SALT LAKE CITY -- According to research led by a marketing professor at the University of Utah's David Eccles School of Business, film studios might be better served with more targeted advertising that takes into account the movie-going habits of different communities, as well as how those communities respond to paid advertising and movie-review blogs.
Shyam Gopinath, an assistant professor at the David Eccles School of Business, worked with the University of Chicago's Pradeep Chintagunta and the University of North Carolina's Sriram Venkataraman on the study - "Blogs, advertising and local-market box-office performance" - which was recently accepted for publication in Management Science.
The research team looked at the box-office performance of 75 films--the top-grossing movies of 2004, representing more than 90 percent of the revenues generated by all movies that year--across 208 U.S. markets, measuring: the effects of pre- and post-release blog posts about the films; how many blogs were posted about a given film and whether those blog posts were positive or negative in tone; and the advertising spend studios allocated to promote those films.
The study's noteworthy findings include:
Film studios advertise their movies the same way from coast to coast, in cities large and small, hoping to draw huge audiences for opening day; 90 percent of a movie's revenue is generated on opening day and the following month.
"The results of this study show that studios are limiting the potential of their films' box office success," said Gopinath. "The inefficient, blanket approach in place at many studios fails to take into account the diverging media consumption preferences and diversity of audiences across the country. With a more targeted approach that tailors marketing and social media efforts to specific markets, studios can see greater return on investment from their nationwide outreach."