Danny Jeremiah, the head of cinema products at Arts Alliance Media, argues that, with data, harvesting it is fine, but the real goal is to refine it and extract its value.
Opinion articles by the dozen have been written, mine included, extolling the virtue of big data to the cinema industry. We argued that cinemas were in a prime position to gather customer data, and that building audience profiles would offer new and improved revenue opportunities, as well as operational efficiencies.
Exhibitors around the world have taken encouraging steps, setting up loyalty schemes and subscription models, and investing in data visualisation technology to try to tap into this valuable resource. The cinema industry has heeded the lessons about the necessity of gathering data taught, if not by the writers of spirited op-eds, then by other businesses. What we haven’t argued as effectively is that data is only raw material that needs refining before cinemas and industry partners can extract its real value.
The allure of data isn’t in hoarding the largest database. It has always been about what insights you can extract and apply to gain an advantage. While raw data can tell you how many people bought tickets to a screening, analysis might reveal some sites attract a disproportionate number of students, but only one of them is convincing them to spend money on concessions. What’s different about that site? Insights like that are worth more than raw data, in the same way gold is worth more than the gravel it came from. The conclusion is clear: don’t sell the data, sell the insights.
There is a circular problem: your data is only as valuable as the insight it provides, but the quality of your insight depends on the quality of the data. So how do you improve the data and increase the value of the insight? In some cases, it might mean combining data sources with other parties for more meaningful analysis, in exchange for mutual benefit. In others, it might mean conducting analysis internally so you can start selling insights directly rather than the data itself.
Exhibitors and studios
By now, exhibitors should know who is in their cinema, what they’re seeing, what they’re buying, and what they might be interested in coming back to see. Beyond that, all exhibitors should understand why they should gather this data. For example, they could use it to optimise schedules to attract families in the day, and students on a Thursday night. They could tweak pricing to maximise revenue at peak times, or invest in new technology or amenities that perform well with their key demographics elsewhere. Data analysis informs these business decisions and improves the likelihood they will succeed, but the resulting improvements are self-contained. Exhibition is only one part of cinema’s ecosystem, and though there are clear behavioural changes exhibitors can make based on their own data, its scope is limited.
Boosting box office
Now compare that to what can be achieved when exhibitors pool data and share it with studios. In December at CineAsia, Kurt Rieder, executive VP of theatrical distribution at 20th Century Fox used his “state of the industry” address to provide examples of just that. He described how insights his studio gained from data exhibitors shared with them allowed him to produce bespoke marketing campaigns for them. He acknowledged there was little appetite to purchase that data, but that the marketing plans represented something altogether more valuable — a competitive advantage for the exhibitors that took part, and a boost in box office takings.
Imagine if every movie had a marketing strategy as tailored as “The Grinch”, which faced challenges as both a Christmas movie released in November and an animated remake, and yet grossed over $506m worldwide. Some 18% of ticket buyers on opening weekend were in the coveted 18-24 bracket. This success was attributed in no small part to hyper-localised marketing, which saw the Grinch character make relatable snarky comments on billboards worldwide.
Exhibitors and advertisers
Big brands are tending towards automated solutions that give flexibility and control over who sees their ads. The speed and accuracy with which they can place ads in front of target audiences, and get feedback from them using programmatic technology, is unmatched by any other type of advertising.
Accessing eyeballs is big business, with many online ads being bid on automatically up to the millisecond before they load in front of the consumer. The economics are simple; the value of that ad inventory is being pushed higher and higher because brands are increasing demand for efficient, targeted ad opportunities. In 2018, global spend on programmatic advertising rose by 46% to $84.09 billion, yet the majority of ad buying for cinema is still handled manually. While that is so, exhibitors won’t see any of that money. The TV sector is facing the same problem — and it’s hitting their bottom line.
Speaking to “Digiday” last year, Graeme Hutcheson, director of digital and Sky AdSmart at Sky, revealed the thinking behind its strategy to introduce programmatic ads to its streaming services and, eventually, live TV offerings. “There are media plans out there with no TV on them, so there’s pressure to take some of that money back from the alternative online channels that money is going toward.”
As digital organisations, cinemas could be exploring the ability to offer programmatic ad inventory by collaborating with screen advertising companies or software providers. This wouldn’t be a simple transaction between exhibitors with data and advertisers who want it, but a collaboration to increase ad revenue and performance. Growing evidence shows consumers prefer to see relevant ads. Not only will you raise the value of your screen-time, and build relationships with advertisers, you improve your customer experience.
Data has always been part of our world, the difference is that automated solutions can now aggregate, analyse, and distribute it in ways that improve its quality, produce more valuable insights, and deliver real benefits. It’s time exhibitors moved away from looking at data as primarily something they can sell, and start thinking about how they can create actionable insights for themselves, and for the whole industry. That’s where they’ll strike gold.
Why share your trailer data…?
As a rule, outside North America, exhibitors don’t tend to share details of which trailers they play before which films. In the past, resistance was probably linked to manual efforts required, though there are stories of studio staff attending screenings with notepads. Today, however, this shouldn’t be a concern. There are solutions that pull logs and playback reports in near real-time via reliable APIs. It’s reasonable to think, “it’s my information — if they want it they can pay for it”, but that discounts the value of the mutual benefits of sharing the information. Sharing that 35-50 year old women made up 30% of the people that registered their interest in an upcoming feature after seeing the trailer gives studios a huge advantage in positioning the rest of their marketing efforts. The goal here is to encourage an overall increase in cinema visitors, and coaxing them away from alternative ways of spending their time and money. Ultimately, sharing data benefits the industry as a whole, not just one party.