• by Aaron Baar , May 10, 2013

Movie studios should be more targeted in their promotional efforts, and should reach a better understanding of how different communities respond to different opportunities such as paid advertising and blogs.

According to research conducted by Shyam Gopinath, an assistant professor of marketing at the David Eccles School of Business at the University of Utah, larger markets such as Los Angeles, Chicago and Denver are more attuned to blogs and other social media, while smaller and medium-sized markets (like Salt Lake City and New Orleans) are more responsive to paid advertising.

For the research, Gopinath (and colleagues Pradeep Chintagunta at the University of Chicago and Sriram Venkataraman at the University of North Carolina) reviewed the box office performance of 75 films from 2004 (which represented 90% of all movie revenues from that year) in 208 U.S. markets. The study measured the effects of pre- and post-release blog posts about the films, how many blog posts were made about a given film, whether those posts were positive or negative and the advertising spend by studios to promote those films.

Overall, the study found that many studios were marketing inefficiently, and despite nationwide blanket marketing programs, they only released movies in 53% of markets that were most responsive to advertising and in 44% of markets most responsive to blogs and social media.

“We found that some of the larger markets could be classified as more responsive to blogs and social media than advertising,” Gopinath tells Marketing Daily. “Given the budget and advertising across all the markets, they could do a better job of choosing the markets that are most responsive to advertising.”

(Although the study looked at films from 2004, Gopinath said they did run the sampling against more recent films to be sure the findings held up.)

The study also showed that blogs were more effective in marketing to young consumers, Asians and Hispanics, while Caucasians were more affected by paid advertising. When it comes to blogs, the number of posts written about a film affect its opening day performance, while the substance matters more 30 days after opening.

“The results of this study show that studios are limiting the potential of their films’ box office success,” Gopinath says. “The inefficient, blanket approach in place at many studios fails to take into account the diverging media consumption preferences and diversity of audiences across the country. With a more targeted approach that tailors marketing and social media efforts to specific markets, studios can see greater return on investment from their nationwide outreach.”