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    Danny Jeremiah, AAM's Head of Cinema Products, recently contributed an article to Cinema Technology Magazine exploring the differences between data and insight, and why cinemas and other members of the industry should consider sharing these valuable resources. We have re-posted it here with permission for our readers.

     

    Over the last few years there have been numerous think-pieces, mine included, extolling the virtues 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 them new and improved revenue opportunities, as well as operational efficiencies.

    Exhibitors around the world have taken encouraging steps, such as setting up loyalty schemes, experimenting with subscription models, and investing in data visualisation technology to try to tap into this valuable resource. In fact, industry stalwart Patrick von Sychowski has asked exhibitors at many events, “How many of you have a Chief Information Officer?” and the show of hands does seem to be going up each time.

    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 so far, is that data is really only the raw material, and it needs to be refined before cinemas and other industry partners can extract its real value.

    The allure of big data isn’t in hoarding the largest database for the sake of it. It has always been about what insights you can extract and then apply to your business to gain a competitive advantage. While the raw data can tell you how many people bought tickets to your screening, the analysis might reveal that some of your 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? Those insights are worth orders of magnitude more than the raw data, 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.

    But there is a circular problem here: your data is only as valuable as the insights it can provide, but the quality of your insights depends entirely on the quality of the data. So how do you improve the data and increase the value of the insights?

    In some cases, it might mean combining data sources with other parties for more meaningful analysis, in exchange for some mutual benefit. In others, it might mean conducting analysis internally so that you can start selling the insights directly rather than the data itself.

     

    Exhibitors and Studios

    By now, exhibitors should know who is in their cinema, who they’re with, what they’re seeing, what they’re buying, and what they might be interested in coming back to see next. Beyond that, I think all exhibitors should also understand why they should gather this data. 

    For example, they could use it to optimise their schedules to attract families during the day, and students on a Thursday night. They could tweak their pricing to maximise their revenue during peak times, or invest in new technology or amenities that are performing well with their key demographics elsewhere.

    Data analysis is informing these business decisions and improving the likelihood they will succeed, but the resulting improvements are very self-contained. Exhibition is only one part of the cinema 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 their data and share it with studios. Last December at CineAsia, Kurt Rieder, Executive VP of Theatrical Distribution at 20th Century Fox International used his ‘State of the Industry’ address to provide examples of just that. He described how the insights his studio gained from data that 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 early November, and an animated remake, and yet grossed over $506 million worldwide. 18% of ticket buyers on opening weekend were in the coveted 18 - 24 bracket. This success has been attributed in no small part to its hyper-localised marketing campaigns, which saw the titular character making relatable snarky comments on billboards around the world.

     

    Trailers

    As a rule, outside North America, exhibitors don’t tend to share details of which trailers they’ll play before which films. In the past, resistance was probably linked to the manual efforts required, though there are stories of studio staff attending screenings with notepads nonetheless. Today, however, this shouldn’t be a concern. There are solutions on the market 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.

     

    Exhibitors and Advertisers

    Big brands are tending towards automated solutions that provide them with greater flexibility and control over who sees their ads. The speed and accuracy with which they can now place ads in front of their target audiences, and get feedback from them using programmatic technology, is unmatched by any other type of advertising.

    Gaining access to the right eyeballs is fiercely competitive business, with many online ads being bid on automatically right up to the millisecond before they load in front of the consumer. The economics are simple; the value of that advertising inventory is being pushed higher and higher because brands are increasing demand for efficient, targeted advertising opportunities.

    In 2018, the global spend on programmatic ads rose by 46% to $84.09 billion, and yet, the majority of ad buying for the cinema industry is still handled manually. As long as that is the case, exhibitors will see none of that money. It’s the same problem the television sector is facing, and it’s already affecting their bottom line.

    Speaking to Digiday in late 2018, Graeme Hutcheson, Director of Digital and Sky AdSmart at Sky, revealed the thinking behind their strategy to introduce programmatic advertising to their 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 advertising inventory by collaborating with Screen Advertising Companies (SACs) or software providers. This wouldn’t be a simple transaction between exhibitors with data and the advertisers who want it, but a collaboration with the aim of increasing overall advertising revenue and performance.

    Think of it less like selling advertisers data about the audience that saw their ad last week, and more like selling a car company access to a thousand 25 - 35 year olds who engaged with the brand on social media and live near a dealership. There is growing evidence that consumers prefer being shown relevant advertising, so not only will you raise the value of your screen-time and build stronger relationships with advertisers, but you can also improve your customer experience.

     

    Data has always been part of our ecosystem, the difference is that now automated solutions can aggregate, analyse, and distribute it in ways that improve the quality of the data, produce more valuable insights, and deliver real benefits.

    It’s time exhibitors moved away from looking at their 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.

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