Week 5

This week, it’s survey time, and time for us to write blog posts on slightly different issues. I choose to glance over an article in the Journal of Marketing Research titled Dynamic Effectiveness of Advertising and Word of Mouth in Sequential Distribution of New Products. The PDF can be found here, if you have a subscription (you can purchase a 24-hour one, I did), and the executive summary can be found here, if you don’t feel like paying for it.

Honestly? The research itself may be way above my head. However, the goal was to determine how Word of Mouth advertising affected movie ticket sales for Hollywood. Effectively, in the 2-bit summary, WOM and traditional advertising have a strong tie in, to the point where more advertising actually increases positive WOM coverage, as opposed to decreasing it. Or at least it’s true at the beginning of the movie cycle, when the title and actors are announced for it, and then when the movie is just released. Advertising after that decreases WOM effectiveness, it starts waning in positive messages. The article also goes on to say that when there is less pre-movie advertising, the movie is likely to be out of theaters faster.

Thats…pretty close to what I expected, actually. Movies tend to do better when advertised well, WOM tends to be more prevalent when more advertising exists. This seems to not always be the case though, John Carter of Mars, a recent movie release from Disney, BOMBED because of WOM negative press, even though it was one of the more heavily marketed movies of the year.

Honestly? Would you agree with me that sometimes a survey like this is just there to justify a person’s budget or job? Or do you think it’s important to do a survey like this either way?

Secondly: WOM is effective even when 0 dollars have been used to market the video. With the advent of Youtube and social media, pretty much everyone could buy a video phone and post videos that end up being hugely successful, and that includes bigger budget movies. Do you think we’ll eventually see the end of Hollywood production facilities?

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4 Responses to Week 5

  1. Interesting final question, especially consider the crisis mode Hollywood is now in over tanking box office numbers across the board. I think that advertising starts the “conversation” and then WOM continues it. If the right combination of advertising, WOM, media coverage, and quality of production happens at the right time, WOM can sustain a movie a little longer than most.

    An interesting case study would be The Hunger Games. Months before the release of the film, fans of the books were treated to a very good trailer online, an virtual version of “The Capital”, and tweets from characters and “Capital” fashion designers. The conversation about the movie was nonstop. A well-timed second trailer and accompanying media a few weeks before the release kept it going. So really in terms of advertising dollars, producers spent money on a website, trailer editing, and not too much else. Really fans and actors like Elizabeth Banks did most of the work with WOM.

    To be honest, I think a survey can give valuable information, but social media and WOM may be the best form of survey these days. I don’t think we’ll see the end of Hollywood production facilities, but we will see a more level playing field for big and little productions alike – sort of like our conversation last week about little guys versus big guys on the web.

  2. alanyskpl says:

    I feel like large movie productions now a days spend a lot of money on several teasers then trailers then cast interviews then finally the movie. This is effective for some movies, however, not all movies benefit from the cost of these advertising methods. On the contrary, WOM seems to benefit a lot of indie movies and small celebrities that didn’t have the money to publicize themselves as much. A good example is recently a Korean star, PSY, uploaded a video on YouTube called Oppa Gangnam Style. Within hours, it went viral and people around the world were sharing it and tweeting about it. One million views later, celebrities were talking about him too. He got so famous here in the U.S. that he was invited as a presenter at the VMA’s and as a guest on SNL. He didn’t pay for any advertisement, social networking sites did it for him.

    I agree with Shannon that Hollywood production facilities won’t just fade into the distance. I’m sure they will still be hard at work pushing out various new advertisements. But with the rise of WOM and social networks, it will definitely allow the small fish to have a taste of the big pie.

  3. naseemspeaks says:

    That’s a good point about why surveys are conducted in the first place–to make a point that you already knew (or assumed). Especially when your budget, job, or ego is on the line at the office, a survey can justify why things didn’t go right. Plus, from what I can tell, you usually initiate a survey when things go wrong. For instance, an online retailer called Rue Lala began a new promotion that customers could pay $100 for unlimited free shipping for a year. I don’t think it went well at all. Who would pay that much annually for a shopping addition. As a result, Rue Lala distributed a survey to its clients a few weeks later. Surprise surprise. I think that companies like to conduct surveys when things go wrong, and should actually pay equal attention to when they get it right so they replicate what they’ve done and ensure their continuous success.

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