NEW YORK — Despite the industry’s vow to change its often extravagant ways, the movie ad-spending spi-ral shows no signs of abating.
Studio spending on ads for theatrical films topped $1.68 billion in 1996, up 20% from 1995, and the key network TV category showed a much larger hike, gaining 35% to $665 million, according to new figures from Competitive Media Reporting. (The monitoring service tracks outlays for TV, magazine, newspaper, radio and outdoor ads, but doesn’t measure creative and production costs, promotional expenses or spending on theatrical trailers.)
It’s worth noting that the major studios often justify the amounts they spend on TV advertising by noting they are not only building an audience for theatrical release. With overseas box office, merchandise and video revenue also to be factored in, the majors look at TV blurbs to promote a whole franchise.
Buena Vista again proved the top-spending distributor, with a $362 million war chest, followed by Sony, Warner Bros. and Paramount, the same order as 1995. Twentieth Century Fox took fifth place from Universal, with U ac-counting for just two of the top 40 films ranked by ad spenders.
The escalating cost of movie marketing isn’t new. But it’s gone unchecked in the past few years, accelerated in the past few years by the rise of big-budget films that demand huge opening weekends and by the strong TV advertis-ing market, which has dramatically increased rates even though ratings have declined. That forces studios to spend more just to stay even.
And the TV webs have gained most, trading on demand by free-spending movie studios to keep their unit rates high for others. After Fox spent $1.1 million for a Super Bowl spot last year to promote its summer blockbuster “Independence Day” — six months before the film’s release — three other studios followed suit in 1997, adding more than $7 million to the Fox network’s coffers in one program.
Million a minute
“It’s a very strong category for us,” said Larry Hoffner, president of sales at NBC, which gets the highest share of studio spending, even by rival network owners Disney and Fox. “The exposure they get in certain kinds of programming they’re looking for” is crucial to a marketing plan, he said, and justifies the top-drawer rates com-manded by shows like “Seinfeld,” which averages $1.1 million a minute.
The good news is the perception that “there was some reduction in vanity spending,” said Mark Gill, president of marketing at Miramax Films. “There was probably not as much of double-trucking (newspaper ads) as you saw before, and certainly less of the 60-second primetime spot. It seemed like there was some return to more sensible, effective spending,” Gill said. “When you have costs that are as big as they are across the industry, there’s got to be pressure to be saner about it.”
But others believe the competitive and increasingly crowded distribution pipeline continues to raise the stakes, and with opening-weekend grosses more important than ever, some studios will spend whatever it takes to buy them.
Condemning the lemmings
“It does appear to me that some people are not being very sensible about what they’re doing,” said Robert Levin, president of worldwide marketing for Sony Pictures Entertainment. “They’ll say, ‘We’ll spend whatever it takes to dominate the marketplace.’ But hopefully, as an industry we don’t treat it as a fact of life, because if we do, we’re all going to go over the cliff together.”
If there’s some consolation, it’s that fewer heavily advertised movies last year failed to earn at least respectable re-turns on their marketing investments.
In 1995, Paramount’s “Sabrina” and Buena Vista’s “Nixon” and “Judge Dredd” were backed by about $20 million apiece in paid media support, but had weak showings at the box office. “Nixon” grossed just $13.5 million.
This past year, the only major dud — at least relative to big-bucks marketing support — proved to be New Line’s “The Long Kiss Goodnight,” which took in just $33.4 million but spent nearly $18 million on advertising.
For most of the rest, it’s easy to say in hindsight that money was well spent for films that opened strongly. Al-though Disney’s budget for “Ransom” fell far short of the $35 million it put behind “Toy Story” in late 1995, the Mel Gibson kidnap thriller spent its way to a $34 million opening weekend, easily outgrossing its $25 million ad investment. And the $20 million ad budgets for “Independence Day” and “Twister” now seem bargain-basement, given the huge returns both films generated.
“The numbers are meaningless if you don’t take them in relation to profitability,” said Bobbi Blair, a former Disney media buyer who now heads BBI, a film-marketing consultancy. “If it’s a huge return on investment, who cares what you put in? It’s what you get out at the end that makes the movie business.”