hit with adults and children alike. For cinema operators it means their core market – 10- to 24-year olds – will be out in force and advertisers targeting this group during the trailers will have a captive audience.
Despite the recession, cinema-going is a habit people have not given up, and the sector has fared well compared to other leisure activities. Consumers splashed out 21% more on cinema visits in 2009 than they did in 2005, outstripping the increase in spending on theme parks, museums or public leisure centres.
But cinemas need to think about targeting beyond their core audience, according to a Mintel report shown exclusively to Marketing Week. The research agency has identified three target groups for cinemas and advertisers: savvy screenies, who make up 32% of the audience, perfectionists, who make up 20% and ambivalents, who account for 48%.
The ambivalents make up the largest group of cinema-goers, according to the research, with more than 16 million people identified as being in this group. They tend to be aged 45 and over, are retired or in the less affluent groups, with no children at home. This group offers the most potential for the cinema trade, because they respond most to using the cinema as an alternative entertainment venue, and look for comfort when watching films.
Savvy screenies tend to be aged 16 to 24 and are likely to be students and single people who are looking for a good deal. Mintel suggests promoting a cinema ticket plus food or drink offers to this group. Loyalty schemes, on the other hand, will appeal more to perfectionists, according to the research. These consumers are likely to be from a professional background and have children under the age of nine. More than 70% of this group say they would like to go to the cinema more often. Perfectionists are also more likely to book in advance online, says Mintel senior leisure analyst Matt King. “We advise that packaging items up and selling them in advance online is ideal for this group,” he says.
If cinemas are to maintain their growth they will have to become better at appealing to these different groups, according to the study. There are several factors putting future growth at risk, including a slowdown in building new cinemas, concerns among consumers that ticket prices are becoming too expensive, and the fact that cinema ad spend has levelled out at £205m in 2008 and 2009.
In addition, there are forecast declines in the proportion of 10- to 24-year-olds in the population – currently the core cinema audience. At the other end of the spectrum, the number of retired people in the UK is expected to increase by 21% to 11.6 million in 2015.
King says the industry is already reacting to this by promoting cinemas as a general entertainment venue, screening the opera performed at Glyndebourne and live National Theatre productions, among others.
“Innovations like these tend to be skewed towards older consumers and to the ABC1 or AB demographics in particular. These are the most valuable demographics for advertisers to target,” he says.
This valuable audience may also be willing to spend on food and drink. “Focusing on an audience from the upper end of the market isn’t necessarily a bad thing, so long as volumes don’t suffer,” says King.
There has been an explosion of 3D releases such as Toy Story 3, and they have put average ticket prices up by just over 5% to £5.44. However, nearly two-thirds of cinema-goers feel prices are going up too much. The price of a ticket for 3D film is about 30% more than for a non-3D film.
However, 3D films took nearly 13% of total sales at the UK box office last year and Mintel expects this to grow further. The number of 3D digital screens increased from five in 2006 to 449 in 2009, which is good news for marketers. Digital technology means ads can be produced more quickly and cheaply and aired for shorter periods, enabling more reactive or tactical campaigns.
Ticket prices may reach a tipping point, predicts King. “If you look at the technology markets, there is always a cycle where a new product comes out and it’s expensive but it still appeals to early adopters. Then prices have to come down to appeal to the mass market. We might see something akin to that happening in the [3D] market,” he says.
But there are further opportunities for differentiation between big cinema chains, which Kings says currently tend to be “identikit boxes”. Independent London chain Everyman is attempting to take advantage of this shortcoming, buying Screen cinemas both in and out of the capital to provide a higher-end offering (see Frontline, below). It is also something the multiplexes will have to think about if they are to continue to flourish as their target audience grows up.
WE ASK MARKETERS ON THE FRONTLINE WHETHER OUR ’TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ON THE GROUND
Nial Ferguson, publishing director of entertainment, tech and lifestyle, Future Publishing (brands include Total Film, Sky Movies magazine and Odeon magazine)
We have revamped Total Film in the past few months, as we are trying to reflect how cinema is changing, especially with 3D and new technology, such as improved CGI (computer-generated imagery).
A lot of the chains are using their properties to develop more entertainment occasions. You can watch the Glyndebourne opera festival at Picturehouse cinemas, and that is clearly targeting an older audience.
Our Total Film screening club has a relationship with Cineworld. We give our readers the opportunity to see a film first and for free. You then have an informed audience starting to tweet about the film or encouraging their friends to go and see it. Preview screenings are a way of delivering a more exciting marketing push for all the films that are coming out. It allows us to sample product and to put marketing messages into foyers.
People are willing to pay for quality products and as yet the price point of 3D has not been a barrier at all.
Charlotte Ashburner, senior brand manager, Chambord
The decline in the younger audience wouldn’t affect Chambord advertising at the cinema as our consumers are over 24 years old. For us, cinema advertising is a hugely impactful and beneficial way of communicating with consumers.
Chambord chose to sponsor Pearl & Dean’s Sex & The City idents as it was an opportunity to introduce new consumers to the liqueur, and show it being served with champagne. Cinema was the number four channel to communicate with our core consumers after TV advertising, out-of-home and TV sponsorship.
We decided to sponsor the ident rather than go for a straight advert, as it runs just before the film and uses the well-known Pearl & Dean music that grabs the audience’s attention. Our post campaign feedback has been very positive, with all people questioned remembering our ident.
The most exciting innovation I have seen is 3D advertising. It makes a huge impact on audiences, and the fact that they are asked to put on their glasses for the next advert means the ad captures 100% of their attention.
Andrew Myers, chief executive, Everyman
As an independent cinema, we have to offer a distinct alternative to the multiplexes. Our view is that there is a generation of people who have grown up with the multiplexes who want something different.
We bought the Screen Group in 2008 and in the past 18 months we have converted them from traditional cinemas to a slightly higher-end offering.
Our demographic is anywhere from ages 30 to 75. Our customers want to go out and watch films in an environment they feel comfortable and relaxed in.
We show a variety of movies such as the French film Le Concert at Baker Street and we are also showing Toy Story 3. We don’t tend to show a lot of the rom-coms and horror movies because they don’t appeal to our demographic.
Our understanding is that advertisers are slightly more nervous going into the second half of the year. Last year was a challenging one for us and this year we have had a good first six months.
Spencer McHugh, director of brand marketing Everything Everywhere
As we develop our multi-brand strategy [Orange and T-Mobile], the task will be how we keep the brands different in people’s minds. I’d be surprised if there was a big move for the T-Mobile brand into film as it’s a really strong heartland for Orange.
For Orange, we are looking at people who haven’t necessarily taken someone along to an Orange Wednesday (two for one ticket offer) yet. Movie Mates is an interactive online video show and blog that is presented by comedians. It helps you choose the type of friend you would like to bring to the cinema.
It integrates with our Facebook film club and hopefully provides a bit of engaging and interactive content for people to share. We know cinema-goers tend to be a little younger, but we are hoping to reach a broader audience with this.
We are always looking at new ways to develop our association with film and are keeping an eye on all the trends happening out there, such as using the cinema as an entertainment venue, as well as the continued growth and development of 3D.
Our association with films is good for retention, it gives us an opportunity to have
a conversation with our customers around content and we get to do really interesting partnerships with films, such as The A-Team.
Jeremy Playle, commercial director, DCM, a joint venture between Cineworld and Odeon)
We are picking up substantially more brands that appeal to 35- to 54-year-olds and those aged 55-plus – brands such as The Economist and Mercedes. There is definitely an opportunity for brands that might have written cinema off as being purely for youth to revisit the medium.
Cinema sees itself right at the forefront of 3D. So, for example, Sky has been publicising its move into 3D via cinema and Panasonic is promoting its 3D products through cinema.
The market will be revolutionised over the next two years because digital cinema allows exhibitors to act more like programmers and optimise their layout as they would a TV schedule.
It will enable exhibitors to be far more reactive to the product that is available or to audience trends, which they just can’t do at the moment. Cineworld and Odeon have signed deals that will make them entirely digital within 12 to 18 months.
Lead times will also come down dramatically, which means you can do TV and cinema ad campaigns at the same time, the entry costs into production won’t be an excuse any more and it means offer-led advertising can become reality in cinemas.