Movie Marketing, Especially on TV, Needs to Evolve

Guest blog: Applying basic economic principles shows the studios would be wise to go beyond the basics when marketing movies on TV

When you do research and try to figure out why people came to a movie, the main source of information is always television

No one argues the reach broadcast networks and cable television stations possess when it comes to potential moviegoers. It is the single most effective way to quickly market films to the new audiences that the studios need to create. However, economically speaking, knowing the main source/cause of a problem — audience creation in this case– says nothing about how it should be fixed or whether you should use your valuable resources to fix it in the first place.

In 2002, heart disease was the leading cause of death in the United States. There were 202 deaths per 100,000 Americans. Cancer, stroke, chronic lower respiratory disease, and general accidents rounded out the top five. So, which one should we devote most of our resources to?

Answer: this is the wrong question.

Rather, we want to know for which disease we receive the most bang for our buck. In economic jargon, it is the point where the marginal benefits of prevention efforts equal the marginal cost of those efforts.

The same logic should govern all other resource decisions, including the allocation of marketing dollars across different media outlets. Although television is essential to every theatrical campaign, this doesn't mean it's where the money should automatically funnel — especially in the future. For now I will cede to industry executives and assume television, at the margin, makes sense to address first.

Referring back to the heart disease example, suppose we decided it makes the most economic sense to tackle cancer first. Does it follow we should direct our attention to cancer drug development? Or cancer treatments like chemotherapy? Again the answer is no, it doesn't. And, again, the same is true for simple television ads on the networks.

Why not, for instance, couple ads with additional On-Demand user options for say, a Warner Brothers Studios interactive-guide featuring upcoming films and other quality features. Users could sort through all the upcoming and pre-production titles gaining further insights and awareness while heightening their excitement. A publicity platform for not just one movie, but all your studio features … on television.

For any kind of practical savings, especially in the long run, I believe something like this (or even something totally different involving new media, who knows?) will benefit from the economies of scale the major six or so parent corporations possess. Further, in the short run it could mitigate the additional frequency costs advertisements need to be effective.

Ultimately, looking at risk factors and exposures tell us virtually nothing about how to handle them. With the fast-paced technological advances in media capabilities, why settle for using traditional marketing campaigns? I have a feeling the focus is much too narrow, governed by those educated in old media. That's something that needs to change … and will.

Frank Conlon is a recent graduate of the University of Rochester and currently works for Citigroup as an associate. His areas of expertise include economics and marketing, focusing on alternative strategies in the entertainment business. For a time he worked with Michael Rizzo in the Department of Economics as an assistant advising students on lecture material. He currently
lives in New York and writes for Assistant Den at