Hollywood's Marketing Upheaval, Part One

2005’s shaping up to be a nasty year for Hollywood.

After a full summer of weekends with box office sales lower than 2004’s, film industry watchers and studio execs are now scrutinizing what exactly is keeping theater-goers (and DVD buyers) away.

Some have faulted the quality of this year’s films. Others criticize studio choices about timing and casting in major releases, such as the decision to shoehorn teen heartthrob Orlando Bloom into the R-rated “Kingdom of Heaven.” Still more poo-poo the poo-poo-ers, saying 2005’s turnout only looks bad in comparison with last year’s outstanding box office hits, which included “The Passion of the Christ,” “Harry Potter and the Prisoner of Azkaban” and “Return of the King.”

And of course, marketers are taking licks. Variety editor-in-chief Peter Bart has called promoting films the toughest job in show business. Hollywood marketers never get the credit when a film does well, he says, but they always get the blame when it fails.

In this case, some of the blame may be deserved. Confusion reigns about whether studios and their agencies have over-relied on old marketing strategies, not responding quickly enough to changes in media consumption. Is the pace of change adequate? Are creative strategies stagnant? How should film marketers be using the Web anyway?

A War Between Small Screens

“Some of the blame has to do with overly rambunctious TV advertising,” said Ian Schafer, who heads interactive agency Deep Focus. “Frequent movie-goers make up about 28 percent of the U.S. population. These are people who go to the movies at least once a month, people who make or beak an opening weekend. If you’re spending all that money on television, that’s very untargeted advertising, especially considering a frequent TV viewer is unlikely to go to the movies. This puts more targeted media like the Internet in a strong position.”

TV still draws the lion’s share of ad spending from Hollywood, while the Internet pulls in around 3 to 6 percent of budgets. JupiterResearch analyst David Card says that split isn’t necessarily shortchanging the Web.

“I think spending money on TV makes perfectly good sense,” said Card. “TV is tough, because the audience is fragmenting. But the best way to get butts in seats is to show a trailer, and TV [is a good environment for that].”

This summer’s slumping box office numbers won’t immediately catapult interactive to the fore, say the studio marketers we spoke with for this story. But it’s making an ascent all the same, they agreed.

“Four, five, six percent of marketing budgets are going to interactive,” said one marketing exec who asked not to be identified. “And that’s up from zero. People say, ‘Shouldn’t it be more?’ but I for one would rather have us prove our case than just throw a lot of money at it.”

“I don’t see any sense of panic about this year,” he added. “I feel like the panic has been bigger in the media than it’s been in the studios. Nonetheless, everybody is looking at alternative strategies. Attention and budgets for interactive stuff are definitely growing, and growing steadily.”

To an extent, studios’ ad spending capabilities online are limited by a lack of video inventory. But they’re finding ways to increase that inventory, through things like in-page video advertising, behavioral targeting and viral marketing efforts.

Viral and Publicity

From 1999’s buzz campaign for “The Blair Witch Project” through unique viral executions for 2005’s “Wedding Crashers,” the Internet already has an illustrious history of buzz and viral marketing successes.

This used to be called publicity. The Web has been host to some great film publicity successes, including for Peter Jacksons’ “Lord of the Rings” franchise, and the “Star Wars” trilogy.

Some of the online action has been centered at consumer generated media (CGM) sites like MySpace.com and Friendster. On Friendster in particular, films have often been integrated with content in unique deals. For instance, the social network arranged a pre-screening of Wes Anderson’s “The Life Aquatic” for users who evinced a passion for the films of Anderson and for actor Bill Murray, who stars. Such a buzz marketing strategy is similar to what’s being done in the CPG vertical through players like Procter & Gamble’s Tremor unit and BzzAgent.

“That’s one thing the Web is great for: identifying passionate fans and [reaching out to them],” said Jupiter’s Card.

To promote its 2006 film “Poseidon,” Warner Brothers is now distributing raw video shot on set to various film-focused Web sites in hopes of stirring up excitement. Among other sequences, the virtually unedited clips show director Wolfgang Petersen framing up shots, and actor Kurt Russell chatting with a crew member, his face bruised with makeup and his shirt covered in fake blood.

Such material is cheap to produce, and online audiences are eager for it. Of course, you never know what kind of response you’re going to get, but the risk is minimal since there are no media costs. As the anonymous studio exec put it: “At its best, viral stuff is transgressive and subversive. Every time I spend $20,000 or $40,000 on a viral, I might get worlds of attention, or I might get none.”

The biggest online viral hit in recent film history has to be the Wedding Crashers “Crash the Trailer” viral promotion, which many have praised as a perfect merging of message and medium. The effort encouraged site visitors to upload photos of themselves, their friends or whomever, which would then appear over the actors’ faces.

“Once in a while you’ll get something like the Wedding Crashers trailer,” said Schafer. “It gets more people to see the trailer and interact with it in a way they’ve never been able to before.”

A company called House Party is trying to use the online medium to take this kind of passion into the real world. It sets up pre-screenings in private homes and helps people throw parties to support them. Users invite friends to parties via an Evite-style interface, then attendees upload pictures and impressions after the bash. The offering is geared specifically toward DVD releases, which draw an ever-bigger share of sales.

“We’re not involved in the major promotion that happens when the box office hits,” said CEO Gene DeRose. “You have to work the word of mouth… and be productive over the whole cycle of the release. The film industry isn’t nearly as corporate as, say, television. It’s a promo approach.”

But an issue with buzz marketing in any vertical is that it only tends to work for high-quality products, warns DeRose. In other words, studio marketers beware: bad film equals bad buzz.

This is part one of a two-part story. Read part two.