Hollywood is notorious for wildly inflated production and marketing budgets. In 1980, the average cost for marketing a Hollywood flick was around $4 million (which translates to about $12 million today). By 2007, the average marketing budget for studio films had reached $36 million , which doesn’t even account for Hollywood’s biggest blockbusters spending over $100 million on their marketing campaigns.
That’s an astronomical investment just to get people’s attention and turn them on to a new movie.
Given that Transformers: Age of Extinction was marketed successfully in China to the tune of just $5 million, it makes you wonder why the studio spent $100 million for marketing the same film in the U.S.
From a general marketing perspective, you might see the same disparate spending levels in PPC. Since Google launched AdWords in 2000, it has grown to more than one million advertisers , generating tens of billions of dollars in revenue for Google . That level of spending doesn’t even account for what brands are spending on ads in social media and other search platforms like Bing.
Some advertisers spend six figures on PPC advertising, while other marketers only spend a fraction of that and see similar success in their metrics – much like the Hollywood movie campaigns. So what can advertisers learn from the impact of mammoth marketing budgets on audience engagement from Hollywood?
1. Big Budgets Don’t Equate to Success
There’s no shortage of box office bombs, and what makes them particularly stand out is the massive amount of spending on production and marketing compared to revenue generated at the box office. For example, the 2013 film The Lone Ranger cost nearly $250 million to produce and market . Unfortunately, the studio ended up losing over $100 million on the movie, primarily due to its bloated marketing budget.
On the flipside, the horror flick Paranormal Activity cost just $15,000 to produce, yet it generated $193 million at the box office.
Throwing money never guarantees success, especially with PPC campaigns
For PPC, too many companies put tens of thousands or more into campaigns that end up generating a measly 2% conversion. Rather than testing and improving their ads, they throw more money behind the existing campaign because “it’s still converting.”
The problem with that mentality is that sure, it might be converting, but it’s probably not converting enough customers to cover what you’re spending. If you’re lucky, you’ll eventually break even.
Don’t just accept whatever conversion rate you get and keep funneling money into mediocre ads. Constantly aim to improve conversions by split testing your PPC ads .
2. Get Creative with Visuals
Movies are visual experiences, so Hollywood relies on the best visuals from an upcoming film to hook a prospective audience. Bombastic and gripping movie trailers and print media generate hype and promise something amazing on the other side of the theater doors.
While traditional, text-based ads in search don’t account for visual content, display ads in Google’s extended network and over social media allow advertisers to leverage the power of visuals to reel in prospective buyers.
Great visuals tell compelling stories and boost click-through rates ( Image Source )
Social posts with images get more than double the engagement than those without images. This includes boosted and sponsored posts, and using video for your social strategy is just as effective. Shoppers who watch a video are nearly twice as likely to make a purchase .
Better yet, native online video ads can generate an 82% brand lift among prospects exposed to the ads. So you might not win the click right away, but you might entice a customer to come back later. There’s always the benefit of growing awareness.
3. Writing Matters
There are have been some big-budget Hollywood flicks full of A-list actors that were absolutely terrible . I’ve definitely cringed at a few of these in theaters. At this point, when I see a movie advertising a huge cast with a dozen well-known actors, I’m inclined to stay away.