Sample Book Chapters

Chapter 3 - Paid Advertising

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    Film distributors sense they are overspending but can’t quite figure out where, which makes them reluctant to institute cuts. The main culprit is broadcast network advertising, where audience shares get smaller because cable channels fragment television viewing, yet network ad rates increase.
    Ad campaigns usually are framed in terms of prerelease launch, which is the 3-week period leading into and through opening weekend. For major studio films, this generally involves $15–$35 million in advertising, of which 80% is allocated to television (broadcast, cable, and television syndication).
    For independent films, the range for prerelease campaigns runs from tens of thousands of dollars to $15 million but typically is in the low single-digit millions for mainstream indie films. The longer an ad campaign runs, the more its media spend will tilt toward newspapers because of the need to place ads containing specific theater playdates.
    “There’s no client that’s as demanding as a movie account,” said Roger Schaffner, president of Palisades Media Group, which is a media buyer in Santa Monica, California, whose clients include film distributors. “Every day, you are looking at the tracking research. You could learn that, hey, men are buying into this romantic comedy movie, so you’ve got to start advertising to men. This means that we need advertising creative that will appeal to men. So we ask, when will this be ready so we can start buying advertising targeting men? That’s just one example of what could happen.”
    Hollywood media buying practices got a black eye in a Federal Trade Commission (FTC) report in 2000, which documented examples of advertising for films with restrictive ratings aimed at inappropriately young audiences. A fourth follow-up FTC report in July 2004 indicated film industry practices “continue to improve,” but the FTC still identified some breaches.
    The original report in 2000 was highly critical and prompted the industry to enact reforms. “Clearly there were times during the period discussed in the FTC report where we allowed competitive zeal to overwhelm sound judgment and appropriate standards in the marketing of some of our R-rated films,” Robert Iger, (then) president and chief operating officer of the Walt Disney Co., testified before a United States Senate hearing in 2000. The R rating restricts children under age 17 unless they are accompanied by a parent or adult guardian.
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Note: Book passages and tables are updated where appropriate, and some bridge text may be added to smooth transitions in the accompanying excerpt.

TABLE: Major Studio Spending on Prints and Advertising 1983–2003

Year    Prints    Advertising    Total P&A

2006    n/a            n/a            $34.5

2005    n/a            n/a            $36.1

2004    n/a            n/a            $34.8

2003    $4.21        $34.84        $39.5

2002    $3.31        $27.31        $30.62

2001    $3.73        $27.28        $31.01

2000    $3.30        $24.00        $27.30

1999    $3.13        $21.40        $24.53

1993    $1.94        $12.13        $14.07

 1983    $1.02        $4.18          $5.20

Note: All figures in millions. Figures cover United States only. Prints are release prints used by theaters. Advertising category also includes costs of publicity, movie trailers, and creating marketing materials.

Source: Motion Picture Association of America

TABLE: Major Studio Marketing Cost By Media (%)

Year  $ mil.   

Nwsp/NetTV/SpotTV/Web/Trailer/Oth.med/Non-med          

2006   $30.71   

10.8% 21.2% 13.9% 3.7% 4.3% 24.4% 21.6%

2005   $32.35   

12.7% 23.1% 12.8% 2.6% 4.4% 22.4% 22.0%

2004   $30.96   

12.9% 23.0% 13.2% 2.4% 7.6% 22.2% 18.9%

2003   $34.34   

14.0% 23.0% 15.6% 1.4% 4.5% 21.9% 19.5%

2002   $27.13   

13.6% 22.8% 17.5% 0.9% 4.6% 21.7% 18.8%

SOURCE: MPAA