Hollywood Studios Drop Massive Amounts of Money on Advertising Movies to You

by on April 12, 2010

in Entertainment

Movie MarketingHave you ever wondered what studios spend on marketing movies to sway you to spend your money on their movies in the theaters?  Hollywood spends around $4 billion per year marketing to you and the movie goer in the United States spends almost $10 billion a year at the box office.

It seems simple enough to advertise a movie, yet advertising is designed through various factors of psychological marketing to seem appealing to some part of your mental makeup.  Whether it be through the use of colors, familiar or inspiring music (Like how Clash of the Titans ads sucked me in with their awesome music) or familiar themes in commercials, where product ads appeal to staying in touch with friends and family.

Elements of Marketing a Movie

All the elements of marketing come from years of study, learning what works with people on the psychological level.  I studied marketing to understand how to get my real estate website off the ground and through various techniques, it took less than a year to get it to the #1 spot in my field in less than a year.  But that was a combination of marketing and applicable SEO. (Search Engine Optimization.)

Elements of MarketingThat web site has come and gone (Like my real estate career) but I learned a lot from that experience and these days I can’t help but recognize elements of marketing being employed in every single television and print ad I come across. Aside from $4 billion a year being spent on marketing movies, $10 billion is spent on advertising food and beverages to America’s youth and in general, advertising and marketing, in 2008, was a $412 billion industry.  It’s that huge because of one reason…  it works.  Just about everything in your home has or had an ad made for it.

Yet DreamWorks‘ advertising for How To Train your Dragon was considered a failure of sorts and now DreamWorks is trying to figure out how to better market a project without spending as much.

The Internet is a Massive Movie Marketing Tool!

It’s obvious that with this day and age there are various new methods to market a movie.  Through internet platforms like YouTube, Twitter and um, well, websites run by fan-boys, movie geeks and folks with a business agenda, movies have a whole new world of exposure.  With web operators looking to eek out some form of a living from their websites, there are many win-win situations for everyone involved.  Fans find web sites that are in agreement with how they view the entertainment industry, advertisers have new venues of deploying their services and studios have free marketing.

Yet despite these obvious free internet avenues, the amount of money spent on advertising still has the most impact on earnings.  Weak movie openings affect the bottom line for the studios and hence, marketing is still a very important aspect for distributing movies.

Believe it or not, Hollywood cut spending last year by 8% and “only” spent a mere $4.39 billion.  In the case of How To Train Your Dragon, though they opened roughly $20 million under projection, they revamped their marketing.  And when you add the critical praise it received fan and entertainment news sites like ScreenRant, (Vic reviewed the movie and gave it a 4.5 out of 5! I happen to trust Vic’s perspectives on movies and that kind of opinion goes a long way towards if I will or will not venture out to see something.), the movie generated more awareness in the viewing public and more people suddenly became interested in it, helping the movie succeed.

Yet now a days, looking to save some money, some studios have combined their movie and DVD marketing groups into one group.  But there’s this internet thing out there that despite it’s obvious positive influence, has only recently been truly embraced by the entertainment industry.  A leading example of what redefined marketing could do was the indie movie Paranormal Activity.  Through various methods, Paranormal Activity pulled in $100 million via an internet demand marketing system.  The film only cost $15k to make.

YouTube, Facebook & Twitter are easy to use tools also.  Sony was one of the first movie studios to use Twitter and they did so marketing District 9.  Using YouTube where over 40 million web surfers end up each day is a great avenue to boot.  To be honest, I’m surprised they haven’t done this kind of marketing sooner.  Many of the fan and movie news sites that have sprung up in the last few years have taken to all these forms of self promotion and have done well doing it.  Any studio could have done their research and seen how some websites have become one of the top 100 sites amongst millions of sites.

The InternetAs a matter of fact, here are some numbers to drop your jaw about the internet.  There are…

  • up to 182 million websites
  • 25.21 billion web pages.
  • Over 1 trillion unique URL’s.

Yea, the web is growing just a tad, ready for the studios to take advantage of, but it takes a bit of work.  The reason you punch in a search question and a movie web site comes up first or is in the first page of results you see isn’t happenstance.  It’s there due to hard work and the steady application of that SEO thing again.  Yet despite the obvious nature of the web, some studios seem hesitant to use the web because some movies like Bruno didn’t pan out.  I don’t think Bruno didn’t pan out because the web failed it, but that’s a different subject all by itself.

As it is, studios think that TV advertising isn’t their most efficient use of funds.  Yet television commercials are considered to be the closest thing to viewing a movie preview in a theater, considering how much people are spending creating their home entertainment environments.  Heck, I’ve even upgraded my computer to blast the neighborhood with digital surround sound and it’s awesome!  But I have to disagree about TV not being the best use of their advertising money.

Why Is TV Not A Waste of Movie Marketing Money For Hollywood? Hellooo YouTube!

Web Movie MarketingOnce an ad hits TV, it ends up on YouTube.  So aside from say, 10 million viewers seeing an ad on TV one night, the ad hits YouTube, being accessible to 40 million daily visitors.  Then thousands of fan sites scramble to reload these TV trailers to their sites to help their sites generate web traffic.  Smaller sites then load those YouTube videos to their own websites for their own viewers, and also hoping to catch of piece of that massive web traffic pie.  Web traffic, that on more popular websites, can be accessed by up to 30k visitors a day.  I’m not sure how that’s a misguided use of TV advertising dollars when a month of exposure for an ad can accumulate an estimated 800 million potential web page views.  That’s slightly more than a night’s worth of television viewers for any program, no matter how popular it is.  Word of mouth does the rest, and the rolling snowball does its thing.

You know they say that you only see 10 to 12% of an iceberg above the surface. (Take a look at an ice cube and see for yourself!)  What I’ve touched on here is barely 1% of the entire equation and is only my opinion.  I’ve tried to dig up enough info to clarify that last paragraph and other factors that go into it.  If you sit back and start to just observe things around you, it’s a bit scary, but advertising is the bread and butter of EVERYTHING around you.  At least that’s my take on the subject.  Now you know!

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[THR, FTC, Intense Influence, The Wall Street Journal: Jan 2010*, Netcraft, WorldWideWebSizeGoogle Blog.]

*(My wife will be happy I’m throwing something away finally!)

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