PVR explores charging ads less for flops

11 Jul,2012

By Ratna Bhushan

 

Multiplex operator PVR plans to link its advertising rates to ticket sales to make its cinemas more attractive to advertisers.

 

PVR has approached advertisers such as Hindustan Unilever, Bharti Airtel and Hero Group with a first-time concept of charging for advertising at the start and during the interval on the basis of the number of tickets sold, a top PVR executive said.

 

This does away with the practice of advertisers having to pay on the basis of projected box office collections of a movie.

 

“There’s a captive audience, no remote control and least amount of spill over. Most of all, it’s completely validated because we can’t over-state ticket sales,” said PVR COO Gautam Dutta.

 

The concept means advertisers can fix the reach and duration for which they pay to advertise. So, for example, if Agent Vinod flopped, advertisers would have the option of pulling out midway, and instead put their money on another flick-say, Kahaani.

 

The bulk deal they would have committed to PVR gets carried forward to the next movie.

 

Media-buying houses, which have been rooting for higher accountability on television ad spends, are keen on the new concept.

 

“This could be a significant step towards making cinema advertising more accountable. Though small compared to television, it at least guarantees returns on investment,” said Basabdutta Chowdhury, CEO of Platinum Media, a division of media buying group Madison World, which buys media for Bharti Airtel.

 

Ajit Varghese, MD, South Asia of Group M-promoted media buying firm Maxus, which buys on behalf of Hero Group, says: “Cost per audience is always a better measure in cinema advertising. It’s an ideal way of moving ahead, as long as it is implemented well.”

 

The cost of in-theatre advertising works out about eight times cheaper than mass media, say media buyers. Theatre operators are allowed 18 minutes of advertising per movie screening.

 

The buys can be segmented for consumers in tier II cities – at PVR Talkies, or at the high-end PVR Premiere, or at the luxury cinema Director’s Cut.

 

Mr Dutta says the rates are flexible and would vary: “If Hero wants to advertise in our theatre in Baroda, rates will obviously be lower. If they want to buy screen time on theatres in Juhu in Mumbai, we will charge more.”

 

PVR operates 179 screens across 24 cities. The move targets 28 m viewers in a year across PVR screens.

 

Below-the-line advertising and promotions are common for most cinema and multiplex players. India’s largest carmaker Maruti, for example, had used sound technology to promote the launch of its new Zen model, while toothpaste brand Close Up had run a promotion where seats were sold only for couples.

 

In 2011-12, cinema advertising contributed 13.5 per cent, or Rs61 crore, to PVR’s revenue of Rs492 crore. The company is projecting Rs85 crore in advertising revenue this fiscal. The concept could catch up among rival multiplex players as well.

 

Source: The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

 

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