A Look at Where Movie-Marketing Dollars Have Gone

Also: Execs Weigh in on the Challenges Facing Film Studios and Media Owners in Fragmented Landscape

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LOS ANGELES (AdAge.com) -- Especially during the summer, it often feels like there isn't a single piece of media, measured or otherwise, that's not promoting a movie. So it's easy to look at the movie industry's spending figures from first half of 2010 and think, "Where did all the money go?"

Hollywood spent 6.6% less on measured media during the first two quarters of the year, shelling out $1.72 billion vs. last year's $1.84 billion, according to Kantar Media. Among the most notable shifts? A 20% boost in outdoor spending ($58.9 million vs. $48.9 million in 2009), a small increase in national spot radio ($16.4 million vs. $14.6 million) and a slight uptick in digital ($71.4 million vs. $69.9 million).

'Twilight: Eclipse', released this summer.
'Twilight: Eclipse', released this summer.
But most surprising is a series of cuts in TV spending, with network ($697 million vs. $720.3 million), spot ($79.6 million vs. $94.2 million) and even cable ($413.8 million vs. $426.5 million) all posting decreases during the period. Considering studios spend 70% to 75% of their budget on TV for an average wide release, shifting a couple million into other media may seem like chump change.

But moviegoers are a tech-savvy lot, and more than 66% of them do not watch their TV programming live but time-shifted on DVRs, according to the Moviegoers 2010 study from entertainment marketing firm Stradella Road. And with eMarketer projecting DVR penetration to reach 34.8% of U.S. households and 42% of homes to be video-on-demand-enabled in 2010 -- not to mention the rise of streaming-video platforms such as Hulu, Netflix and iTunes -- it's more difficult than ever for movie marketers to be sure their ads are being seen by the time the opening weekend rolls around.

"We've been battling quick-reach media for years. When prime time was the way for us to grab big-reach figures very quickly, it was easy to launch a movie or a product. Now you'd have to buy 600 commercials on cable TV just to reach 50% of your target ," said Steve Farella, CEO of independent media agency TargetCast TCM. "Even if you applied that to broadcast prime time, you're still buying 100 to 150 commercials just to reach 50% of your target . You can't do that overnight."

For many studios, that means changing up where their money is spent on TV and making other media work harder.

"You do one of two things: build event status awareness for films by buying television advertising or sponsorships somewhere that has a low [DVR] playback rate, like live sporting events, or create an ad that is unexpected and original enough to break through the clutter on-air and/or be spread virally online," said Erika Schimik, senior VP-media and research for Lionsgate.

Studios have also been experimenting with their TV ads to make them more DVR-proof, whether it's framing them with black bars so that viewers know it's a movie ad, doubling the number of seconds the title is displayed so it's still seen during fast-forwarding, or buying the first and last segments in commercial pods.

One studio marketer, however, suggested that the decrease in TV spending was not due to shifts to other media as much as it was to a decline in overall releases -- an estimated 59 major films were released in the first half of 2010 compared to 67 in 2009, a 12% drop-off. And the increases in radio and outdoor spending were largely due to the time period's higher volume of sequels and franchise films, which have built-in fan bases and are therefore easier to market through quick messaging.

"In the final days leading up the release you still need a lot of TV. You could double your online budget but still be nowhere where TV spending is," the executive said.

Hollywood had a banner year at the box office in 2009, and even as box-office receipts continue to increase on a year-to-date basis due to inflated ticket prices and pricey 3-D releases, attendance was off by 2.5% during the critical summer-movie season through Aug. 14, a sign that consumers are still fickle when it comes to hitting the theater.

What movie-marketing execs are saying

Madison & Vine spoke with executives from across the movie-marketing spectrum on the buying, selling and client sides to take a broader look at where movie spending is going in a post-DVR, post-Twitter universe. Here are some excerpts from our conversations.

Nancy Kirkpatrick, president of worldwide marketing, Summit Entertainment ("Twilight," "Letters to Juliet")
"Overall TV is still king. Over 50% of moviegoers are saying that's why they go to the movies. We spend lot of time on integrations and trying to make sure our advertising is really integrated into the program in some way, whether you've got the cast doing interstitials or footage is cut into the promo spots for the network. We're trying to find more inventive ways for movies to be on TV, and cherry-picking the audience and being specific about who you are reaching instead of being broad. There is no 'Ed Sullivan Show' anymore, unfortunately."

Keith Richman, CEO, Break Media (Break.com, HolyTaco.com)
"The challenge for us as a publisher is twofold. Clearly movie marketers believe in sight-sound-and-motion as a part of their strategy, so how do you offer what they're used to getting? The home-page takeover, whether it's on our site or multiple sites in a lot of ways is our version of Thursday night. It's more competitive to buy a home-page takeover on our properties than it is on network television. It's become a staple of ours and lot of other publishers lately. Movies are our most high-impact and high-performing ads, with click-through-rates for home-page takeovers north of 2%. The trailers tend to do really well with far-above average engagement, but that's because studios give you a lot more leeway than traditional marketers."

Erika Schimik, senior VP-media and research, Lionsgate ("The Expendables," "The Last Exorcism")
"There is no formula for [viral marketing] -- to be done right and really go viral, the audience has to feel in on the joke and not duped or used. In other words, the clutter buster can't be like witnessing a shotgun marriage -- the ad has to feel not only custom tailored to fit the movie but also but also organically fused to the media outlet you are partnering with. It's lightning in a bottle that Lionsgate has managed to capture several times this year, but there's no playbook to work from, by definition -- every film has its own unique set of challenges."

Steve Farella, CEO, TargetCast TCM
"Digital is everything. It's targeted when it needs to be targeted, it will blow your mind when it needs to build reach. A portal can reach 30% to 40% of your target in a day -- Yahoo, MSN, AOL -- if we let them loose and we buy them broadly we can launch a movie. YouTube or Hulu, Hulu's gonna be a lot more limited in reach but YouTube is anther perfect place to put it because there we can get people to see the trailer, see the characters and get involved before they get to the theater.

"What movie marketers need is video -- place-based video networks are perfect for movie marketing. There's been a shift on a part of all marketers to move money out of TV and compliment it with other media for different reasons. You get fast reach, more information, more video, more stories and more characters online."

Louis Carr, president, ad sales, BET Networks:
"What we're seeing is not that there's a real shift, there's more of an addition in regards to what is happening on air. Marketers are trying to be more supportive of what's on-air through online opportunities and sometimes mobile opportunities. Studios are asking us whatever we do on-air, how can we connect a digital component?

"For example, for Sony's "Takers," we interviewed T.I. on '106 & Park,' and prior to that sent out text blasts via mobile to check out T.I. on his interview about 'Takers.' We also ran a half-four special on air, had a micro-site for 'Takers' online, so if you looked at everything we did it was interconnected. More people are doing that. In what was such a bad year for all categories including movies, what we've seen in upfront allocations is we are up double digits in that particular category from 2009. They're our second-largest category. Now, one of our key challenges is to make studios understand that African-Americans see movies that don't have African-Americans as leads or costars. We go to all genres, whether it be love stories, animation, drama or action."

Gordon Paddison, founder, Stradella Road, entertainment-marketing consultancy:
"There has been absolute attention to reducing on a percentage basis marketing spends on an annual basis. When there are less films coming out you generally have more of an opportunity in the box office. What we had two to three years ago was six to eight films opening each weekend and they would be cannibalizing each other's demographic. Two R-rated comedies were definitely taking share away from each other in real time. Now you have one comedy targeting two or three demographics simultaneously.

"For driving awareness, TV is your first touch point, that's where most people identify learning of things first. The great thing about television is you can buy a decent scale and still be targeted. Online you gotta get pretty narrow with your targeting. If you wanna go broad with online it's really expensive -- just as expensive as TV. The methodology of opening-week spend and ensuring you're driving the right message to conversion has changed now that time-shifting has been introduced."

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