How Digital Marketing Campaigns Can Help Hollywood

(And Your Business)

Posted on 19 Nov 2013 0 comments
Digital Marketing In a Digital Age
Odds are your business is familiar with and has spent a lot of time considering the huge
variety of available digital marketing strategies. The world is becoming ever more digital, but
will your efforts yield any results? For every Old Spice campaign theres a BBH Labs
Homeless to Hotspot debacle.
Youre not the only business questioning the validity of digital marketing Hollywood
sticks to mainly traditional marketing techniques which has led to some criticism of their
failure to adapt. But its foolish to anticipate any sort of adapt or die situation for
Hollywood; theyre not going anywhere, even if they dont start utilizing more widespread
digital campaigns.
That being said, there are still fantastic examples within Hollywood that warrant careful
analysis.
The Hollywood Multiplier
Hollywood is a game of numbers. Executives smarter than I am hedge multi-million dollar
bets on a daily basis and need statistical evidence to make these decisions as informed as
possible. As someone who spends their Sundays waiting for the weekend box office results,
its impossible not to notice the creative bookkeeping used by studios to determine a films
profitability.
Judging films on a commercial scale is tricky. No matter how astute you are, the studios will
always know more than you. FilmSchoolRejects summarized the phenomenon as such:
The formula varies depending on whos doing the math, but for our purposes a general (and
as close to believable as it gets) rule of thumb seems to be that a film needs to gross 1.5 to 2
times its budget just to break even after production, marketing and distribution costs. So a
movie budgeted at $100m needs to gross $150-200m before the first dollar of profit will be
counted.
This explains why films like The Lone Ranger and John Carter have become the poster
children of Hollywoods impending doom, despite each grossing over $260 million dollars
worldwide. For those interested, The Lone Ranger had a production budget of $215 million
and John Carters production budget was $250 million.




$250 Million Budget $215 Million Budget
Notice the words production budget in that last sentence thats the budget used to
complete the film, from pre-production to post-production. A large chunk of the extra money,
the money that necessitates a multiplier, goes towards marketing a film.

How to Be Cost Effective
This all begs the question: Is Hollywood actually being cost effective? According to Oliver
Luckett, CEO of the digital marketing company TheAudience, theyre not. At all. Heres
what he had to say when he was interviewed by TheWrap:
I think theres a tremendous amount of inertia in the movie-marketing business. I think that
its status quo to spend tremendous amounts of money through broad campaigns. I think it
takes a little more work, but you can be remarkably efficient in an iterative way, and not just
this Im gonna spend 100 million dollar marketing this movie no matter what.
Its not as though Hollywood executives are a homogeneous mass of Luddite flesh, they just
havent realized the potential value new technologies like social media outlets can have on
their box office haul. Luckett criticizes the notion that you spend $100 million on TV ads,
especially when the data tells you that your 18-to-24 audience isnt even watching TV. He
goes on to ask If the data says you should try to reach XYZ directly through the social
graph, why arent you putting your resources there?
Its about being as cost-effective as possible. If studios didnt have a 1.5 times multiplier
applied to each of their films it would be much easier to turn a bigger profit. Lucketts
company TheAudience worked with fledgling distributor A24 Films to market their 2013
films Spring Breakers and The Spectacular Now. While neither was a box-office smash, each
turned a respectable profit, mostly by avoiding heavy marketing costs.
Each of these movies has had some of the highest per-screen averages this year, and very
little, if any, traditional marketing goes into those movies. Those are almost entirely social. -
Oliver Luckett
And this social nature pays off Spring Breakers grossed nearly $32 million on a $5 million
budget while The Spectacular Now has grossed nearly $7 million on a $2.5 million budget.
Thats success. It may not be Iron Man level success, but it doesnt have to be. By using a
cheaper alternative to marketing, the potential profitability of these inexpensive films
skyrocketed.

The Hunger Games Revolution
While Oliver Luckett points to Spring Breakers and The Spectacular Now for successful
social media campaigns, Lionsgates 2012 film The Hunger Games represents one of the
strongest and financially lucrative campaigns of all time.
In a lot of ways, Lionsgate was the perfect studio to employ such an inventive web of digital
marketing. As an independent studio or a mini-major, they dont have a huge, deep-
pocketed conglomerate like Viacom or The Walt Disney Company helping with marketing.
With a smaller production and marketing budget they had to make sure every dollar counted.
And Lionsgate won. Look no further than the $153 million The Hunger Games opened to in
March of 2012. Skeptics can attribute this success to the books built in fanbase, but this
opening was huge. Gargantuan. Record-Breaking. The most profitable opening weekend of
any non-sequel ever. This level of success couldnt have come from fans of the book alone
the only Harry Potter film to have such a successful weekend was the last in the series,
Deathly Hallows Part II.

How Did They Accomplish This?
How could this be possible? How could an independent studio production with a $78 million
budget (vs. the $250 million of Harry Potters Deathly Hallows films) open to $153 million,
especially when their marketing costs were extremely limited?
Its simple. They went where their audience was, where they could make the biggest splash
with the smallest stone.
They went to social media.
According to Daniel Frankel with paidcontent.org, most major studios create an illusion of
social media buzz by distributing typical film-related detritus. You have your poster, your
casting announcement, perhaps some behind the scenes photos. Meanwhile, Lionsgate put
its resources into creating rich-media elements that far outstrip the ambition of simple games
and other movie collateral.
Before we continue, would you like to pause for an interactive tour of a Hunger Games city?
How about their most decadent and imposing option, The Capitol itself? Thanks to Lionsgate,
this tour is just a click away. For the first film, Lionsgate created an interactive experience
rendered from the book with painstaking detail. Fans of the book could (and still can) login
and explore a city theyd only read about. Lionsgate activated the core fan base from day
one, fired them up and let them carry the message to their friends, which in turn grew the fan
base. With The Hunger Games: Catching Fire opening on November 22nd, you can bet The
Capitol tour site will be staffing up for another busy round of excursions.


For Lionsgate, it didnt stop there. They didnt only create new content that worked hand in
hand with social media, they let their entire marketing effort revolve around the films
different digital platforms. Aki Karpel at fastcocreate.com explained that Lionsgates
executives Tim Palen, Erika Schimik, and Danielle DePalma realized early on that The
Hunger Games fan base was not only active online but already building up buzz and
anticipation regarding the film.
To tap into and expand this market, they made Facebook the essential gathering place for
fans and the place where they could gain information, access and community. Lionsgate first
announced the films principal cast on the Facebook page and began offering fans a chance to
tour the set shortly after. Danielle DePalma said it was really all our way of developing that
direct connection and that direct dialogue with them.


Each social media platform has specific strengths and weaknesses. The Lionsgate team
structured their campaign to exploit each platforms inherent benefits. If Facebook was the
gathering place, Twitter was the best way to establish identity and communicate with non-
fans. Hunger Games TV ads announced a new hashtag that kickstarted the next aspect of their
digital rollout. Tumblr is the most visual of platforms, so The Hunger Games created a
Capitol Couture blog that shows off the outlandish fashion sense of the fictional Capitol.
Shortly thereafter, billboards and bus stop ads appeared, spreading this really inventive
strategy even further.



Its worth pointing out that every aspect of the campaign was inspired by Suzanne Collins
source material. The team at Lionsgate created an entirely new adaptation of this existing
product, but made sure they respected both it and its fans. Not only that, they used it almost
as a business partner, turning to it for new ideas and specifics. This simultaneously earned the
respect of die hard fans while convincing newcomers that this world was intriguing enough to
visit in theaters.

Was Lionsgate Really That Successful?
The evidence is even more powerful when you look at the financial track record of other
Young Adult adaptations. Some have been profitable, but a shocking number of them have
underperformed, especially if we apply the 1.5 multiplier. Films adaptations come with a
built in audience, so its surprising when so many flop. For every Harry Potter series,
theres another that never got a second chance. With so many external variables, its
impossible to give all the credit to Lionsgate / Summits digital marketing efforts, but its
worth noting how much bigger their success has been.
Lionsgate/Summit Productions
The Hunger Games:
Production Budget: $78 million
Worldwide Gross: $691 million
New Moon:
Production Budget: $50 million
Worldwide Gross: $709 million
Other Production Companies
The Mortal Instruments: City of Bones
Production Budget: $60 million
Worldwide Gross: $80 million
Beautiful Creatures:
Production Budget: $60 million
Worldwide Gross: $60 million

What This Means for Your Business
This article isnt for Hollywood. Hollywood isnt going to read it, and if Oliver Luckett is
correct then theyll be too obsessed with their current model to make any sudden changes.
This article is a chance for you to take a step back and observe unbiased evidence that digital
marketing can work.
The Hunger Games is really worth analyzing because of how much success they achieved
with their limited budget. Its true that even a mini-majors limited budget probably
exceeds your own, but they succeeded more because of their ideas and content than their
financial muscle flexing.
Oliver Lucketts biggest criticism in his interview is that Hollywood isnt being cost effective
and its hurting the entire industry. Sure, Lucketts entrepreneurial effort relies on
Hollywoods business, but his criticisms are still completely valid. And they can apply to you
and your business as well. Are you being cost effective? Should you look into a digital
marketing campaign as well?
The first step is researching your target demographic. Which form of marketing will reach the
most amount of people? If youre trying to entice a younger crowd, the 18-24 year old
demographic Luckett mentioned, then digital marketing is your best bet. Not only is it
cheaper than traditional advertising, it may actually be effective. If your audience isnt
watching your television ads, then the cost is actively hurting your business.
Not only is digital marketing often cheaper, its more immediate. There are a wide variety of
analytics tools that let you monitor traffic and results in real time. You can create a
community of supporters and potential customers, a place where two way communication is
easy and encouraged. Though this type of interaction may seem impersonable, you can hit
your target market in one place, at one time. And these digital outlets are even more effective
when they open the door to traditional communication. You can respond to posts directly on
social media or point customers towards other, more personal outlets.
If traditional marketing still reaches a majority of your audience, consider blending it with
digital marketing to encourage growth. Each method can complement the other, hitting all the
demographics youre looking for. If youre marketing toys, for example, you want to reach
the children and the parents with the money. You can do traditional television ads as well as a
social media blitz to make sure everyone sees your product.
The Hunger Games proved that unique content is the most alluring and effective, so consider
funneling your demographic to social media platforms where this content can be easily
accessed and shared. You already believe in your product or service, and social media can
help grow your fanbase. A clever, interesting, fan centered social media campaign can turn a
product you love into something completely different something that everyone else will
love as well.

Lionsgate / Summit Productions:
Twilight:
Production Budget: $37 million
Worldwide Gross: $393 million
New Moon:
Production Budget: $50 million
Worldwide Gross: $709 million
Eclipse:
Production Budget: $68 million
Worldwide Gross: $698 million
Breaking Dawn Part I:
Production Budget: $110 million
Worldwide Gross: $712 million

Breaking Dawn Part II:
Production Budget: $120 million
Worldwide Gross: $829 million
The Hunger Games:
Production Budget: $78 million
Worldwide Gross: $691 million


Other Production Companies
Percy Jackson: The Lightning Thief:
Production Budget: $95 million
Worldwide Gross: $226 million
Percy Jackson: Sea of Monsters:
Production Budget: $90 million
Worldwide Gross: $195 million
Bridge to Terebithia:
Production Budget: $20 million
Worldwide Gross: $137 million
Lemony Snickets A Series of Unfortunate Events:
Production Budget: $140 million
Worldwide Gross: $209 million
Eragon:
Production Budget: $100 million
Worldwide Gross: $249 million
The Spiderwick Chronicles:
Production Budget: $90 million
Worldwide Gross: $162 million
I Am Number Four:
Production Budget: $60 million
Worldwide Gross: $149 million

The Mortal Instruments: City of Bones:
Production Budget: $60 million
Worldwide Gross: $80 million

The Host:
Production Budget: $40 million
Worldwide Gross: $48 million