Movie Marketing

A Report submitted in partial fulfilment of the requirements for the award of Master of Science of the Loughborough University.

November 2004

ABSTRACT

This report was initiated in response to a case study by David Jobber (2004) regarding the 'Promotional Mix Methods' used in Movie Marketing.

Through both qualitative and quantitative research methods this report has discussed the key factors in the launching of a movie successfully, the efficiency and cost effectiveness of the different promotional vehicles used in the launching of blockbuster movies, the role of critics in movie marketing, the reasons for the investment in movie product placement, as well as the associated risks of such placements.

This report has established that there is no universal formula that can guarantee the success of a new movie release. Each movie is unique and requires a tailored marketing strategy to promote its unique selling point to its target audience within the confines of its budget.

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Product Placement (album)

Marketers will utilise a blend of promotional vehicles to create awareness of movie releases, of which, television advertisements, cinema trailers and news stories are held to be the minimum prerequisites. Movie critics can then influence a movie's success or act as a valuable barometer in predicting its likely success.

Product Placement (PP) is a technique of subliminal marketing. Firms use PP more in conjunction with movies due to the financial benefits that they are able to reap from the association of their brands with glamorous stars or the latest blockbuster movie. It is identified that while this technique does minimise the saturation of the advertising medium, it does have various opportunity costs.

The level of revenue generated is arguably then the greatest key performance indicator in measuring the success of each movie marketing strategy employed for a particular campaign.

TABLE OF CONTENTS

Abstract

Table of Contents

List of Tables i

1.0 Introduction 1

2.0 Key Factors in the Successful Launch of a Movie 1

2.1 The Audience 1

2.2 The Unique Selling Point (USP) 1

2.3 The Budget 2

3.0 Promotional Vehicles 2

4.0 Role of Movie Critics 4

5.0 Product Placement (PP) 5

5.1 Reasons for Investment 6

5.2 Financial Benefits 6

5.3 Other Benefits 6

5.4 The Future of Product Placement (PP) 7

6.0 Product Placement (PP) Risks 7

6.1 Movie Failure 7

6.2 Lack of Prominence 7

6.3 Audience 7

6.4 Loss of Control 7

6.5 Ethical Issues 8

6.6 Risks to the Movie Studio 8

7.0 Conclusion 8

8.0 Footnotes 9

9.0 References 10

10.0 Bibliography 11

11.0 Appendices 13

11.1 Appendix 'A' - Assessment of Promotional Vehicles 13

11.1.1 Assessment of Advertising Vehicles 13

11.1.2 Assessment of Public Relations Vehicles 15

11.2 Appendix 'B' - Analysis of Promotional Vehicles 17

LIST OF TABLES

Number Description Page

1 Assessment of Advertising Vehicles 3

2 Assessment of Public Relations Vehicles 3

1.0 Introduction

Movie Marketing is a process that functions inversely to the traditional marketing framework. Traditional marketing is based on the mechanism of delivering consumer satisfaction at a profit. Movie marketing partially conflicts with this concept, as movies are not primarily produced to satisfy market demand. While there are movies of a similar genre, marketing strategies are tailored for each movie to draw out their unique selling points in order to market them to the largest possible audience. Hence, movies are not necessarily made just to deliver satisfaction, but are designed for many reasons one of which is to make a profit. They aim to elicit this profit through effective marketing campaigns.

2.0 Key Factors in the Successful Launch of a Movie

Launching a movie into the market is similar to that of launching any other new product, in that the public need to be made aware of its existence. The distributors role is to promote the film to as wide an audience as possible in order to maximise its potential chances of success at the box office and through merchandising (Ball, 1999). The movie needs to be a success when it opens, as re-released movies (e.g. Disney productions) are haunted by the performance of their initial release. The prospective audience's decision to see a movie at the cinema is based on the strength of what they have heard or read about the movie. Therefore, the marketing campaign must persuade as many people as possible that they will enjoy the movie.

According to Ball (1999), the key factors in a marketing campaign typically include: Audience, Unique Selling Point (USP) and Budget.

2.1 The Audience

Promoters need to advertise the movie to as many people as possible. The target audience will be based on a number of factors including the certificate of the movie and the genre. The financial advisors may believe that the movie would be a greater success, "creating revenue," if the movie content was changed so that the certificate can be lowered, making the movie accessible to a larger audience. This may adversely affect the quality of the movie or reduce ratings because the critics may say that, 'this movie could have been better if they had made if for an older audience!' This may affect the success of the movie. The marketers need to decide which groups the movie would appeal to in order to identify their target audience for the marketing campaign. The marketing group should take into consideration the release date for the movie, so that it does not clash with another movie that is hoping to attract the same target audience (Ball, 1999).

2.2 The Unique Selling Point (USP)

The USP differentiates a movie from others of the same genre, as seen with the utilisation of posters and trailers. The marketing campaign should aim to give the public information about the genre, story and the stars of the film. This is to ensure that they comprehend the type of film they are going to view. It must stress the familiar aspects of the film, and highlight how it is different.

2.3 The Budget

The expenditure on marketing prior to the release at the cinema can affect the success of a film. The budget for the marketing campaign will be determined by how much the distributors hypothesise the movie will generate at the box office. Estimated budgets are obtained using calculations based on past movies of a similar type, but the determination of exact budgets is impossible due to the uniqueness of each movie. The production costs of a film averages $28million, while marketing expenditures increase this figure by 50%. 80% of marketing costs are incurred from media expenditures of which 75% takes place in the first week of the release. Thus, $11.2million is spent on media and $8.4million in the first week (www.advertising.utexas.edu, 15.10.2004). Factors influencing the budget may include the cast and crew of a film, location and date of the release.

3.0 Promotional Vehicles

Movie studios use various promotional vehicles available when marketing a movie, from the mainstream movie trailer to the lesser known movie Gala Premieres. Promotional vehicles can be classified under two distinctive headings: (i) Advertising and (ii) Public Relations.

Advertising is defined as any coverage within the media (e.g. television, radio), which is paid for. Public Relations are activities that promote a favourable image of the movie to the public. Often the activities that generate the most publicity are free (e.g. media coverage of newsworthy celebrity stories with links to the film), but they also include film festivals, celebrity parties and award ceremonies where studios spend vast amounts of money in hosting events that are covered by the media for free.

Tables 1 and 2 analyse the essential or unavoidable promotional vehicles that movie studios use to promote today's blockbuster movies. A thorough analysis of the full range of promotional vehicles available in movie marketing has been carried out in Appendix A. The efficiency of each vehicle is considered in terms of the number of people whose awareness of the movie was significantly increased a day or so after being exposed to the promotional vehicle, against the number of people that were exposed to the promotional vehicle.

A rating/weighting matrix was constructed following the guidelines stipulated by Pugh (1991). The matrix reflects the findings in Tables 1 and 2. Marketing objectives were allocated weightings that each vehicle was assessed against. It was upon this premise that the assessments of each vehicle was made (see Appendix B).

Table 1 - Assessment of Advertising Vehicles

Vehicle Summary Advantages Disadvantages Efficiency Cost Effectiveness

Television

Short (approximately 30 seconds) movie trailer is broadcast during commercial breaks. Can cost upto $2m per slot1. -Large audience

-Reaches wide spectrum of people, not just avid movie goers.

-Ability to target specific groups. -Very expensive.

-No guarantee of captive audience. Low. Viewers tend not to pay attention to adverts. Only 23% of viewers recalled an advertised product one hour after a commercial was shown3. Low. High price and low efficiency. However, large audiences mean that a large amount of coverage is generated, which is essential to marketing effectively.

Cinema

A full (2 ÃÂ½ min) theatrical trailer shown in cinemas preceding the main feature. Can cost upto $600,0001 -Reaches target audience very efficiently, genre specific.

-Captive audience. -Often regarded as an annoyance.

-Public may object to advertising having paid to be in a cinema. Very high. Captive audience, 87% of movie-goers remembered a product advertised in the cinema one hour after an advert was shown.3 High. A full trailer can be costly to produce but it is shown for free in cinemas prior to a movie launch.

Posters / Billboards A strategic advertising campaign promoting the movie. Billboards and posters located in busy public areas, next to roads, in cinemas etc. -Poster location can be chosen to reflect the target audience

-Low production costs

-Costs can be reasonable depending upon location. -Prime locations can be expensive.

-Create audience awareness but limited scope to affect audience uncertainty. Low. Approximately 25% of people could recall 3 or more billboard advertising campaigns5. Poster adverts tend to be noticed, rather than sought out. Medium. Efficiency is low, but costs can also be fairly low, or in some cases (within cinema) free.

Table 2 - Assessment of Public Relations Vehicles

Vehicle Summary Advantages Disadvantages Efficiency Cost Effectiveness

News Stories Celebrity news stories involving cast members generate free publicity and build audience interest. Can generate huge media interest, therefore extensive free publicity -Limited control over broadcasts

- Negative publicity High. Popular media coverage on entertainment shows has significant appeal

Very High. Free coverage, and can generate massive publicity and hype.

Press Junkets 'Assembly line' publicity where cast members and director spend several days giving short interviews to journalists -Efficient medium for giving large media organisations direct access to stars

-Generates large amount of publicity

-High level of control for studio. -Journalists are often sceptical of these highly managed interviews

- High. Cast and crew interviews on popular entertainment programmes generates significant public awareness of the movie.

High. Relatively cheap to organise and can generate significant media coverage

It is clear that the promotional vehicles differ vastly in terms of their efficiency and cost-effectiveness. In particular, television advertising is very expensive and inefficient, giving it a poor cost effectiveness rating, but given the huge audiences that can be generated, it is the best medium for increasing public awareness of a movie. A movie studio must consider its promotional strategy wisely as there is no set formula guaranteed to work with every film. Certain prerequisites (e.g. television adverts, cinema trailers and news stories) must be used without fail to boost public awareness of the movie, after which additional promotional vehicles can be selected to develop an individual strategy.

4.0 Role of Movie Critics

The movie industry defines critics as:

'Persons employed by...media to screen movies and provide their

subjective views for the public's information' (Cones 1992).

It is recognised that critics play an important role in the success of a movie and have to be considered in the plans of a studio when marketing their film. Critics are a vehicle for getting a movie into the public domain. They raise awareness and advise potential viewing audiences through their informative opinions. The information provided can be negative or positive in nature, so it is vital to establish the level of impact that a critical review can have on the overall success of a movie. There are two contrasting concepts concerning the role of the critic in distinguishing their potential impact:

The 'Influencer' - an opinion leader that influences audiences and box office sales;

The 'Predictor' - represents audiences and has insignificant influence on box office sales.

The Influencer concept suggests that critics influence the box office, so that positive reviews will promote box office success, while negative reviews discourage success. It is implied that critics help consumers decide on their choice of film by reducing uncertainty about the quality of a film. According to Cones (1992), the view of critics as influencers is adopted by many studio executives that seek to gain favourable appraisal of their movies through a number of strategies: the wining and dining of critics at previews; bringing out the film's stars to meet the critics for interviews; or quoting critics, which enhances their reputation and encourages them to make favourable reviews. An expensive but effective approach is for studios to fly critics to premier locations (e.g. New York) for screenings of their latest release and presenting luxury gifts to ensure favourable reviews, from which the studio draws advertising blurbs with phrases such as "spectacular" and "edge-of-the-seat". However, if studios expect negative feedback, they could mitigate this by not inviting uncooperative critics or avoiding the preview concept entirely. The Influencer concept implies that it is more important to target critics than the actual movie-goers with their marketing campaigns.

The critic as a Predictor represents their audiences and has insignificant influence on box office sales. Critics' reviews primarily produce predictive information that has some influence with audiences, but ultimately attributes audiences' film selection to factors such as trailers, advertising and word-of-mouth. This concept concludes that the role of critics in movie marketing is insignificant as they can be undermined by other factors, and the strategies employed by movie studios to create positive reviews are wasteful investments (e.g. even if negative reviews are received, studios can still recoup their costs with opening weekend success that leads to positive word-of-mouth and long running success). Therefore, marketing should not be directed towards the critics but the public.

Research on the role of critics in movie marketing provides support and criticism for each concept. Copernicus (2000) claims that movie critic reviews have no impact on box office success. This study concluded that there was a negative relationship between critics recommendations and box office performance. It found that the movies which critics negatively reviewed were more likely to gain success, with approximately 40% of the films that were negatively reviewed gaining $75 million in terms of box office sales. Levene (1992) supported these conclusions, and unearthed a trend that critic reviews significantly correlated with late box office sales, and cumulative receipts. These findings cast doubt over critics as influencers as it emphasises that even the presence of poor reviews does not negate the possibility of movie success. This implies that critics may be less influential in persuading movie-goers to attend new releases compared to marketing and word-of-mouth, but as predictors they are valuable barometers for gauging the potential of a motion picture. Levene (1992) concluded that acting, plot, subject and word-of-mouth were the main influences for watching a movie, while positive critic reviews ranked at number ten.

Although current research on this subject may be inconclusive, a prominent trend is that, the correlation between critics influence and positive box office sales is unsubstantiated, which is in part due to the subjective nature of reviews. However, it is clear that the role of critics will certainly affect a company's marketing strategy. If critics are perceived to be influencers then studios will target them with their marketing campaigns, but if they are viewed as predictors then previews should be shown in advance for possible enhancement. The viewpoint taken will determine the appropriate marketing budget and positioning strategies for the movie.

5.0 Product Placement (PP)

The concept of PP is to blend a product into a story seamlessly (20th Century Fox, 1999). Marketers believe audiences will connect their brand with the glamorous stars or story they are seeing on the screen, making it feasible to reap the commercial benefits without the hard sell of a TV advertisement. PP can deliver a powerful, yet subtle impression. According to McQueen (1998), the benefits are gained via the "implied endorsement by a celebrity, and that is really valuable", as it "would be hard to get a Tom Hanks...to endorse your product at any price" (Farhi, 1998).

The ideology suggests that consumers have become saturated with traditional media advertising. PP is a medium that reaches consumers in an indirect fashion, as often they"...do not realise they are being marketed to", i.e. reducing the advertising clutter (www.onpoint-marketing.com, 15.10.2004).

5.1 Reasons for Investment

Marketers are primarily willing to invest vast sums in PP because "tangible benefits" accrue (FFPPI, 2004). The film ET (1982) heralded the arrival of this phenomenon through the placement of Reese's Pieces that earned the company producing the product a reported surge in sales of 70%. Hochbaum (2003) identified that while this concept is not new, the ubiquitous nature of this procedure is, contemporarily.

Such is the acceptance of this marketing strategy that PP became self-referential in the movie Wayne's World (1992) (www.businessweek.com, 15.10.2004). Other beneficiaries include Red Stripe Beer who received a 50% increase in sales that led to $63million worth of investment from Guinness Brewing Worldwide, following its placement in The Firm (1993) (www.businessweek.com, 15.10.2004). Such has been the impact of placements that "companies are now spending more money on sponsorship than on traditional TV advertising" (Ibid).

5.2 Financial Benefits

There are multifarious reasons for the financial successes of PP:

Movies enjoy a global reach through expanding distribution channels;

The longevity of the investment, i.e. despite an initial payment, you enjoy the benefits of the theatrical release and numerous ancillary markets (e.g. video/DVD sales and rentals). Each component of the package enhances the reach and exposure of the product.

"Product placement is imbedded within the film and travels with it. As long as people continue to view the film, the placement continues to receive exposure. PP...is forever" (www.advertising.utexas.edu, 15.10.2004). The promise of "forever" for a single payment is a recipe for value that marketers cannot refuse.

5.3 Other Benefits

High profile campaigns create interest at no extra cost to the marketer;

Successful movies have an Return on Investment (ROI) on a positive placement that is arguably unsurpassed;

Movies are the "optimum viewing experience" that have a captive audience in a superior sense to other forms of entertainment (www.advertising,utexas.edu, 15.10.2004);

Home movie watching retains audience attention to a superior extent, allowing placement marketers to monitor the recipients of their placements more effectively.

5.4 The Future of PP

UK Television Networks are introducing 'ad-skipping' technology that is becoming widely available. Even if TV companies utilise this technology, products placed in movies will be immune to these developments due to their entrenched nature. Therefore, the vast sums of money marketers invest in movie PP, are justified by the ROI enjoyed (by the successes), demonstrating the economical nature of this marketing strategy.

6.0 Product Placement (PP) Risks

According to the research of David Jobber (2004), there are risks associated with the use of PP in movies:

6.1 Movie Failure

While the intent of PP in movies is to create a benefit from a positive association with a successful movie, if a brand is placed in a movie that turns out to be unpopular, then the brand may become tarnished through association with this movie.

6.2 Lack of Prominence

Although a company may pay a lot of money for their brand to feature in a movie, it is usually under the director's discretion where the brand features. A brand name may be visible for only a few seconds throughout an entire movie, or may feature in a scene that distracts the viewer from the presence of the brand. Thus, a cost-benefit analysis may prove that the PP investment may have come at a great opportunity cost.

6.3 Audience

PP is ideally an art that movie viewers should be unaware of, as the message should be subliminal. If movies go out of their way to advertise a product it may aggravate audiences, who in turn may develop a dislike for the product.

6.4 Loss of Control

Control over how a brand is portrayed is reduced by the presence of editors and directors in the industry. There is an opportunity cost of not using standard advertisements (e.g. billboards) where the brand owner can have greater control over the portrayal of their product. The marketer has the unenviable task of considering the potential of negativity of the film as a whole, the scene in which the placement is to occur and whether the character associated with the product is acceptable with their actions in relation to the product (www.advertising.utexas.edu, 2004)

6.5 Ethical Issues

This concerns the power of PP and the negative effects it can have on audiences. This promotes the concept of a 'corporate conscience' in that firms should not seek to advertise to the detriment of society. Such issues include:

Promoting Anti-Social Behaviour. If movies have popular actors promoting dangerous behaviour as an accepted form of entertainment, impressionable viewers may try to replicate their actions, as seen with the television series 'Jackass'. There is also the concept that 'violence breeds violence', i.e. if people see cult stars fighting in movies while wearing a certain brand item, this may generate a consensus that this destructive behaviour is acceptable.

Third Party Endorsements. If movie stars endorse products throughout movies that are not in the interests of the audience's welfare (e.g. Tom Cruise chain-smoking cigarettes) this may encourage irregular consumption of such products, which could inadvertently damage the health of consumer groups that are victims of 'classic conditioning'.

6.6 Risks to the Movie Studio

Critics highlight the degeneration of the artistic integrity of film as the most detrimental aspect of PP, e.g. the excessive placements in the James Bond movie Tomorrow Never Dies led to the New York Times (2004) commenting that "...the world's top-secret agent has lent his name to more gadgets than Tiger Woods...and strayed recklessly from Ian Fleming's legendary blueprint".

Attaining the delicate balance between adequate exposure and artistic integrity is difficult to achieve. The main challenge is to ensure that the placement appears natural and prevents further saturation advertising.

7.0 Conclusion

There is no universal formula that can guarantee the success of a new movie release. Each movie is unique and requires a tailored marketing strategy to promote its unique selling point to its target audience within the confines of its budget. Marketers will utilise a blend of promotional vehicles to create awareness of the movie in order to maximise its chances of success. The level of revenue generated is then seen as the key performance indicator of the success of each marketing strategy.

FOOTNOTES

The following footnotes refer to the references in Tables 1 and 2 (page 3):

1. Carrol, C. (2002) Movie Marketing: How Studios Make and Spend Fortunes, Creating Hype for their Blockbusters. In Jobber, D. (2004) Principles and Practice of Marketing (4th Edtion). pp 626. London:McGraw-Hill

2. http://www.learnaboutmovieposters.com/NewSite/INDEX/ARTICLES/featurette.asp [Accessed 02.11.2004]

3. Johnson, G (1998). Los Angeles Times

4. TV & radio: return on investment http://www.fipp.com/1310 [Accessed 06.11.2004]

5. http://www.lindstrand.co.uk/marketing.html [Accessed 06.11.2004]

REFERENCES

Ball (1999) 'The Mummy: A Study Guide for Students of Media Studies'. ÃÂ© Film Education

Cones, J.W. (1992), Film Finance and Distribution: A Dictionary of Terms, Hollywood, CA: Silman-James Press

Copernicus (1999) cited in Film Critics: Influencers or Predictors? University of Pennsylvania and University of Florida. By Eliashberg, J and Shugan, Steven M. (1999)

Farhi, P (1998) AOL Gets Its Message Out in Mail. WWW.washingtonpost.com (17.10.2004)

FFPPI , The Feature Film Product Placement Industry. WWW.advertising.utexas.edu (20.10 2004).

Hassid, Dan (2004) 'Gimme a Bud! The Feature Film Product Placement Industry'. Www.advertising.utexas.edu/research/papers (20.10.2004)

Hochbaum, L. (2003) Product Placement: Creatively Rich Yet Discreet. Movie Video Age International. WWW.videoageinternational.com (15.10.2004).

Jobber, David (2004) Principles and Practice of Marketing, (pp. 593-631) 4th Edition. The McGraw-Hill Companies.

Levene, C. (1992), Marketing Art-Films to College Students, Working paper, The Wharton School, University of Pennsylvania.

McQueen, Ian (2004) ISM Marketing. 'Gimme a Bud! The Feature Film Product Placement Industry'. Www.advertising.utexas.edu/research/papers (20.10.2004)

Mezzatesta, Gary (2004) UPP Entertainment Marketing. 'Gimme a Bud! The Feature Film Product Placement Industry'. Www.advertising.utexas.edu/research/papers (20.10.2004)

Pugh, Stuart (1991) 'Total Design: Integrated Methods for Successful Product Engineering'. Addison-Wesley Publishers Limited.

Smith, Randy (2004) Senior Marketing Manager at TriStar Pictures. 'Gimme a Bud! The Feature Film Product Placement Industry'. Www.advertising.utexas.edu/research/papers (20.10.2004)

The New York Times (20.10.2004) cited on:

http://www.advertising.utexas.edu/research/papers/Turcotte/bencorpamer.html (15.10.2004)

Twentieth Century Fox (1999) 'Gimme a Bud! The Feature Film Product Placement Industry'. Www.advertising.utexas.edu/research/papers (20.10.2004)

http://www.advertising.utexas.edu/research/papers/Turcotte/bencorpamer.html (15.10.2004)

http://www.business week.com/1998/25/b3583062.htm (15.10.2004)

http://www.onpoint-marketing.com/product-placement.htm (15.10.2004)

http://www.videoageinternational.com/2003/articles/march/product.htm (15.10.2004)

BIBLIOGRAPHY

Ball (1999) 'The Mummy: A Study Guide for Students of Media Studies'. ÃÂ© Film Education

Cones, J.W. (1992), Film Finance and Distribution: A Dictionary of Terms, Hollywood, CA: Silman-James Press

Copernicus (2000), What is the full reference for this item? - Ask Glen!!

Eliashberg, Jehoshua and Shugan, Steven M. (1999) Film Critics: Influencers or Predictors? University of Pennsylvania and University of Florida.