The Digital Marketing Revolution Is Coming (Guest Blog)

“Increasingly, tactics employing one-to-one marketing are being utilized — and the results can be extraordinary,” GoWatchIt CEO David Larkin tells TheWrap

Digital technology has transformed film production, whether by making possible the kinds of special effects that can make you think you’re watching a group of superheroes battling a renegade God in the “Avengers,” or by shooting a whole movie on an iPhone, like “Tangerine.”

Digital technology has transformed film distribution, and now movies can be beamed by satellite to cinemas all over the world. At it’s peak, “Jurassic World” played on 23,886 screens. In 1975, back when films were physically distributed in cans by trucks and airplanes, “Jaws” peaked at 675 theaters, the largest simultaneous distribution of a film in motion picture history at the time.

Digital technology has not transformed film marketing (yet) but as Steve Jobs said years ago, “The way that we market movies is undergoing a radical shift.”

Constant Contact reports that email open rates for entertainment emails average 24.73 percent and yield a click through rate of 6.95 percent. One film’s email marketing campaign we worked on at GoWatchIt resulted in open rates of 62.3 percent and click through rates of 26 percent. Major studios both covet and fear consumer’s personal information. Dubious lawsuits filed under the 1988 Video Privacy Protection Act, and complex data protections laws in such overseas markets like the EEU have made corporate counsel cautious about allowing aggressive collection of consumer data.

But in a world where global universes of related movies, TV shows, video games, merchandise and experiences are the ultimate IP, the benefit of having a consumer’s personal information is outweighing the risk, as the inefficiency of re-acquiring the same customer over and over for this year’s edition of your franchise via Super Bowl ads has become apparent. Sophisticated marketing companies have long employed CRM (Customer Relationship Management) systems to maximize lifetime customer value (LCV). Strikingly, it is common practice in the film industry to treat every consumer interaction as a one off event.

The media industry is in a certain sense a demographic delivery system, and the film industry is extraordinarily sophisticated at maximizing that through a combination of advertising, PR, talk show appearances and a host of other tactics. But beyond demographics is an even more potent indicator — behavior.

I have seen almost every superhero movie ever made, but since I am a 56-year-old male that reads The New Yorker, I don’t fit the demographic model and in a certain sense do not exist. Imagine if the studios could track my viewing habits, recommend programs from their libraries, and greenlight new content for my future enjoyment they could be reasonably sure I would be interested in. If they could do that — they would be Netflix!

Netflix doesn’t care about demographics; they care about audiences. Netflix has no monopoly on technology, but what they do have is a relentless focus on using it to drive decision-making, difficult in an industry like Hollywood where proud tradition can sometimes be an obstacle to innovation.

Fortunately for Hollywood, a deep draft of talent is becoming available as a generation of Silicon Valley executives are looking for new challenges (and the value of their stock options flatten). These types of marketers will be relentless in using data to optimize marketing with a focus on sales conversions. They will want to do more of what works and less of what doesn’t.

For movie campaigns, awareness and demand generation are primary goals. But with gaps between demand generation (when you see the ad) and the actual conversion (buying the movie ticket or digital download), interest can dissipate before a purchase. For Silicon Valley style marketers, impressions are only the top of the conversion or purchase funnel, designed to escort you from initial awareness to sales conversion.

So how can awareness and buzz be converted into paying customers? By encouraging consumers to memorialize their interest at the point of discovery. For example, at the Sundance Film Festival, for film fans that just can’t make it to Utah this year, or who are at the Festival and can’t get into a hot screening, you’ll find our GoWatchIt button on each page of the Festival’s Digital Film Guide or mobile apps. An alert can be set for any feature film in the Festival (look for the orange ‘Set Alert’ button on the bottom right of each page). After setting an alert, GoWatchIt will automatically send an email whenever that festival film is available in theaters, On Demand, or on Netflix, iTunes, Amazon and other legal services.

Here’s a video that shows you how it works.

We also track each consumer’s total behavior on our platform such as what other movies they watch and how they choose to watch them, allowing us to create highly accurate taste profiles we can use to recommend other content to them at another time.

Conveying the consumer from awareness to consumption also has the salubrious benefit of making legal consumption easier than piracy, as our partners in the MPAA have recognized by working with us to launch their content discovery portal, Wheretowatch.com.

At the Morgan Stanley Technology, Media & Telecom Conference in 2014, Warner Brothers CEO Kevin Tsujihara revealed that the studio spent approximately $2 billion a year in marketing. If that could be more efficiently deployed while enjoying the same revenue result, any savings would fall right to the bottom line. Driven by activist investors and that kind of math, film marketing is at the beginning stages of using digital technology to enjoy huge gains in efficiency and output that will be able to help satisfy audiences by connecting them to content they will enjoy.

See the explanatory video below.