The effectiveness of post-release movie advertising

Frequent new product introductions and short product life cycles lead to unusually high levels of advertising in the movie industry. We study the effectiveness of television advertisements aired after the theatrical opening of a motion picture ('post-release advertising'). We estimate an i...

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Bibliographic Details
Published in:International journal of advertising 2011-01, Vol.30 (2), p.305-328
Main Authors: Rennhoff, Adam D., Wilbur, Kenneth C.
Format: Article
Language:English
Subjects:
Advertising
Advertising expenditures
Advertising revenue
Effectiveness studies
Motion picture industry
Motion pictures
Television advertising
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Summary:Frequent new product introductions and short product life cycles lead to unusually high levels of advertising in the movie industry. We study the effectiveness of television advertisements aired after the theatrical opening of a motion picture ('post-release advertising'). We estimate an instrumental variables, lagged effects model using a novel dataset constructed to obviate simultaneity concerns and temporal aggregation biases. We find that post-release movie advertising exhibits a high degree of heterogeneity across films, but generates substantial returns for some movies. Our findings suggest that studios may find it beneficial to experiment with higher post-release advertising budgets. Further, exhibitors may benefit from extended movie life cycles if they share post-release advertising responsibility with studios.
ISSN:0265-0487
1759-3948
DOI:10.2501/IJA-30-2-305-328