As ad rates slip, studios seize opportunity
In some cases, adversity can become advantage. Like in ads during these days of fiscal crisis.To bring in revenue and stay competitive, TV networks, magazines and online outlets have cut ad rates. In the short term, this will help studios get more bang for their marketing bucks. But in the long run, TV, the Internet and magazines are hoping they’ll see an increase in eyeballs from a stay-at-home public, boosting ad rates to their former glory. So, despite the crisis, everybody wins. At least that’s the theory. Studios were reining in promo costs, but the newly lowered ad rates mean more buying power for their whittled-down budgets. That’s especially good news for Hollywood marketers with a glut of holiday releases. Studio execs have been worried about the rising costs of marketing (with TV being a key factor in those budgets). But the studios will likely increase the number of ad buys due to the year-end rush of films on the bigscreen — and increased competition from DVDs, as consumers will be increasingly likely to rent films in a tight economy. The amount of money spent on entertainment outside the home and changes in the types of entertainment consumed at home could drop as much as 15% in the U.S. this year, according to a recent report by Solutions Research Group. Networks don’t want to lose studio ad dollars: The entertainment sector spent $5.41 billion last year, representing 3.6% of overall ad buys. With studios already cutting back on the number of pics they produce and shuttering speciality banners, they won’t be shelling out more money for marketing. Even so, moviegoers could be seeing a lot more pic promos than they’re used to at this time of year. “We’ll be taking advantage of all the opportunities we can,” says one marketing exec. Networks are already going after more movie ads after the Academy of Motion Picture Arts & Sciences decided to allow the studios to blurb future pics during February’s Oscarcast on ABC. That should prove a good buy, given the millions the show attracts. But marketers will be looking for even better deals. Expect a larger percentage of movie marketing budgets to be spent online as studios look to reach moviegoers — especially youthful ones — via the Internet. MySpace, for example, is the top online destination for 15- to 24-year-olds looking for info about new film releases, according to Nielsen NRG. TV networks will be encouraging studios to buy spots not only on TV but also on network-owned websites that stream full-length series and feature their own commercial breaks and sponsorships. Marketers will promote more last-minute tie-ins to their movies, selling a high-profile association with a film as a prime way to connect consumers with products. Only time — and the bottom lines of the studios — will tell if the increase in promos helps. If the economy worsens, consumers are more likely to stay home and away from the local megaplex. If that happens, they’ll be watching more TV, resulting in higher ratings for the networks — something that would eventually boost ad rates again. “We want people to stop watching TV and go out and see movies,” says one studio media buyer. “But we need people to see our ads on TV. That’s always been a problem.” For now, if you’re a media buyer, it’s not a terrible problem to have. If you’ve got the money, that is.