LOS ANGELES (AdAge.com) -- For almost two years, "Paranormal Activity" quietly maintained modern-day cult movie status, traveling from film festivals to the occasional midnight screening in a college town for anyone who wanted to see -- and scream at -- the ultralow-budget horror thriller.

But after Paramount Pictures picked up the $15,000 film from corporate sibling DreamWorks last summer, it was time to redefine what "cult" could mean in the digital age of 2009. Paramount teamed with Eventful, a user-generated event marketing site, for a first-of-its-kind "Demand It" campaign in which movie fans could "demand" the movie come to their hometown. If the film got 1 million demands, Paramount promised, the studio would roll out the film nationwide to all the markets that asked for it. The studio reached that lofty goal in less than a week.

The result? A no-budget movie with nary a trailer or large-scale TV campaign to its credit grosses $107.9 million and becomes the most profitable movie in Paramount's history. But it also created a new kind of direct marketing for movie studios and brand marketers: Rather than having a wide release or product-launch strategy, why not invert the funnel, democratize the process and let consumers tell you where to go first?

"Winning over your fans and letting them feel included in the process is instrumental in the marketing of any film, it's just a matter of how far you take that notion," said Amy Powell, Paramount's exec VP-interactive marketing strategy and production. "The notion of virtually shaking hands with each and every one of your fans is an incredibly intimidating one. For a long time, movie marketing was a mass-market approach that wasn't personalized -- there was no thank you."

Not only were fans rewarded through Eventful, they could also interact through Facebook and Twitter, which did a lot more heavy lifting for the film's marketing than any 30-second spot could do -- although all TV and online ads included links to the film's Demand It page. Ms. Powell and Paramount's theatrical marketing team hosted a series of select early screenings in Austin, Texas, and at Hollywood's ArcLight Theater for the primary purpose of encouraging moviegoers to tweet their experiences afterward and create a trending topic when few other conversation pieces were likely to break through the late-night clutter.

Embracing an audience
"This whole idea that all these people were on Twitter at 2:30 in the morning was way more exciting than the middle of the day," she said. "For a long time Twitter was just a buzzword for more-traditional marketers, but I think this film articulated in a tangible way the importance of how big that audience could be and how vocal they can be when you embrace them as your allies."

For San Diego-based Eventful, "Paranormal" also proved the company could do for movie studios what it already does for the concert industry by helping musicians and comedians schedule their tours. Dane Cook, for example, recently partnered with Eventful to pick locations for his 25-city tour and received more than 600,000 demands.

To date, the "Paranormal" campaign has been the most successful in Eventful's history, said CEO Jordan Glazier, and has already prompted other studios like Sony, the Weinstein Co. and Roadside Attractions for similar alternatives to their release patterns.

"The lesson there is engaging your audience as part of the process before you even roll [your product] out gives them a sense of ownership, and helps you identify who your early adopters are," Mr. Glazier said. "Passionate consumers who are able to self-identify themselves in a matter of a product or service being available to them are a marketer's dream."

The partnership was also a big boon to Paramount's marketing budget, as the traditional media campaign cost the studio less than $20 million to execute far from the $60 million to $80 million rollout most big-budget films receive. Eventful also sold Paramount a guaranteed 50,000 impressions through the Demand It campaign, a number that was far exceeded in a matter of hours after the campaign launch.

Rewarding fans
That's why the formula could be replicable in the near future. Paramount is already fast-tracking a sequel, "Paranormal Activity 2," for release around Halloween 2010, details of which are sparse. But Ms. Powell expects fans to play a similar hands-on role in the film's marketing.

Paramount and Eventful have already rewarded the movie's fans in the DVD release by giving them the opportunity to have their name listed in the ending credits. Paramount gave the 1 million demanders a 24-hour window to reply with the permission to include their name on the DVD, expecting maybe 500 fans to respond within the short time frame. Instead, 170,000 replied -- a nearly 20% response rate.

"It suddenly became a problem of adding names," Ms. Powell said. "We had to have 10 names go by every tenth of a second -- but it was great they could feel included in the process."

Scaring up audiences

SPEAK TO THE INTERESTED
Leverage social media to cede control to your target consumer and let them market your product for you.

EXPERIMENT
If there's little financial barriers to entry -- i.e. a $15,000-budgeted product -- have fun and take risks.

PERSONALIZE THE MARKETING PROCESS
Make sure consumers feel included and like they're contributing to a greater goal or finished product, and reward them for their efforts.

DON'T CREATE FALSE HYPE
While "The Blair Witch Project" took a similar low-budget, home-movie approach to horror, it tricked consumers into thinking it was something that it was not: a documentary. "Paranormal Activity" never pretended to be anything but a slickly executed suspense film, and consumers paid for the shared theatrical experience.