Pre-show advertising in cinemas is a key revenue driver that significantly contributes to operators’ bottom lines. As the cinema industry evolves — diversifying its offerings to meet changing audience expectations — cinema advertising must also adapt to stay relevant and competitive. Embracing digital solutions, automation, and streamlined workflows is essential to attract a broader range of advertisers and to capitalize on the high-value nature of cinema advertising. Without this transformation, cinema advertising risks falling behind, facing challenges similar to those experienced by media channels like linear television.
Let’s Look at the Numbers
In 2025, linear TV ad revenues are forecast to decline by 3.4%, according to global media agency GroupM. By contrast, streaming ad revenues are expected to grow by 19.3%, driven by the increasing adoption of connected TV and ad-supported video-on-demand platforms.
Global cinema advertising revenues are projected to remain at around $2.5 billion, falling short of the $3 billion generated in 2019.
Meanwhile, digital ad spending on the five major tech platforms – Google, Meta, TikTok (ByteDance), Amazon, and Alibaba – is expected to account for over 50% of global ad spend. This segment is forecast to grow by approximately 10% in 2025 alone, underscoring the dominance of digital media in the advertising landscape.
The State of Cinema Advertising
Similarly to traditional TV advertising, cinema advertising is one of the strongholds of “offline” advertising – advertising that is not yet connected to the digital advertising ecosystem. The pre-show is predominantly sold through national cinema advertising sales agencies. These companies know the cinema sector inside-out and are experts in matching brands with specific film releases. Cinema advertising is a people business and advertising inventory – the available advertising time that cinema operators can sell to advertisers – is sold directly through sales houses’ internal sales teams to media agencies or brands.
Very few cinema advertising sales agencies worldwide offer on-screen digital ad formats that leverage real-time audience data to enable better targeting. Moreover, most sales houses working with cinemas are not connected to the digital advertising platforms that today power more than 70% of the global advertising market. These platforms – Trade Desk, Amazon DSP, Google DV360 and many others – are essential components of what is known as programmatic advertising, enabling advertisers to purchase and manage digital ad inventory across various channels more efficiently and in a more automated way.
Addressing Advertising Inefficiencies
Due to the above mentioned market developments, advertisers buy less advertising inventory directly with cinema advertising sales houses. Picture a media agency – such as the above-mentioned GroupM, who handles around USD $60 billion in advertising budgets on behalf of the biggest brands in the world. Only one in 10 media planning executives for such agencies will even consider cinema as a relevant marketing channel. The other nine are focussed on digital advertising opportunities. In other words, 9 out of 10 media-buying executives cannot access the expertise, insights and the incredible advertising opportunity that national cinema sales houses offer on behalf of their cinema partners.
Moreover, while cinema can command premium advertising prices when blessed with major blockbusters as well as during weekends and other peak times, there are also periods when the pre-show is not sold out. This should be considered an opportunity as cinema advertising has an advantage: the marginal cost of selling an additional ad is almost zero. Once the infrastructure is in place – the auditorium, screen, projector, etc. – selling extra ad slots doesn’t require additional spending. This means that nearly every extra ad sold translates directly into profit for both the sales house and the cinema. To maximize total revenue, cinema advertising should therefore prioritize filling as many ad slots as possible across all campaigns rather than maximizing profits from individual campaigns.
One Size Doesn’t Fit All
To maximize total advertising revenue, cinema inventory should always sell out. Achieving full capacity year-round at the optimal price requires sales houses to offer a variety of formats at different price points across multiple sales channels.
The chart below illustrates the difference between the new digital cinema advertising approach compared to what is currently in place:
A one-size-fits-all approach doesn’t work in cinema advertising because different advertisers, agencies, and sales channels have their own goals, ways of working, and levels of risk they’re willing to take. Some advertisers may prefer fixed pricing for guaranteed placements, reducing unpredictability, while others might want auction-based pricing which introduces price fluctuations and availability risks but offers greater flexibility and potential cost savings. Agencies may focus on brand awareness (upper-funnel) and therefore may be more willing to invest in broad, long-term strategies with less immediate return, accepting a higher level of risk. Those focused on immediate sales (lower-funnel) may seek more measurable and predictable results, reducing their tolerance for uncertainty. And some sales channels may rely more on traditional methods, while others embrace digital programmatic advertising. To maximize success, cinema advertising should offer a variety of options to meet these different needs.
Is Your Cinema Advertising Sales House Future-Proof?
In Scandinavia, digital cinema advertising is growing fast. For Scandinavian powerhouse Nordisk Film Cinemas, digital advertising has reached 15% of total advertising revenue. At Dansk Reklame Film, the Danish sales house for Nordisk Film Cinemas, the expectation for 2025 is to accelerate the growth of digital ad sales via programmatic advertising.
“We see great potential in our digital product development in 2025,” stated Carsten Ellemo, CEO Dansk Reklame Film. “The new year has started with a lot of interesting onboarding meetings with agencies and advertisers regarding programmatic cinema. And of course, it’s very exciting to have the first programmatic campaign up and running already in January.”
Programmatic Advertising
In the United States, market leader National CineMedia (NCM) launched its programmatic advertising platform in 2024. Currently, along with offering direct buys, NCM sells ad inventory programmatically through private marketplaces and on the open exchange. According to the company, media buyers can access real-time, data-driven trading of cinema ad inventory while bidding on available audiences during NCM’s Noovie pre-show. Buyers can choose from programmatic guaranteed and private marketplace options. Additionally, programmatic buys can be customized by reach, geography, film rating, day of the week, and time of day.
Also in the US, Screenvision Media and Spotlight Cinema Networks teamed up to found the Cinema Programmatic Alliance, with the intent purpose of offering each of their inventories to agencies and advertisers purchasing campaigns via programmatic firms. Cinépolis, headquartered in Mexico, acquired the company behind the Lumière Platform, which they describe as the world’s first purpose built programmatic ad solution for the cinema industry, facilitating real-time analytics, ad optimization, targeting, and reporting capabilities for both buying and selling ad spots.
Arts Alliance Media recently entered into a partnership with Cinebid, another advertising technology provider based in Latin America, allowing the company to offer users of its Screenwriter theatre management software access to a programmatic advertising solution.
In Germany, cinema advertising leader Weischer offers media agencies to book advertising inventory via a Demand Side Platform (DSP). With Weischer’s solution, digital booking of cinema advertising currently takes place exclusively within the framework of guaranteed deals.
In the Nordics, Cinemataztic began offering programmatic advertising through a trading desk alongside traditional cinema advertising formats. This allows them to provide traditional cinema advertising campaigns based on fixed pricing as a guaranteed product, while at the same time offering the programmatic format as preferred deals with pricing based on a first-price auction, where campaigns with the highest bid gain priority.
Unlike programmatic trading platforms outside of the cinema space, the Cinemataztic trading desk enables advertisers and agencies to target campaigns based not only on geography and demographics such as age and gender, but also gives direct access to digital cinema inventory which includes movie genres, days of the week and time slots. Targeting is then driven by real-time audience data – a capability we have yet to see in cinema advertising – in turn allowing audience profiles to be matched against campaign objectives for each show, ensuring ads are displayed when the desired audience segment is overrepresented.
By adopting flexible pricing strategies, embracing a comprehensive approach to inventory management, and transitioning to digital advertising solutions, the cinema advertising industry can position itself for revitalization and growth.
Mikkel Hagedorn, CEO and Co-founder of Cinemataztic, contributed to this article.
