Cinema advertising has always come a poor third in terms of revenue for most cinemas, behind ticket sales and the profits from snacks and soft drinks.
Many major cinema chains around the world contract out their advertising sales to companies they believe will do it better than them. But Singapore's largest cinema chain Golden Village, which has 58 screens at eight multiplexes has changed all that with its decision to take on its own media sales and end its relationship with Val Morgan, the advertising sales company.
And the decision may have a wider implications for Golden Village's relationship with Val Morgan in Australia, New Zealand, Argentina and Hong Kong. "There is a possibility that we will bring our cinema advertising in-house in other markets and a lot of people in Village's Melbourne headquarters see Singapore as a test case, says Kurt Rieder, Golden Village managing director, based in Singapore.
Golden Village isn't just taking ad sales in-house it is also aggressively marketing a broader "cinema-experience to potential advertisers.
Golden Village wants to win over advertisers by offering not just screen advertising but also ads on posters, point of sale material, cinema tickets, popcorn boxes and drink cups.
Golden Village is also allowing product sampling in cinema foyers and is looking into selling naming rights and installing plasma TVs in foyers showing movie session times interspersed with commercials. "It is more attractive for advertisers to buy the whole location, says Rieder, adding that Golden Village has to work harder to win over advertisers and differentiate cinema advertising. Rieder said Singapore's cinema advertising market is only worth S$6-7m (US$3.4-3.9m).
He says some media buyers see it as a secondary medium and put it in the same category as outdoor advertising. He says an in-house team will be better positioned to deliver more innovative advertising ideas to advertisers and agencies.
"When you give a cinema advertising contract to an outside company (like Val Morgan) it is hard for that company to do things outside of that contract, says Rieder.
He said taking sales in-house would improve communication between the cinema managers and sales people. The cinema company has brought in Paul Chung to take the role of media director, leading a team of three sales staff. Chung was previously a consultant with Major Cineplex in Bangkok and before that was at Pearl & Dean cinema advertising in Singapore.
"Paul has the flexibility to be completely creative and think outside of the box, says Rieder.
Golden Village is a joint-venture between Australian company Village and Hong Kong company Golden Harvest.
For Val Morgan, the loss in Singapore is just the latest in a series of recent setbacks. In the year to June, Val Morgan's parent - Television & Media Services (TMS) - lost around US$42.6m partly due to some unprofitable cinema contracts. These contracts came about, because in the late '90s Val Morgan became embroiled in a bidding war with Media Entertainment Group (MEG), a cinema advertising rival Val Morgan eventually acquired in June 2000. This acquisition gave Val Morgan a monopoly of Australia's A$40m (US$21.7m) cinema ad market, but it also inherited some cinema contracts, including Village, which it is now trying to renegotiate.
The move in Singapore is clearly a reflection of difficult advertising times for everyone - but also a signal that cinema owners, like every medium, are having to work harder to get themselves on advertisers' radar.
