As one of the most profitable entertainment industries in the U.S, it’s hardly surprising that Hollywood allocates an enormous amount of money to marketing campaigns. From trailer development, to celebrity endorsements, to posters, billboards and merchandising, every year traditional marketing techniques cost individual productions upwards of $100 million in adspend. Imagine what this looks like for a large studio like Warner Brothers, which may bust down theater doors around the country several times each fiscal year, creating billions of dollars in overhead.

(AdWeek, 2014)

In general, every penny makes a difference, and Hollywood can’t regret the money it spends on selling tickets. The Return on Investment (ROI) for a single flick can exceed 1000% in global profits, making advertising a no-brainer. There are, however, smart ways to spend the money allocated to a film’s marketing budget, and less smart ways. In the case of a box office flop, using this money poorly can land studios in debt they won’t easily recover from.

A Rocky Relationship With Online Media

Historically, the movie industry has lagged behind corporations and small businesses turning to the Internet to sell a product, opting instead for conventional marketing techniques which have worked for nearly a century. Time Warner has topped the charts as the biggest spender in TV advertising within the last two years, even while TV viewership steadily declines in the U.S.

Social Media expert Oliver Luckett once described this as an old habit which dies hard, stating “[it’s] a status-quo mentality to spend tremendous amounts of money through broad campaigns….that you spend $100 million on TV ads, especially when the data tells you that your 18-to-24 audience isn’t even watching TV.” But while studio execs have occasionally viewed Internet marketing with reluctance, for independent movie makers, it has often been the only game in town.

The first example of a viral movie campaign came in the form of a project by two film school graduates using handheld cameras, a 35 page script, and little more than a backwoods lot for their studio. The Blair Witch Project had a paltry budget of $60,000 dollars and premiered at the Sundance Film Festival in 1999. With all the trappings of a lowbrow passion project, how did it net $248.6 million as it opened in box offices around the country?

The answer can be found with a simple website that is still online to this day which promulgated the events of the “found footage” movie as a real missing persons case. After the film’s debut, the website became a viral sensation earning the movie enough attention to change the horror genre forever.

Blair Witch was a proof of concept far ahead of its time: the Internet can be an excellent tool for selling movies. But studios that weren’t full of recent college graduates struggled to understand: in 2008, 20th Century Fox contracted then popular YouTube sensation Fred to advertise the upcoming release ‘City of Ember’. In spite of the video’s popularity, Ember tanked in the box office, and Fox has been criticized for their poor marketing decisions.

Changing Tides

That was ten years ago, and things are changing now. Hollywood now has a basically consistent movie trailer cycle specifically geared to draw in Internet audiences through partnerships and online adspend. Social media strategies feature prominently in marketing any blockbuster hit.

Recently the Internet has driven the success of new Star Wars films and Marvel’s many franchises, reaching world records in a matter of weeks. Smaller movies like Unfriended have focused the majority of their marketing budget online, and walked away with 600% profit margins.

Furthermore, TV AdSpend continues to decline across industries, and market research confirms that 87% of Twitter users over the age of 13 make movie-watching decisions based on Tweets. The grassroots support covertly rallied by Disney’s Marvel on Twitter and other social platforms helped Black Panther to break a billion dollar worldwide gross.

So how are they doing it? Let’s look at some of the major methods that we have seen studios use to make the Internet a powerful tool in their overall marketing toolkit.

1. The Snowball Effect

Raising public awareness of a movie takes time. For a major public release to be considered successful, the data suggests that it should net $100 million on its opening weekend. Assuming that studios earn $7.00 per ticket, this means an attendance of around 14 million moviegoers in the span of 2-3 days. Getting 14 million people into theaters is tough, especially when conversion rates are factored in; i.e, it may be that only 1 out of 20 people who are aware of a film will actually go and see it.

In the past, studios worked extensively on merchandising campaigns, previews before other films and billboard spots in large cities to create awareness in advance of a movie’s debut. But in the Internet marketing cycle, Hollywood has a straightforward staggered marketing method that makes widespread awareness possible online.

The key is spreading out an online marketing budget over a long period of time. Viewers are first exposed to a film as far as 25 weeks before its debut at the box office via a teaser. Teasers set the movie community in motion until the trailer release. At that point images, cast, interviews and stories are drip-released into public discourse, raising a movie’s position in SERPs and helping it to trend on social media.

The capstone is the final three weeks before a film’s release, when 80% of the budget is spent on releasing the potential energy of anticipation that this strategy spends so much time developing in one quick burst. If you ever feel like you’re suddenly seeing a movie everywhere, you’re probably catching the tailend of a marketing strategy several months in the making.

2. Teasing Information

Have you ever seen a movie preview only to feel like you knew nothing about the movie being advertised? This is intentional. Trailers have changed a lot over the years, but now they are almost an extension of the movie itself, revealing information gradually as new spots are released to create an overall preview of the film that can only be fully appreciated by sifting through all of the marketing materials.

Today it is common practice for big movie studios to contract completely separate studios to create trailers, and these can be in production for up to 18 months, meaning the process of creating marketing material often begins before the movie is even finished.

Trailers are now typically divided into three categories:

  1. Teasers – as the name suggests, these “tease” small amounts of information to the viewer without explaining much if anything.
  2. TV spots – these are short-form trailers that traditionally debut on television, and are now often displayed as short ads before online videos.
  3. Official trailers – these are the full 2-3 minute film previews you see in theaters, which often blow up on social media and online video sites. A sufficiently large film will have more than one.

Internet users obsess over this format, which gamifies compiling as many snippets of a film as possible. This compilation of Rogue One marketing materials is a good example:

3. Driving Social Media Chatter

For many small businesses today, social media is the de facto way to build an audience and drive revenue. Hollywood knows better to ignore it – in fact, as mentioned earlier, Twitter has been shown to bring in moviegoers on a regular basis.

But beyond trying to get a spot on the elusive trending hashtag list, Hollywood has found great success just doing what everyone else is doing, and that’s keeping page followers updated with interesting content.

In advance of releasing teen romance flick ‘If I Stay’, marketers launched a campaign to draw in the target audience through campaigns on Instagram, Twitter, and Tumblr. Posts were released in a format typical of those platforms, revealing a good sense of what users actually want to see on behalf of the creators:

Speaking of creators, directly engaging with fans by social media has proven to be quite effective as well. Actors and creators working for Marvel often appear at ComicCons to discuss upcoming movies, and these sessions receive tractable attention from online communities.

When The Fault in Our Stars – film adaptation of John Green’s popular, eponymous novel – was still in production, Green, musician Ed Sheeran, and star Ansel Elgort uploaded selfies to Instagram which received widespread attention on the platform.

This is an excellent example of audience engagement, which helps fans to feel they are a part of the production process, and more connected to the final product. The sense of “exclusivity” also drives sharing, which in turn drives exposure.

4. YouTube Partnerships

The failed partnership between 20th Century Fox and former YouTube sensation Fred has already been discussed, but nowadays YouTube is a much more lucrative platform for film companies, who leverage the platform for exposure in many straightforward and less straightforward ways.

  1. Movieclips – we’ve established that the extended release of trailers and teasers is part of the online movie marketing cycle. But in addition to trailers, production companies also license movie scenes and clips to distributors like Fandango, who runs Movieclips, a YouTube channel with over 15 million subscribers. Some of these clips are frequently released prior to the release of a movie.
  2. Movie review channels – it’s unclear to what extent film companies partner with extremely popular movie review channels like CinemaSins or ScreenJunkies. But Honest Trailers is confirmed to have worked alongside movie companies in lampooning their own creations. Negative press is still press.
  3. Advertisement – as a visual medium, the best way to advertise a movie is through other visual media. This makes YouTube audiences a prime candidate for targeting, and so studios also make extensive use of paid spots on videos, and banner ads on the site.

5. “Leaked” Reveals

A minor but completely plausible conspiracy theory surrounds “leaked” images that tend to propagate from movie sets: studios are actually responsible for them.

Sometimes the ostensible origin of these leaks is implausible at best. For instance, prior to the release of Star Wars: The Force Awakens, multiple “leaked” photos took the Internet by a storm.

These images rarely betray any plot points, and studios do not tend to ask for takedowns when they propagate. But even if some guy in a helicopter is responsible for certain leaked set photos, others are released directly by producers, such as Zach Snyder during the production of Batman v. Superman:

The sense of secrecy surrounding a “leak” is tantalizing enough to drive fan engagement, which makes it an excellent strategy to couple with social media.

6. Audience Segmentation

TV adspend is falling out of favor for many reasons. It’s not only the case that less Americans are watching TV, but also the case that a movie’s audience sometimes watches TV far less than anyone else. Occasionally, however, TV can be the right channel for film advertising, and the decision boils down to audience.

Prior to the debut of Black Panther, Disney worked to target black movie-goers and took several routes of getting there. To reach black males, the company released its first teaser for the film during the NBA Finals. This was a good choice not only because of wide viewership, but because the NBA audience is largely comprised of black males.

On the Internet, reaching the right audience is equally important. Movie advertisers know this, and choose the best channels depending on their target. Programmatic advertising includes segmentation as a built-in function: so for instance, if a fantasy film is being advertised towards fans of the fantasy genre, platforms like Google, YouTube and Facebook will show that ad to users who tend to be interested in fantasy.

Segmentation is also relevant when it comes to social media. For instance, when the social media team responsible for promoting The Fault in Our Stars chose to focus their efforts on Instagram and other visual platforms like Tumblr, this choice was not arbitrary. The film had a primary target audience of young females, and visual platforms like Instagram are predominantly used by young females.

As in any other industry, clarifying the audience of a film and making them the focus of advertising choices is an important step in making every effort count.

7. Native Advertising

The bulk of this article has addressed social media, video sites, and other hotbeds for selling a feature flick to audiences. But the most traditional form of Internet advertising is still alive, and still important for the movie industry.

The text-based PPC (Pay-Per-Click) doesn’t work well for selling a movie due to obvious reasons. But even banner advertisements are less popular than they once were, following the trend in banner’s decline. A simple method for studios to get eyes on a new trailer is native advertising.

Native advertising is basically any ad that doesn’t look like an ad. Rather than being served through third party systems like AdWords or Pulsepoint, they live on whatever platform they are being promoted to. Facebook has a system, and so does Twitter. YouTube’s native ad network has already been referenced a few times, displaying content before the start of a video.

There are several reasons native works so well for Hollywood features:

  • Extremely good segmentation – this is particularly true on Facebook, which keeps comprehensive data about all of its users.
  • Unintrusive – native ads look like ordinary content at a glance, making the viewer less likely to click away or turn somewhere else.
  • Heavily visual – for trailers and spots, it’s important for an ad system to offer playback and sharing options. Almost every popular native network allows for this.

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