Pearl & Dean fanfare healthier than ever

THE wine bars of Soho are awash with tears - the advertising industry is having a dreadful time. Over the first nine months of this year, the amount spent on radio commercials fell by more than 6% while the slump in television advertising was nearly 10%.

No wonder the folk from adland, with their sharp suits and sharp haircuts, look about as cheerful as a ripped fly-poster in January. But there is one advertising medium that has enjoyed a bumper year. And who's to thank for that? Step forward Bridget Jones. Give a big hand to Harry Potter.

Yes, cinema advertising is booming. While newspapers, magazines and TV have seen advertising revenues shrink, the money spent on the big screen in the first nine months of this year was up by nearly 50% on the same period last year.

Two companies have the cinema scene sewn up - Carlton Screen Advertising, owned by media giant Carlton Communications, and Pearl & Dean, which is best-known for its pa-pah pa-pah pa-pah pa-pah pa pa pa fanfare.

In its other businesses, Carlton is under pressure from tumbling TV advertising revenues and losses in its ITV Digital joint venture. Carlton has dominated cinema advertising, but last week it suffered a significant blow when it lost a contract to Pearl & Dean, part of TV-to-radio group SMG, to sell advertising across UGC Cinemas' 43 outlets and 405 screens in Britain and Ireland.

In the early Eighties, Pearl & Dean's market share dropped as low as 12%. But the company clawed its way back to 30% and the UGC deal will boost that to 43% compared with Carlton's 57%.

Debbie Chalet, managing director of Carlton Screen Advertising, said: 'It was disappointing, but it was a competitive tender and we have prised contracts from Pearl & Dean in the past. However, it has been a stonking year for cinema advertising.'

Why should that be? Just look at this year's films. Christine Costello, chief executive of SMG's Out Of Home division, which includes Pearl & Dean, said: 'This year has already benefited from hits such as Bridget Jones and Hannibal. Harry Potter should provide a further boost.

'Cinema can deliver the crucial 16 to 24 age group to advertisers and they can target audiences there more easily than on TV.'

The industry plans to make the most of Harry Potter. Advertising slots are expected to run for about 12 minutes ahead of the film - most cinemas usually run adverts for just five or six minutes.

Cinema is still a niche medium for advertisers. In the first nine months of this year, it accounted for revenue of £96m compared with £377m for radio and £2.5bn for TV. But cinema is taking market share from other advertising formats, particularly television.

Britain is the world's second-biggest cinema advertising market after Germany. In America, the industry is tiny - the Hollywood studios' domination of the cinema system means they demand that trailers for films, rather than adverts, are shown. Costello said: 'Cinema had 1.2% of the UK advertising pie last year and will have about 1.8% this year.

'We expect it to be above 2% next year on the back of films such as the next Star Wars and Men In Black II.'

Chalet said: 'We have been helped by hit movies, but also because we have extended advertising from the screen to cinema foyers with posters and exhibits such as cars.' In addition, the Government is a big spender with the Central Office of Information advertising in cinemas to warn of the dangers of drugs and the Ministry of Defence running recruitment adverts.

And companies are eager to secure the final advertising slot before a film - Pearl & Dean is in talks with mobile phone group Orange about extending its existing contract for this prime spot.

Carlton has been the major player since 1996 when it bought Cinema Media, formerly Rank Screen Advertising, for £58.5m. But Pearl & Dean, which will celebrate its 50th anniversary in 2003, is determined to challenge for the number one spot at the box office.