National CineMedia CEO Kurt Hall warned Wall Street analysts today that his movie ad business is in for more turbulence, even though theater owners expect to fill seats this summer and TV networks predict robust ad sales in their upfront market. For instance, Hall noted that Japanese auto and consumer electronics companies are among the biggest advertisers in theaters, but they don’t know whether there’ll be enough parts to meet production goals following the country’s earthquake and tsunami. “They don’t want to spend a lot of money [on movie theater ads] if their products aren’t going to be in the stores or dealerships,” Hall says. And Hall said those high-testosterone Army National Guard recruitment ads are disappearing in movie theaters before the trailers. It’s due to budget cuts in Washington — and the National Guard doesn’t need to hunt for applicants in this anemic economy. “A lot of people go into the military because they can’t find jobs in the private sector,” Hall noted. The No. 1 seller of movie theater ads reported a 1Q net loss of $1 million, down from a $1.2 million profit in the same period last year, on revenues of $59.1 million, down 12.8%. The lost advertisers are hard to replace. National CineMedia says it only has about 300 national clients. But Hall had some encouraging news for investors, although not necessarily for moviegoers: The company is starting to sell a lot of pre-movie ads to insurance companies.
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