Upfront 07

Coming This Upfront: Lots of Movie Money

As Studios Look to Make Splash, Nets Welcome Ads That Keep Viewers in Seats

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NEW YORK (AdAge.com) -- "Spider-Man 3" broke all sorts of movie records -- highest opening theater count (4,252 screens), biggest opening-weekend tally ($148 million, besting the $135.6 hauled in by "Pirates of the Caribbean 2") and largest combined marketing and production budget ($400 million). But Spidey is only the first mega-blockbuster in a summer that could top 2004's boffo take of $3.95 billion with sequels to "Shrek," "Pirates" and "Harry Potter" also on the horizon. All of which adds up to this: Movie advertising is one of the categories networks are banking on in this year's upfront.
Record breaker: 'Spider-Man 3' snagged $148 million on opening weekend.
Record breaker: 'Spider-Man 3' snagged $148 million on opening weekend.

Karen Hunt, global managing director for Universal McCann, manages the Sony account that includes "Spider-Man 3." She said the upfront has traditionally been a good time to secure coveted inventory and advantageous rates for her client's films, but each studio tends to take a different approach. "They all have a major product to sell, so they'll probably spend more in the upfront. Even if their movies move throughout the year, you can really negotiate flexibility."

Marketing boom
As box-office receipts pile up, so does the studio marketing. National and local spot TV saw a 16.9% increase in 2006, adding up to $379 million in spending by movie marketers, according to TNS Media Intelligence and the Television Advertising Bureau. While more studios are turning to internet marketing, network and spot TV still accounted for 36.1% of a typical movie's marketing budget in 2005, according to eMarketer, with online getting just 2.4%. And with the swing toward commercial ratings, networks are eager to keep movies in their ad mix, given that movie ads tend to keep viewers in their seats more than other types of ads.

The most significant new growth for movies as a TV ad category is their use as an engagement tool, which A&E was able to exploit to great effect through its partnership with Paramount for its $2.5 million-an-episode acquisition of "The Sopranos" in January. Other cable networks have also been able to partner with studios on "pod-busting" commercial breaks using movie ads and trailers as a solution to the engagement equation. MTV turned to Universal's June comedy "Knocked Up" as the first sponsor for its programmed pods on Thursday nights, while FX and TNT both did extensive on-air promotions with Weinstein Co.'s "Grindhouse" in April.

NBC even got in on the act when it devoted seven minutes of programming time to exclusive footage from "Spider-Man 3" during the April 23 episode of "Heroes."

TV's quick reach
What the networks have offered movies is the ability to build buzz quickly, said Geoff Robison, senior VP-national broadcast for Palisades Media Group. "You have to go from zero to 85% or 90% awareness in three weeks. That's why studios aren't going to be bailing out of national TV anytime soon; they need really fast reach."

Because of that, an increased reliance on commercial ratings could make movie ads more top of mind. "Now that there's an audience advertisers are going to be paying for, moving into the future, movie advertising could get more preferential treatment," said Rino Scanzoni, chief investment officer for Group M. "They're probably the category that does the most research in terms of how a movie will fare, and have more flexibility in terms of adjusting spending and reorganizing to adjust to the core target."

Mr. Scanzoni added that the upfront is really just a "futures market," and the shifting of spending "has more to do with what people expect avails and pricing to be than actual budget growth."
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