Advertising in movie theaters is growing faster than all other traditional ad formats — and China dominates

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Ads shown before movies in theaters are set to generate $4.6 billion in revenue around the world in 2019, a 6.8% increase on last year.

This is a faster rise than any other traditional ad format, such as TV, radio or billboards, according to the World Advertising Research Center (WARC), but a slower rise compared to ads shown on mobile phones or via online video. Ad growth is set to increase by 4.6% overall in 2019.

Although still a small proportion of global ad spend on all media at 0.7%, pre-movie ads are popular because of their large formats and captive audience. Commercial spots are also "brand safe," because unlike with some digital formats, media buyers can be sure that ads won't be placed next to inappropriate content.

China dominates ad spend in cinemas, set to take $1.8 billion in 2019 and the country has accounted for 75% of global growth in cinema ad spend since 2015, according to WARC. The U.S. will take around $735 million in ad spend.

According to data from IHS Markit, China added more than 9,000 screens in 2018, which equates to around 25 new screens per day, mostly in smaller conurbations known as tier two to tier five cities.

Spider-Man leaving the Marvel Cinematic Universe
Spider-Man leaving the Marvel Cinematic Universe

China is becoming an increasingly important market for movies, and its box office took $9 billion in 2018, second only to the U.S. and Canada, which took $11.9 billion, according to the Motion Picture Association of America.

WARC's report predicts that China's box office revenue will overtake the U.S. in 2020, and by 2023 Chinese revenues will hit $15.5 billion against $12.5 billion for the U.S.

American movies such as "Avengers: Infinity War," were among the highest-grossing in China in 2018, taking $347.5 million, according to the National Film Bureau. The top-grossing movies included Chinese action war movie "Operation Red Sea," with $530.8 million, followed by mystery comedy "Detective Chinatown 2" ($494 million).

Top grossing movies in the U.S. and Canada last year include "Black Panther" (with box office takings of $700.1 million), "Avengers: Infinity War" ($678.8 million) and "Incredibles 2" ($608.6 million).

Brands targeting younger consumers may also benefit from cinema ads, the research suggests. People aged 16 to 34 call movie theaters a "premium experience," over watching live TV, or going on social media, for example. As cinemas are often part of retail complexes, advertisers may further benefit from sales before or after movies, according to WARC Data Managing Editor James McDonald.