WW: For a year now, Publicitas Cinecom has had a competitor in Swiss cinema marketing in the form of WerbeWeischer. Publicitas Cinecom started with a market share MA of 71 percent (all of Switzerland), 56 percent in German-speaking Switzerland, WerbeWeischer with an MA of 44 percent (German-speaking Switzerland), 29 percent (all of Switzerland) (see tab.). Is there a change at the start of 2014?
Christian Wittmer CW: We do not expect any significant changes in market shares. Due to the renewals of important partnerships, e.g., in the Zurich area with Arena Cinemas and Neugass Kino, we will market a total of 13 new screens in Zurich in 2014. With these and other partnerships throughout Switzerland, Publicitas Cinecom remains the market leader in all language regions.
Nils Schilling NS: The fact is: there have been significant changes in market shares since WerbeWeischer entered the Swiss market. In German-speaking Switzerland, we now have a market share of 47 percent. In terms of MACH Cinema pools, WerbeWeischer has a 77 percent share in Lucerne, 48 percent in Berne, 80 percent in St. Gallen/Schaffhausen and 56 percent in Zurich - not least thanks to our collaboration with Arthouse - while Publicitas Cinecom only has a 44 percent market share here. We are by far the market leader in the key cities of German-speaking Switzerland - and the development for 2014 is not yet complete, so that overall there will be further shifts in favor of WerbeWeischer.
CW: Including the closures and new openings of cinemas in 2014, which do not yet seem to have been taken into account in Nils Schilling's calculation, we arrive at the previously mentioned market shares according to our projections (based on MACH Cinema's 2013 market shares). We assume the following market shares in 2014: Basel (88%), Bern (52%), Geneva (100%), Zurich (52%, excluding Winterthur 58%), Lausanne (100%) and Lugano (100%). We are thus the only marketer able to continue offering our advertising customers a nationwide cinema portfolio. The new movie theaters of our partners already announced for 2014 are essential components of a realistic forecast of market shares in 2014.
NS: We find it misleading that Publicitas Cinecom argues with market shares for Zurich that are based on cinemas that have not yet opened and thus on visitors that do not yet exist.

WerbeWeischer has so far been active exclusively in German-speaking Switzerland. This is probably related to the division of the two largest cinema operators. WerbeWeischer has the second-largest cinema operator, Kitag, on board, but it is not present in French-speaking Switzerland. The number one, Pathé, which operates throughout Switzerland, is marketed by Publicitas Cinecom. Nils Schilling, you wrote that further shifts are to be expected in 2014. Is this also about western Switzerland?
NS: Our market entry was aimed at the whole of Switzerland from the outset, and of course we will also be active in French-speaking Switzerland.

In 2014, however, you will not yet be able to market any halls in western Switzerland, right?
NS: That is correct.

Christian Wittmer, when was the last time the contracts with Pathé were extended? And: When do they expire?
CW: We have long-term contracts with both Pathé and our second-largest partner Arena Cinemas - exclusive marketing mandates.

Does that mean that Pathé and Arena will remain with Publicitas Cinecom for the next two to three years?
CW: We do not provide information on the content of our contractual agreements with partners.

Publicitas Cinecom and WerbeWeischer differ in their pricing and billing models. Will there be any adjustments in 2014? Will the CPM change, for example? (Publicitas Cinecom: CPM at least CHF 12; WerbeWeischer: CPM at least CHF 11.50).
CW: Publicitas Cinecom will not be changing its price level in 2013/2014. In 2014, we will launch new packages that further simplify access to the medium of cinema and make it more transparent.
NS: Since entering the market, WerbeWeischer has been billing every single visitor for every single cinema performance. More transparency and precision is not possible. Publicitas Cinecom, on the other hand, still calculates using a projection based on a city pool and has no access to this level of detail. Our cost-per-visit billing method at Weischer-Kinopark is the hardest currency in the cinema market. We receive up-to-date data from the box offices on a daily basis. Traceability, transparency and performance-based billing are part of our mission, and cinema operators and advertising clients benefit from this in equal measure. On the question of price development: Overall, there will be a moderate price increase of around five percent across all our products next year, as there is high demand for film-specific bookings and special forms of advertising in cinemas.
CW: With a portfolio of more than 100 partners throughout Switzerland, access to all box office systems is more complex than with a comparatively much smaller partner environment. For this reason, we currently bill on the basis of ticket sales from ProCinema. As an industry association, ProCinema provides a reliable and valid basis. We are also working on an efficient solution that enables billing directly via the box office systems and does justice to the high level of coverage that we offer our customers throughout Switzerland. For the customer, the same applies in both cases: Cinema is the medium with the hardest and therefore most transparent currency.
NS: For clarification, I would like to add: The procedure established by Cinecom merely represents an inaccurate extrapolation of weekly visitor data from the largest cities to the respective campaign. This procedure is not comparable with the billing system introduced by WerbeWeischer at the market launch, which uses the daily attendance figures of each cinema performance from the box office - and thus offers the highest precision and complete transparency for advertising customers.
CW: It seems daring to me to speak of inaccurate projections. We receive figures down to the level of individual movie theaters from the Swiss Association for Cinema and Film Distribution in order to prepare our accounts.

How do things look in the area of cross-media offerings?
CW: We are further expanding our cross-media offerings in 2014. In addition to Star-TV, other TV stations will be included in the offering. Cineman. ch and Kinowetter.ch will be followed by further online portals.
NS: In the online sector, we will also be cooperating with 20 Minuten in future, in addition to our existing cinema web offering, and will market cinema in the entertainment sector exclusively for Tillate.com. Here, our partners will also benefit from the high level of experience we have gained in Germany in online dialog with cinema target groups. Other cross-media offerings include ad screens, our monitor system for foyer advertising, and numerous touchpoints in cinemas that we use to showcase our brands.

Cross-media offers may lead to an increase in revenue for cinema operators. However, it is unattractive for cinema marketers that it is not recorded in the advertising statistics. Agreed?
NS: Of course, we have a great interest in ensuring that each advertising medium provides proof of its performance - in this respect, we are positively disposed toward possible developments for recording cross-media offerings. But in general, I would like to emphasize: We cannot strengthen the medium of cinema by means of advertising statistics.
CW: Publicitas relies heavily on cross-channel media solutions. Individual measures can already be measured in one way or another. Due to different currencies, the need for explanation on the part of the customer may increase, but advantages such as the increased effectiveness of a cross-media campaign outweigh this. For example, a study commissioned by Publicitas Cinecom from the research company Brand Science showed that cinema in the media mix both generates additional revenue and strengthens the overall campaign.

WW: How high is the "non-cinematic" share (i.e. everything except cinema screen) in cross-media campaigns?
CW: That depends very much on the campaign. Within the Publicitas portfolio, cinema can be only a small part of a cross-media campaign on the one hand, while on the other hand there are clients who use cinema as their main medium and complement it with other offers. NS: On average, we record a "non-cinematic" share of around ten percent for cross-media campaigns. For individual campaigns, however, this share can sometimes exceed 50 percent of the total campaign budget. We definitely see potential for growth in this area.

Digitization has opened up the possibility of cooperation with private national TV stations, regional broadcasters or even Publisuisse. Are there any plans in this area?
NS: We see our task as marketing cinema - and we are one hundred percent passionate about this task. Cinema has a unique contact quality, and if the medium of cinema is to be networked with other media in terms of campaigns, this is primarily the task of media agencies to develop efficient solutions here. And one more thing: Our cinema partners also expect us to ensure that our marketing activities do not move outside the cinema-affinity radius.
CW: As a marketer of TV stations as well, Publicitas is focusing strongly on an increasingly intensive exchange between TV and cinema. Cross-media campaigns are increasingly in demand among our agency and direct customers.

Final question: Cinema advertising is a niche medium due to its low reach. When WerbeWeischer entered the market, the motto was: competition stimulates the market. How successful were you in this respect, and was cinema advertising able to gain additional shares of the advertising pie overall?
NS: In our view, the decline in cinema advertising of around 40 percent between 2003 and 2012 (gross advertising print advertising market statistics Media Focus) was caused by marketing of cinema that was no longer in line with the times. There has been no further development of the medium during this time - in this respect, there was a high need for reform when we launched in the Swiss market at the beginning of last year. Not least through the cinema advertising model "Cinema Reloaded," WerbeWeischer is providing the urgently needed innovative impetus here. Against this background, we see even more potential for cinema in the media mix - also because of the extraordinary impact of this wonderful medium.
CW: The gross figures for advertising pressure calculated in Media Focus are the wrong figures for determining the share of the advertising pie. With regard to market development, the advertising statistics with their recording of net sales are decisive across all sectors, not advertising print. According to the Stiftung Werbestatistik Schweiz (Swiss Advertising Statistics Foundation), the cinema market has been at a stable level since 2008, while in 2011 to 2012 net sales even increased by 25 percent - the downward trend was thus already absorbed before the competitive situation arose (net sales 2009: CHF 26 million, 2010: CHF 28 million, 2011: CHF 24 million, 2012: CHF 30 million). Another aspect is the share of cinema advertising in total advertising expenditure, and here we cannot complain: With a share of around 0.7 percent, Switzerland is relatively high in an international comparison and shows a higher value than, for example, Germany with a share of cinema advertising of around 0.5 percent (source: SAWA). We see this as reinforcing our strategy of continuous further development of the medium, which we are pursuing on a sustained basis with the expertise of the long-standing market leader in Switzerland.

Moderation: Isabel Imper

WW: For a year now, Publicitas Cinecom has had a competitor in Swiss cinema marketing in the form of WerbeWeischer. Publicitas Cinecom started with a market share MA of 71 percent (all of Switzerland), 56 percent in German-speaking Switzerland, WerbeWeischer with an MA of 44 percent (German-speaking Switzerland), 29 percent (all of Switzerland) (see tab.). Is there a change at the start of 2014?
Christian Wittmer CW: We do not expect any significant changes in market shares. Due to the renewals of important partnerships, e.g., in the Zurich area with Arena Cinemas and Neugass Kino, we will market a total of 13 new screens in Zurich in 2014. With these and other partnerships throughout Switzerland, Publicitas Cinecom remains the market leader in all language regions.
Nils Schilling NS: The fact is: there have been significant changes in market shares since WerbeWeischer entered the Swiss market. In German-speaking Switzerland, we now have a market share of 47 percent. In terms of MACH Cinema pools, WerbeWeischer has a 77 percent share in Lucerne, 48 percent in Berne, 80 percent in St. Gallen/Schaffhausen and 56 percent in Zurich - not least thanks to our collaboration with Arthouse - while Publicitas Cinecom only has a market share of 44 percent here. We are by far the market leader in the key cities of German-speaking Switzerland - and the development for 2014 is not yet complete, so that overall there will be further shifts in favor of WerbeWeischer.
CW: Including the closures and new openings of cinemas in 2014, which do not yet seem to have been taken into account in Nils Schilling's calculation, we arrive at the previously mentioned market shares according to our projections (based on MACH Cinema's 2013 market shares). We assume the following market shares in 2014: Basel (88%), Bern (52%), Geneva (100%), Zurich (52%, excluding Winterthur 58%), Lausanne (100%) and Lugano (100%). We are thus the only marketer able to continue offering our advertising customers a nationwide cinema portfolio. The new movie theaters of our partners already announced for 2014 are essential components of a realistic forecast of market shares in 2014.
NS: We find it misleading that Publicitas Cinecom argues with market shares for Zurich that are based on cinemas that have not yet opened and thus on visitors that do not yet exist.

WerbeWeischer has so far been active exclusively in German-speaking Switzerland. This is probably related to the division of the two largest cinema operators. WerbeWeischer has the second-largest cinema operator, Kitag, on board, but it is not present in French-speaking Switzerland. The number one, Pathé, which operates throughout Switzerland, is marketed by Publicitas Cinecom. Nils Schilling, you wrote that further shifts are to be expected in 2014. Is this also about western Switzerland?
NS: Our market entry was aimed at the whole of Switzerland from the outset, and of course we will also be active in French-speaking Switzerland.

In 2014, however, you will not yet be able to market any halls in western Switzerland, right?
NS: That is correct.

Christian Wittmer, when was the last time the contracts with Pathé were extended? And: When do they expire?
CW: We have long-term contracts with both Pathé and our second-largest partner Arena Cinemas - exclusive marketing mandates.

Does that mean that Pathé and Arena will remain with Publicitas Cinecom for the next two to three years?
CW: We do not provide information on the content of our contractual agreements with partners.

Publicitas Cinecom and WerbeWeischer differ in their pricing and billing models. Will there be any adjustments in 2014? Will the CPM change, for example? (Publicitas Cinecom: CPM at least CHF 12; WerbeWeischer: CPM at least CHF 11.50).
CW: Publicitas Cinecom will not be changing its price level in 2013/2014. In 2014, we will launch new packages that further simplify access to the medium of cinema and make it more transparent.
NS: Since entering the market, WerbeWeischer has been billing every single visitor for every single cinema performance. More transparency and precision is not possible. Publicitas Cinecom, on the other hand, still calculates using a projection based on a city pool and has no access to this level of detail. Our cost-per-visit billing method at Weischer-Kinopark is the hardest currency in the cinema market. We receive up-to-date data from the box offices on a daily basis. Traceability, transparency and performance-based billing are part of our mission, and cinema operators and advertising clients benefit from this in equal measure. On the question of price development: Overall, there will be a moderate price increase of around five percent across all our products next year, as there is high demand for film-specific bookings and special forms of advertising in cinemas.
CW: With a portfolio of more than 100 partners throughout Switzerland, access to all box office systems is more complex than with a comparatively much smaller partner environment. For this reason, we currently bill on the basis of ticket sales from ProCinema. As an industry association, ProCinema provides a reliable and valid basis. We are also working on an efficient solution that enables billing directly via the box office systems and does justice to the high level of coverage that we offer our customers throughout Switzerland. For the customer, the same applies in both cases: Cinema is the medium with the hardest and therefore most transparent currency.
NS: For clarification, I would like to add: The procedure established by Cinecom merely represents an inaccurate extrapolation of weekly visitor data from the largest cities to the respective campaign. This procedure is not comparable with the billing system introduced by WerbeWeischer at the market launch, which uses the daily attendance figures of each cinema performance from the box office - and thus offers the highest precision and complete transparency for advertising customers.
CW: It seems daring to me to speak of inaccurate projections. We receive figures down to the level of individual movie theaters from the Swiss Association for Cinema and Film Distribution in order to prepare our accounts.

How do things look in the area of cross-media offerings?
CW: We are further expanding our cross-media offerings in 2014. In addition to Star-TV, other TV stations will be included in the offering. Cineman. ch and Kinowetter.ch will be followed by further online portals.
NS: In the online sector, we will also be cooperating with 20 Minuten in future, in addition to our existing cinema web offering, and will market cinema in the entertainment sector exclusively for Tillate.com. Here, our partners will also benefit from the high level of experience we have gained in Germany in online dialog with cinema target groups. Other cross-media offerings include ad screens, our monitor system for foyer advertising, and numerous touchpoints in cinemas that we use to showcase our brands.

Cross-media offers may lead to an increase in revenue for cinema operators. However, it is unattractive for cinema marketers that it is not recorded in the advertising statistics. Agreed?
NS: Of course, we have a great interest in ensuring that each advertising medium provides proof of its performance - in this respect, we are positively disposed toward possible developments for recording cross-media offerings. But in general, I would like to emphasize: We cannot strengthen the medium of cinema by means of advertising statistics.
CW: Publicitas relies heavily on cross-channel media solutions. Individual measures can already be measured in one way or another. Due to different currencies, the need for explanation on the part of the customer may increase, but advantages such as the increased effectiveness of a cross-media campaign outweigh this. For example, a study commissioned by Publicitas Cinecom from the research company Brand Science showed that cinema in the media mix both generates additional revenue and strengthens the overall campaign.

WW: How high is the "non-cinematic" share (i.e. everything except cinema screen) in cross-media campaigns?
CW: That depends very much on the campaign. Within the Publicitas portfolio, cinema can be only a small part of a cross-media campaign on the one hand, while on the other hand there are clients who use cinema as their main medium and complement it with other offers.
NS: On average, we record a "non-cinematic" share of around ten percent for cross-media campaigns. For individual campaigns, however, this share can sometimes exceed 50 percent of the total campaign budget. We definitely see potential for growth in this area.

Digitization has opened up the possibility of cooperation with private national TV stations, regional broadcasters or even Publisuisse. Are there any plans in this area?
NS: We see our task as marketing cinema - and we are one hundred percent passionate about this task. Cinema has a unique contact quality, and if the medium of cinema is to be networked with other media in terms of campaigns, this is primarily the task of media agencies to develop efficient solutions here. And one more thing: Our cinema partners also expect us to ensure that our marketing activities do not move outside the cinema-affinity radius.
CW: As a marketer of TV stations as well, Publicitas is focusing strongly on an increasingly intensive exchange between TV and cinema. Cross-media campaigns are increasingly in demand among our agency and direct customers.

Final question: Cinema advertising is a niche medium due to its low reach. When WerbeWeischer entered the market, the motto was: competition stimulates the market. How successful were you in this respect, and was cinema advertising able to gain additional shares of the advertising pie overall?
NS: In our view, the decline in cinema advertising of around 40 percent between 2003 and 2012 (gross advertising print advertising market statistics Media Focus) was caused by marketing of cinema that was no longer in line with the times. There has been no further development of the medium during this time - in this respect, there was a high need for reform when we launched in the Swiss market at the beginning of last year. Not least through the cinema advertising model "Cinema Reloaded," WerbeWeischer is providing the urgently needed innovative impetus here. Against this background, we see even more potential for cinema in the media mix - also because of the extraordinary impact of this wonderful medium.
CW: The gross figures for advertising pressure calculated in Media Focus are the wrong figures for determining the share of the advertising pie. With regard to market development, the advertising statistics with their recording of net sales are decisive across all sectors, not advertising print. According to the Stiftung Werbestatistik Schweiz (Swiss Advertising Statistics Foundation), the cinema market has been at a stable level since 2008, while in 2011 to 2012 net sales even increased by 25 percent - the downward trend was thus already absorbed before the competitive situation arose (net sales 2009: CHF 26 million, 2010: CHF 28 million, 2011: CHF 24 million, 2012: CHF 30 million). Another aspect is the share of cinema advertising in total advertising expenditure, and here we cannot complain: With a share of around 0.7 percent, Switzerland is relatively high in an international comparison and shows a higher value than, for example, Germany with a share of cinema advertising of around 0.5 percent (source: SAWA). We see this as reinforcing our strategy of continuous further development of the medium, which we are pursuing on a sustained basis with the expertise of the long-standing market leader in Switzerland.

Moderation: Isabel Imper