Summer's Flops Spur Movie Studios To Reassess TV Ads

WSJ.com - KATE KELLY and BRIAN STEINBERG : "As a long and disappointing summer movie season comes to an end, Hollywood marketers are realizing that network-television advertising, long the lifeblood of their movie campaigns, may not pack the punch it once did.

Network TV has been part of Hollywood's sales formula for many years, as studios desperate to launch expensive blockbusters blitzed the national airwaves in an effort to reach the broadest possible audience. But many studio executives now are calling that formula into question, having watched this summer as it failed to pay off amid a string of box-office laggards.

The diminishing effectiveness of such ads is to some symptomatic of a broader problem in Hollywood. Audiences have caught on to the studios' tactics for making an "event" out of every new movie and so can't be counted on to turn out in droves just because they were confronted with a hail of come-ons during Thursday night prime time.

"In their quest for bigger and bigger opening weekends, studios have so overmarketed their movies during the past few years that they've left audiences weary," says Marc Shmuger, vice chairman of General Electric Co.'s Universal Pictures. "By the time some blockbusters open, moviegoers aren't feeling excitement -- they're just feeling exhausted."

That certainly was the indication from audiences who stayed away from heavily marketed summer movies such as "Stealth," from Sony Corp.'s Sony Pictures Entertainment, and "The Island," a joint venture of DreamWorks SKG and Time Warner Inc.'s Warner Bros. -- two action flicks each of which cost roughly $150 million to make and market and likely will be outgunned in U.S. ticket sales by the tiny nature film "March of the Penguins."

For many of the big studios, this summer brought unsettling results, as directors with solid track records failed to deliver and previously reliable popcorn fare proved no draw. Some "big" movies got bad reviews and worse word-of-mouth. Weekend box-office revenue sagged significantly below its levels of just a year ago for most of the season, lifted only by well-loved directors such as George Lucas and Steven Spielberg -- whose respective "Star Wars: Episode III -- Revenge of the Sith" and "War of the Worlds" made mints -- and such sleeper hits as the R-rated comedy "Wedding Crashers."

Against this backdrop, it is small wonder that studio marketers are looking for new ways to fill theater seats. For some, this first entails making films -- and then creating ads -- calculated to appeal to the largest possible audience.

Consumers between the ages of 12 and 34, who are at the heart of the moviegoing public, "spend more time on the Internet, playing videogames, on their cellphones" than going to movies, says Tim Spengler, executive vice president and director of national broadcast for Interpublic Group of Cos.' Initiative, an ad-placement firm. "As a result, marketers are slightly altering their mix to better target the heavy moviegoing young audience," he says.

Recent trends in Hollywood ad spending have begun to reflect that. In 2004, the amount studios spent on network-TV ads declined slightly, to about $1.21 billion from about $1.23 billion in 2003, according to TNS Media Intelligence, a tracker of ad spending. Spending on ads in national and other newspapers also declined, and studio executives say that an even greater drop-off is likely to follow in the coming years.

Studio executives stress that TV still is a critical aspect of their sales pitch. Yet with the ever-more-crowded tableau of network and cable options, "no specific, individual show is absolutely essential to your message," says Jim Gianopulos, co-chairman of News Corp.'s Fox Filmed Entertainment. As a result, he says, "the days when you absolutely had to be on 'Friends' if you were opening a movie the next day are a thing of the past."

Fox now is toying with a few different ways of potentially saving television-buying dollars while still reaching viewers. One option: spreading the same money it would cost to buy network prime-time spots over a handful of cable channels. Another would be to purchase prime-time ads via local stations rather than through national networks.

Network television once was a must-see for viewers and a must-buy for advertisers. But habits have changed. "Now it's more complicated," says Initiative's Mr. Spengler. "You've got to buy a couple of networks, and you've got to throw in some cable."

Expensive Super Bowl ads also are under review. Long a staple for the early spring and summer movie-marketing push, the costly commercial spots don't always deliver, according to some Hollywood marketers. This past February, a handful of studios, including Universal and Time Warner's New Line Cinema, skipped Super Bowl ads altogether.

"We've found that the retention rate is actually not that great," says Russell Schwartz, head of marketing at New Line, referring to how many viewers remember the spots. Given that the big game is broadcast long before the summer season begins, he adds, "there might be a more effective way to spend your $2.4 million than on a 30-second spot seven months before your movie opens."

In another push to cut TV costs, some studios are aligning themselves with different sorts of advertisers. To market "Wedding Crashers," New Line joined forces with Anheuser-Busch Cos., brewer of Budweiser beer. Bud sponsored the movie's New York City premiere, retail promotions and local screenings and offered "Wedding Crashers" content on its Web site.

"Wedding Crashers" figured prominently in two Budweiser TV spots and in an online movie ad called "Crash this Trailer," which allowed users to substitute images of their faces on the bodies of "Wedding Crashers" stars Owen Wilson and Vince Vaughn.

Moviegoers "are no longer a captive audience in prime-time broadcast network television, and I think all of these tactics basically reflect a new awareness of that," says Lee Doyle, director of client services for WPP Group PLC's Mediaedge:cia, another ad-placement firm. He predicts that "you're going to see an effort to tie marketers in with a much wider array of movies," not just the $150 million-plus films.

While spending on network TV fell slightly in the past year, TNS Media Intelligence figures show that spending on relatively inexpensive Internet advertising rose.

Studios say Internet marketing can be especially effective in reaching a pre-existing audience. For its successful "Batman Begins," Warner Bros. Entertainment unveiled its movie trailer online about a year in advance, using a variety of corporate and fan sites.

Among other things, online marketing worked well for Lucasfilm Ltd.'s "Revenge of the Sith," whose trailer first appeared online late last year. The film, which opened this past May, went on to sell more than $375 million of tickets domestically.

"Part of what makes the Internet so powerful is appealing to people in the places that they congregate, not necessarily making people come to you," says Dawn Taubin, Warner's marketing chief."