New focus for film marketing --- Internet, mobile grab more studio spending

Great Article on marketing within the studio system.

Happy New Year!

Jean-Luc Martin

Production Manager

Just a few short years ago, when studio marketers were looking to get the most bang for their buck, the basic questions were simple: How much can we spend on TV? And which of the old reliables -- billboards, newspaper ads in top markets -- get the rest?

Today, marketing mavens are still building their promo plans around TV, but the old reliables are anything but.

Marketing remains as shrouded in secrecy as the inner workings of the CIA. And while studios are cutting costs across the board -- slashing talent salaries, reducing the number of movies they finance and produce, and laying off staffers -- they fork over as much as ever on marketing. But where they're spending that money is shifting.

If a studio thinks a film has a chance at grossing north of $150 million domestically, it will lay out $100 million or more for a worldwide campaign. For a film that's hoping to gross $50 million or more domestically, a studio will spend $30 million-$40 million.

In the first two quarters of this year, $1.7 billion was spent to promote theatrical releases, a 1.2% gain vs. the same period in 2008, despite the economic crisis, according to Nielsen Monitor-Plus. (Other sectors, including automotive and pharmaceuticals, were down by double digits.)

Television and radio remain the cornerstones of pic marketing spends, gobbling up 60% to 70% of a promo campaign's budget. But with auds dipping into everything from text messages to Facebook to TV and the Internet -- often simultaneously -- the studios are spreading their marketing moolah wider, across multiple venues, with multiple trailers, multiple approaches and specific demos in their sights.

There are no longer general-interest campaigns. Studio promo efforts have become more targeted, looking to engage core audiences in key demos more directly and actively.

And film marketers have revived an old Hollywood showman's tradition, the roadshow, in which stars and filmmakers make stops in multiple cities around the globe to tubthump their upcoming releases.

While the money spent on digital marketing has increased, it's almost surprising the totals aren't higher. In 2002, an estimated 1% of a film's marketing budget was allocated to digital. A few years later, that figure rose to 4.4%, according to a 2007 MPAA report. Today, 8%-12% of the marketing budget is devoted to new media, such as Internet and wireless promotions.

And while studios spent about 14% of a film's marketing budget on newspaper ads in 2004, and 10% as recently as 2007, they now allocate maybe 4%, according to studio insiders.

It's a sign of the times that for "Avatar," perhaps the most expensive movie ever made and a major year-end release, 20th Century Fox devoted at least 10% to promotion on the Web, while buying just a single full-page ad in the Los Angeles Times and the New York Times on opening day -- significant, but modest relative to the movie's size and scope.

Similarly, Paramount last summer took out only one full-page ad on opening weekend in the New York Times and the Los Angeles Times for the debut of "Transformers: Revenge of the Fallen." When rival studios saw that "Transformers" wasn't hurt by having virtually no newspaper presence -- the film grossed $200 million in its first five days -- they took note. Warner Bros. quickly cut back on its print campaign for "Harry Potter and the Half Blood Prince," which bowed two weeks later and grossed $158 million in its first five days.

The downward shift in ad placement has huge ramifications for big-city newspapers, already pinched by declining readership and the loss of other key advertisers. Not long ago, the usual practice was to take out full-page or two-page (double-truck) ads on the Sunday preceding a film's bow, then on opening day, and once or twice each weekend for the next few weeks. The Friday editions of major newspapers were stuffed with pages and pages of movie ads.

Today, the number of print ads touting films has dwindled sharply, even in the mainstay New York Times (where a double-truck ad can cost $175,000, while a full-page ad goes for $95,000) and Los Angeles Times (where rates are somewhat less than at the Gray Lady).

There is one demo that studios do still rely on newspapers to reach: older adults. In particular, prestige titles that are review-driven continue to use newspaper ads. Recent examples include "Fantastic Mr. Fox" and "The Lovely Bones."

"Newspapers aren't a decision-making medium anymore, except for older audiences and movies that are really review-driven," one studio topper says.

Other marketing traditions, like static movie billboards, also have become an endangered species or have been shifted to supplement online campaigns, as Sony did with "District 9." Studios still devote 8% to 12% of their total marketing campaigns on outdoor, but the number used to be closer to 20%.

It's a reflection of the increasingly cluttered media environment that building awareness of a movie now demands more than just delivering a message passively to prospective audiences. It's now about engaging them more directly.

Besides allocating more marketing money to new areas, studios are using fresh takes on old ones, such as the revived practice of the "traveling roadshow."

With its relaunch of the venerable "Star Trek" film franchise this past summer, Paramount faced a key hurdle: overseas audiences weren't traditionally "Trek" fans.

So the studio rolled out high-profile advance screenings of the J.J. Abrams film both domestically and abroad. It created splashy showcases in various countries from Austria, Belgium, Holland and Spain to New Zealand, and brought the filmmakers and stars along to do local media interviews. Director Abrams even traveled to Kuwait to show the film to U.S. troops. Par also held a handful of official "Star Trek" premieres around the globe, in Australia, Germany, London and the U.S.

The costs of such ground efforts vary quite a bit, depending on the scope of the campaign and the movie's heft.

With a lower-budget marketing effort, aiming for less-splashy events, as was the case with "Paranormal Activity," each city can cost about $15,000. But on a bigger-scale film with more talent participants, such as "Star Trek," the cost of each leg of a roadshow can run to $100,000 or more. That adds up to better than $1 million overall for such multicity tours, be they international or domestic.

The payoff, though, is evident: "Star Trek" grossed $127.7 million internationally, considered a huge victory. (Domestically, where the franchise has a loyal following, the pic cumed $257.3 million).

Warner Bros. faced an equally tough challenge in taking "The Hangover" overseas, as American comedy is often a tough sell. Drawing from the same playbook that Paramount did, Warners held special "Hangover" screenings around the globe in many of the same spots "Trek" visited. "Hangover" became the top grossing R-rated laffer of all time, both domestically and overseas.

Back in the U.S., the studios are doing more word-of-mouth screenings and local promos, such as cable TV campaigns -- an effort that one marketing exec refers to as "geo-targeting." Such focused approaches make more sense than spending big money on newspaper advertising and big network TV, says the exec.

For veterans of the marketing game, such localized efforts recall Hollywood's roots back -- way back -- in the silent-film era; it's the old mantra of "hit 'em where they live." What is new is that studios -- after years of false starts -- are also finally learning how to harness the Internet and social networking to their advantage.

The 2009 box office saw an unusual number of films climb to unexpected heights, and several of them -- including "Paranormal Activity," "District 9" and "The Hangover" -- were helped by innovative, viral marketing campaigns.

With "Paranormal Activity," the microbudgeted horror film that DreamWorks picked up for $350,000, Par built buzz with midnight screenings in select markets and then sent fans to online site Eventful to petition for the pic to go wide when it hit 1 million requests.

The pic gradually widened with the slogan, "You demanded it!" reinforcing the idea that the audience was actively participating in the film's bow. The pic has grossed $104.2 million domestically.

"There are so many ways for people to communicate instantaneously," a Par exec says. "One person who comes to a screening tells lots of people about the movie, or (tweets) about it, or posts something."

Such of word-of-mouth is invaluable, but its actual cost is relative to expectations. One exec estimates the marketing budget for "Paranormal Activity" at something less than $20 million. That's very low considering other films' marketing budgets and the horror pic's eventual gross, but it's pretty high considering that the pic's production budget was a mere $11,000.

With its marketing campaign for sci-fi thriller "District 9" this past summer, Sony was the envy of rival marketing execs. The studio paired a barrage of creative content on the Internet with an innovative outdoor campaign. Cryptic billboards and bus-stop ads drove consumers to the film's website. The website then gave partial explanations as it promoted the film. Audience members had to be versed in both the old and new marketing realms to piece the full concept together. "District 9," an inexpensive pickup for the studio for which it spent roughly $20 million on marketing, turned into a phenom, grossing $115.6 million domestically.

While Internet ads do cost appreciably less than traditional media, studios are still spending as much as ever in two traditional areas: television ads and trailers.

Thursday-night television remains an oasis for movie ads because studios want to woo viewers to their Friday pic launches. Go-to shows on Thursday include "The Office" and "30 Rock," both on NBC, and "CSI" on CBS."CSI" is especially key for a movie that needs support from the middle of the country, vs. the two coasts.

Shows airing on other nights of the week also carry plenty of movie spots these days, and sports and reality programming get plenty of the ad action. According to a recent survey by AdAge, Fox's upcoming season of "American Idol" is fetching $360,000 to $490,000 for a 30-second spot. That's more even than NBC's Sunday Night Football ($339,700) commands. Among scripted shows, ABC's "Grey's Anatomy" gets a price of $240,462 and ABC's "Desperate Housewives," $228,851.

"There are only a few places left that get a huge audience, like the Super Bowl. Marketing has become a more complicated science," one studio topper says.

As for trailers, that staple of the moviegoing experience, they're still the chief means by which a studio introduces a new film to the public. In 2007, 4% of a pic's marketing budget went to trailers. The thinking is that if you've already got 'em in the seats, in a film state of mind, why not tout your upcoming pics as well?

At a minimum, there are two trailers cut for most movies: the "teaser" and the "payoff." For some titles, there are three or four different trailers.

One former studio exec says studios are still spending too much on trailers, sometimes commissioning three to six companies to create separate trailers, then picking one or two of the best from among the choices. While studios used to produce trailers inhouse, trailer production is now routinely outsourced, with costs ranging between $100,000 and $300,000 to produce each one, according to estimates.

Such considerations of cost and impact will continue to confront the majors as they face increased pressure from their parent congloms to reconcile the bottom line.

Marketing spends must be accounted for in the quarter a film is released, even though box office returns might not come in until the following quarter. This can drag down an earnings report, and raise eyebrows up and down Wall Street.

"The landscape is shifting. We're sort of betwixt and between," one studio marketer laments. "While everyone is clearly focusing on the Internet, we're just not at a place yet where we can do less television. That's why it's such a confusing, interesting and scary time."