Commentary

Movie Biz Wastes Money With Too Much TV Spend, Says MarketShare

by P.J. Bednarski , Staff Writer, May 11, 2015

Action movies aren’t anything if they’re not overdone. Why just blow up a building when you can destroy the entire downtown? Too much is never too much.

A new study from deep-dive analytics firm MarketShare tabulates that studios are, on average, spending 82% of their PG-13 action movie ad budgets on television. They’re getting a good bang (pun worked hard for) for the buck: 64% of a film’s revenue, MarketShare figures, came from TV spots, and movie ads wear out their welcome with consumers slower on TV than ads anywhere else.

But like those movies, sometimes it's overkill.

“Despite TV’s powerful impact, however, advertisers’ TV spend did exceed the point of diminishing returns,” MarketShare asserts. It says a 50% ad spend on TV would have made more sense, and instead of 10% going to digital, around 35% would have been more efficient. There's a timely upfront season suggestion.

That 10% digital now gets is three times more effective than TV at driving revenue, MarketShare says.

I like when emerging media seem to come to the table and ask for more and better crumbs; it’s what cable did when it began to emerge as its own thing in the '90s. But those begging days are nearly over.

Forrester Research last year estimated that ad spending on the Web should overtake TV advertising in the U.S. by 2016, and surpass it in 2019, when it will account for 36% of all ad spending (with TV at 30%). Not all of that is online video advertising, but a good portion is.

Broadly speaking online digital spending seems to be a good add-on once a campaign is already underway. But for movie marketers that have depend on a short, intense window to get people out to the bijou, time is really of the essence.

That’s why they’ll pay a premium to advertise on TV that gets big live audiences, like sports and some anomalies, like HGTV, where over 90% of the viewing is done live or the same day. Still, with the proliferation of online viewing and mobile, the analysis that digital platforms deserve a bigger piece might turn some mogul heads, who think nothing of spending $40 million to promote even average movies.

Here’s another hairpiece-raiser: MarketShare says revenue generated from YouTube ads far exceeded spend. In the category of PG-13 action movies, YouTube made up 4% of total U.S. ad spend but generated 16% of marketing-driven revenue. At Google's TrueView, in which advertisers only pay if viewers interact with the ads, the messages generate $8 in revenue for every $1 spent.

Me? I’ll wait for it on Netflix.

pj@mediapost.com

advertising, analytics, marketing/branding/advertising, movies, research

5 comments about "Movie Biz Wastes Money With Too Much TV Spend, Says MarketShare".

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Doug Garnett from Protonik, LLC, May 11, 2015 at 12:36 p.m.
Interesting. Having done a "deep dive" into similar statistics... Every one of these firms I've dealt with that are allocating media effectiveness for a broad schedule have huge assumptions built into a black box model and don't tell you. Clearly, MarketShare has presumptions about online effectiveness that tend to online. In my broad experience the assumptions are pretty absurd. And this reminds me of the days when people like MarketShare all gave Apple grief for spending the bulk of THEIR budget on TV and not spending online... Of course, Apple was rapidly growing into the world's biggest valued company WITHOUT online spending...and with TV.

My advice: Pretty much ignore what these guys are saying. They build their business by making people doubt what their doing- the ultimate FUD pitch.
Reply

Leonard Zachary from T___n__, May 11, 2015 at 12:50 p.m.

The Trailers on YouTube Promoting more BitTorrents they are.

Ed Papazian from Media Dynamics Inc, May 11, 2015 at 1:11 p.m.

Every one of the ROI research houses makes the same point----namely that advertisers spend too much on TV and should allocate more of their dollars to "other" media.

In principle they are right, as all campaigns that spend almost their entire budget in one medium run the risk of having their ads wear out their welcome and become redundant. The problem arises when the researchers start to offer recommendations that give the impression that they are based on data but, in reality, are merely that----opinions.

How do we establish that the movie companies would do better in terms of driving ticket sales, if they cut their TV dollars down to 50% and raised their digital to 35% without actually testing the results of making such a change in the marketplace----not once, but many times? Has this been done? I very much doubt it? And what about deciding what portions of the TV campaign should be cut? Any guidance here about dumping those very high CPM broadcast network Thursday night spots, or do we trim some of the lower CPM cable stuff?As for ditital, are we talking about "targeted" video buys, with their very high CPMs and very low ad "visibility" rates? Common guys, how about a bit more specifity here?And have you any relevant data that advertisers can mull over?

Oh, least I forget, who gets the job of explaining a major shift away from TV to the theater chains? That should be a lot of fun to watch.

Doug Garnett from Protonik, LLC, May 11, 2015 at 4:53 p.m.

Ed... I don't agree that allocating majority of media to one medium is a mistake in principle. It all depends on what you are trying to do, the medium where your ads work best (TV being a good medium for a movie trailer), your audience, relative costs, etc.

Certainly, in some cases spreading budget gains efficiency or adds impact. In other cases, you pay far more than CPM in, say, digital to get the same impact as on TV.

But it's my experience that a great many clients would be wise to consolidate, rather than spread, their media. It's the military equivalent of avoiding spreading the troops too thin.

Ed Papazian from Media Dynamics Inc, May 11, 2015 at 6:37 p.m.

@Doug, I think that a movie advertiser's case may be very different from other types of ad campaigns. My comments were referring to a typical branding campaign for a product or service that, typically, may run for 2-3 years before a new positioning strategy---hence a new campaign---is contemplated. In such cases, there is evidence that repeating the same TV message---even if a "pool" of executions is utilized----inevitably leads to wearout as, over time, those who are succeptible to the message get the point and those who don't pay no attention. In such cases, there is a clear possibility----not always proven, btw----that using another medium or even several additional media, may help sell the advertiser's message to some who have blocked out the TV campaign. Also, the theory holds that saying the same thing in several ways allows one medium to compliment the other in terms of reinforcing the impact of the campaign.

Movie advertising is quite different. Here we are talking about short spurts of concentrated promotional activity centered around the theatrical launch of individual films. It is quite possible that one might advocate a heavy TV effort as the basic platform for each of these promotions, without overdue concern for wear out. That doesn't mean that I would never consider digital or go higher than 10% of my budget in digital....as you say, each case might require different approaches and targeting/timing strategies.