The effectiveness of post-release movie advertising

Adam D. Rennhoff

Middle Tennessee State Unversity

Kenneth C. Wilbur

Fuqua School of Business

Introduction

Recently, considerable attention has been given to the impact of advertising on returns (e.g. Duhan & Sandvik 2009; van den Putte 2009) and consumption (Wilcox et al. 2009). Clearly, research on specific product categories and the return from advertising is needed. The motion picture industry is an area conducive to research on the return from advertising. Movies are experience goods that are typically distributed sequentially across platforms, starting with short periods of theatrical availability. Frequent new product introductions and rapid turnover lead movie studios to advertise heavily. Studios spent US$3.7 billion to advertise their movies in 2003 (TNSMI 2006), leading to $9.5 billion in US box office receipts (Motion Picture Association of America (MPAA) 2005). This advertising:sales ratio of 0.39 is among the largest of all US industries (Schonfeld & Assoc. 2006).