News
More Debate on Cuts in Film Ad Spending
By Robert Marich
Commentary
April 9, 2010 – A Reuters story says Hollywood film distributors are stumbling with cut backs on marketing expenses and points to the soft opening of How to Train Your Dragon as an example.
I’ve read the story twice and don’t see how the info in the story backs up the premise. The article says DreamWorks Animation spent $160-175 million to market animated How to Train Your Dragon.
Wow! That’s a lot of money, even in Hollywood. There’s no discussion of that marketing expenditure, but I can say it’s the normal spend for a full-size global marketing push.
The Reuters article by Sue Zeidler says, “Hollywood cut ad spending by 8% to $4.39 billion in 2009 after trimming it by 3% in 2008, said Michael Nathanson of Bernstein Research. More cuts will come through the first half of 2010, he added.”
My observation: Because of the economic recession, advertising prices have slid, so it’s not surprising ad expenditures dropped. It is possible less money could buy more ads and larger audience, in this environment. Also, keep in mind box office—which is the revenue side of the equation—is booming rising by a high single digit and low double-digit percentage.
The Reuters article is provactive and worth reading, but some of its conclusions should be thought through carefully. For example, the article implies DreamWorks Animation changed the content of ads to emphasize the humor, compared to its first wave of ads. Okay, but that has nothing to do with ad spending levels. If audience tracking surveys show an ad campaign if falling flat with audiences, the content of ads are tweaked. That’s standard operation procedure.
As my book Marketing to Moviegoers notes, Hollywood executives have long decried the expense of marketing films, which on a global basis typically exceed production costs. But other than griping, not much changes. The single-digit percentage reductions in 2008 and 2009 ad spend by the movie industry are in line with other industries. So this is no surprise and not unusual.
Movies are like new products and each one needs to be brought to attention of audiences, which costs money.
For full text, click link below:
ca.reuters.com/article/entertainmentNews/idCATRE63768T20100408
www.marketingmovies.net/chapters/chapter-3-paid-advertising/
www.marketingmovies.net/news/studios-talk-up-marketing-cuts-again/