As Social Media Marketing Increases, Will TV Ads Decline?

“What is originality?  To see something that has no name as yet and hence cannot be mentioned although it stares us all in the face.  The way men usually are, it takes a name to make something visible to them.”

                      Friedrich Nietzsche

We know that we are in the midst of a massive media transition as we watch the Internet reshape the world of mass media. We see new forms of entertainment and marketing emerge that use this massive distributed network. These new forms do not treat people as passive mass media consumers. Instead people exist as active “users” who engage with immersive experiences that they have a hand in shaping and guiding.

The traditional lines between marketing, advertising and entertainment blur within these experiences.  This blurring causes even more confusion.  We do not even know what to call these new forms and as a result– they are not yet truly visible to us.  Words like transmedia, story worlds, gamification or spreadable media are used to give these forms definition but they do not seem to capture them completely.  We know a 30 second TV spot when we see it.  But what is all this other stuff?

Understanding The Blur: No Interruptions Please

Fast Company has been diligent at detailing some of these new forms.  Recently they analyzed  The Hunger Games  and Prometheus and how Ignition Interactive employed a variety of techniques to engage with people online in order to persuade them to leave their homes and see these movies in movie theaters. Each piece gives a glimpse into the future of movie marketing and is worth a close read.

In each example, Ignition Interactive created large story worlds that immersed their participants in a variety of media.  These story worlds have game play, various kinds of video and user generated content that is spread across multiple platforms, (Facebook, Twitter and tumblr, among others) and move across multiple screens.  They weave a story that is inspired by the film’s narrative and additional narrative that is created by fans.

This approach capitalizes on a massive shift in consumer behavior brought about by technology.  As Steve Coulson, Partner and Creative Director at Campfire put it in a comment on an earlier post of mine;

 “Interruptive advertising, like TV commercials and banner ads will increasingly be filtered by technology like ad blockers and DVRs.  To gain attention and interaction, you need to move to permission marketing tactics, that excite people rather than interrupt them…  The Prometheus campaign emerged on multiple platforms, and spread primarily via social media WOM.  In that sense, these types of campaigns – free creative prequels to paid entertainment experiences – work in the way that a free product sample does to drive awareness.  Try before you buy, coupled with an organic distribution method that does not end when a media buy is finished.”

Evan DeHaven, President/Executive Creative Director of Ignition Interactive, seconds Coulson’s point when he comments;

“Consumers don’t want to be force fed ads anymore and in most mediums we can bypass ads quickly and easily so they have become less and less effective. For instance try naming the last site you saw a banner ad on. This is hard to answer although they are on every website. The reason is we know where they are placed, their shapes and sizes, so our eyes are trained to look around them.

Instead if we bring a story world to the mediums users frequent and allow them numerous and easy entries along with opportunities to participate, your marketing effortlessly becomes pleasurable instead of an annoyance. This pleasure in many cases converts to a purchase and/or share.”

He ends his comment with a sentence in all caps so we can really get the point.

 “STOP INTERRUPTING WHAT PEOPLE ARE INTERESTED IN AND BECOME WHAT PEOPLE ARE INTERESTED IN”

The New World of Movie Marketing

It is clear that in this new world, whose contours we are beginning to see, interruptive advertising such TV or online banner ads will face greater resistance from consumers. With any form of advertising, the film company (or any brand one might argue) has to seduce the viewer with its message.  But the terrain for the seduction has completely changed. The consumer may still want to be “seduced” but she does not want to be “interrupted”.

Does this new method work?  Can a movie company get people to see its movies in theaters without an immense TV ad spend?

In at least one case the answer appears to be yes.

Ronald Grover of  Reuters reports that Lionsgate spent 15 to 20 million dollars less in TV advertising on The Hunger Games because of its successful social media efforts.  This means it cut a 1/3 of its normal spend on TV ads and still achieved a large box office return.  And though their social media campaign was extensive, it cost much less than 20 million dollars.

Fewer dollars were spent to gain an equivalent large box office result that only TV ads would have previously enabled. Put simply, Lionsgate discovered that it did not need to place as many TV ads as it normally did to fill theater seats.

As Greg Verdino, the author of MicroMarketing  notes in a comment,

 “…is it more efficient and/or effective than pumping money into traditional advertising? …signs are starting to point to yes. I’d much rather invest my money (even if it is 7-figures’ worth) in building consumer buy-in and participation, and in creating the kind of social ownership that fills theaters opening weekend – rather than in spray and pray advertising that looks, sounds and feels pretty much the same as everyone else’s.”

What effect would this have if this change in spending were to spread throughout the movie studio system?

In 2011 the movie studios collectively spent $2.9 billion on television advertising to convince people to show up at movie theaters for their new releases.  If every studio cut its TV ad spend by 1/3 as Lionsgate did, that would mean one billion dollars less spent on TV ads on an annualized basis.

Of course this means one billion dollars less in revenue for the broadcast and cable networks that normally show movie advertising to their viewers.  A big drop in revenue, no matter how you slice it.

Will Studios Cut Back TV Ad Spends?

A fascinating paradox is now set up within the larger mass media ecosystem.

The Internet helps the movie business find a new way to connect with its customers at a much lower cost, thus helping the studios’ bottom line. However, by doing so, less money flows to other members of the mass media ecosystem—the broadcast and cable networks–that are often owned by the same companies.  So some large mass media companies will save money in one division–only to see reduced revenue simultaneously in another division.

We might see that some studios do not reduce TV ad budgets even when they can achieve the same result by using less expensive social media campaigns like The Hunger Games. Part of this will be attributable to their strongly held belief (illusion?) that they must always spend big on TV to achieve large box office grosses. After all it is the way of mass media.

In addition, their corporate masters might not allow them to reduce what they spend—after all the company needs that revenue. This could act as a brake on marketing innovation.

However, companies like Lionsgate, who are not owned (yet) by larger entities will benefit by using these new methods—as they already have.

And perhaps, when these new forms finally gain a name and are therefore easier to see, innovation could accelerate and TV ads will no longer be the king of movie marketing.

 

Note: This is a revision of an earlier post of mine titled Another Crack In The Mass Media Wall.  Thanks to everyone who commented on that post, especially those whose comments contributed to this piece.

About Chris Dorr

I consult with companies on digital media strategy and business development. Clients include Samsung, MTV Networks, Tribeca Film Festival, Shaw Media and Canadian Film Center. I created the Future of Film blog for Tribeca. I have worked in the movie business for Disney Studios, Universal Pictures, Scott Free and in the digital media business for Intertainer, Sony and Nokia. Contact me at chris@digitaldorr.com or follow me at @chrisdorr
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  • ivalscifi

    As I’ve said to you before, Chris, Hunger Games with its huge built in fan base was an easy shot for efficient marketing for social media. Ditto, Science Fiction material that reaches fan boys. 

    What will be harder is to use a no interruption model on ismaterial that’s fresh to a target audience that are not embedded in social media. Cloud Atlas? 

    • chrisdorr

       I think it is easier in the case of a movie like The Hunger Games because it is based on a bestselling novel.  However it is wrong to assume that it is not possible to employ this strategy for any movie without respect to genre, size or subject matter. Cloud Atlas actually lends itself to this model as it creates a mysterious world that can be explored and extended in a variety of ways online. It is a perfect candidate. Every age group in the US is embedded in social media.  Also, every age group is getting used to blocking ads with the use of DVRs or simply ignoring the banner ad on the web site. Advertisers will have no choiee but to employ these methods to get people to see their brands. It may be harder but necessary.

  • http://www.fastcompany.com/user/sam-ford-0 Sam Ford

    One of the challenges is well is to find a way to use transmedia storytelling, for instance, or ways to bring the audience into more active roles of circulating and engaging with content that actually enhances the enjoyment they get out of a particular genre. To the point of some of this thread, some genres have figured this out pretty easily. But I think back to a Virginia Heffernan piece in the New York Times awhile back about Friday Night Lights and how tough it is for a show telling quiet human moments, etc., in “an age of franchising.” Her point raises an interesting question–that some genres which focus on the dynamics of a whole community and interpersonal relationships for instance (like a soap opera) has struggled with exactly how to apply such immersive storytelling…Elana Levine has written an interesting piece about how General Hospital tried to expand using blogs from characters and ran into all sorts of creative challenges that made the extensions frustrate more than engage fans more deeply in the process…But I think the mistake some have made is to think that some genres…or some viewers…wouldn’t be open to that type of storytelling. Instead, perhaps, soaps could have gained traction by having a website that acts as the daily newspaper for Salem or Oakdale or Genoa City…showing what the crazy exploits of characters on the show would look like from the publication, but also highlighting the lives of public officials; the school system; etc., that doesn’t even appear prominently on the show. And perhaps fans would be interested in playing the role of reporters. (I’ve made this up as an example in the past…Don’t know if it would take off in reality, but it seems to stand a much better chance than soaps ruining part of the fun of watching and giving us access to characters inner thoughts through a diary, etc.) Pro wrestling is also interesting in this regard…They’re particularly poised to create a totally immersive fictional world, because their characters are also “real people,” are active on social media, are really traveling the world, etc. I think they’ve only scratched the surface of what they could do at WWE.

    • chrisdorr

      Hi Sam, Thanks for adding your observations.  I very much agree that some genres are easier to figure out than others. I think as this form of storytelling increases, (which it will) other types of stories will be created, extended and shared. It will be exciting to see how this develops.