This is NOT cinema? (Meme reference background here.)
No, but seriously, earlier this week, National CineMedia, the country’s largest cinema advertising platform, has agreed to acquire Captivate, a digital video OOH ad network, for $275 million.
The deal, which is expected to close in the second half this year, would create a combined network of more than 48,000 screens across movie theaters, office buildings, and residential buildings.
Why This Matters:
Diversification, baby.
NCM helps advertisers reach moviegoers across 22,000 theater and lobby screens in roughly 1,800 theaters and 183 DMAs (think AMC, Cinemark, Regal). We’ve written about the company over the last year as it has expanded its measurement and targeting capabilities. The goal: give marketers more of what they expect from online advertising.
Now, NCM is evolving in another way, moving beyond theaters. Captivate has over 26,000 digital video screens across 11,000-plus office and residential buildings. Its network spans more than 170 DMAs in the US and Canada.
The deal brings NCM into a new DOOH channel and expands its network to more than 48,000 screens across 185 DMAs. It also adds new audiences, as Captivate’s office network reaches affluent professionals and business executives. That opens NCM to more B2B ad budgets and creates new cross-selling opportunities.
Last thing – NCM also gets Captivate’s digital OOH tech and programmatic capabilities, and the company says it plans to bring some of that tech into its theater lobbies.
Experts React:
Here’s what Tom Lesinski, CEO of NCM, had to say about the deal:
“We believe the combination will further strengthen NCM’s financial profile while creating a unique solution that delivers differentiated reach and value for advertisers. Together, NCM and Captivate are a force multiplier, reaching the audiences advertisers value most where they work, live, and play.”
Our Take:
Pretty smart move, we think, by NCM.
The stock dropped post-announcement (it might be due to how they plan to fund the deal, however). Longer term, though, the logic is pretty clear. NCM gets more screens, more environments, new audiences and a bigger digital and programmatic footprint while reducing its reliance on movie theaters alone. That’s especially interesting as DOOH/OOH advertising continues to grow.
PS, We also get more M&A on the month, just as LUMA’s Terry Kawaja predicted.
