Summer usually means movie blockbuster time. But not this year. No summer 2001 movie release has held the top spot for more than two weeks. The Wall Street Journal recently proclaimed the summer of 2001 Hollywood's oddest summer in recent memory. "In some circles, embarrassed executives have even coined a term for this year's fare: the disposable movie," according to The Wall Street Journal (7/27/01). "'None of them captured the public's imagination nor did they compel people to go out and tell others to see them,' says Terry Press, marketing chief at DreamWorks."

Consider, as a case in point, DreamWorks own "AI," ballyhooed for almost a year and heavily promoted. It died within weeks. Negative word of mouth proved an insurmountable challenge for the film. Early viewers told their friends not to bother, in stark contrast to a film like "Titanic" when early viewers said they would see it again and again.

While this summer is a surprise to studio executives, it shouldn't be. For unlike many competitors in other product categories, the entertainment industry, movie and television companies in particular, use very crude approaches to product development. Oftentimes, "the product" is simply based on a deal made years earlier with a producer, director, superstar, or a way-out intuition by a studio exec about the potential for marketing deals with sneaker, toy, and fast-food companies.

This is particularly true in Hollywood where an anti-research mentality is as common as the belief in a flat earth was in the 15th century. In Hollywood, for example, studios rarely use serious concept testing (and we're not talking here about three focus groups or calling 100 invalids on the phone). Although after a movie is in the can, a studio will invite an audience of approximately 200 people to a prescreening in Los Angeles (as if Los Angeleans represent a cross-section of America) to gauge reactions to the film and better target marketing efforts.

Given the millions of dollars spent to promote a movie, their goal to better target marketing efforts is certainly laudable. Many movie studios have changed implementation plans as a result of their research—movies frequently open ahead of schedule when their prescreening research indicates a much more positive audience reaction than expected.

Unfortunately, most of their research occurs at the end of production when there's not much studios can do to alter a movie or show and they've already incurred tremendous costs. While some movies get a new ending (e.g., "Pretty Woman") and some TV shows get restructured mid-season (e.g., NBC's "Weber," formerly known as "Cursed"), studios can do little other than launch with lower expectations, less marketing, or less distribution, or toss the production into the circular file altogether. Little strategic analysis is done during the concept stage to determine whether the movie/show is likely to be a success among the consumers to whom it is being targeted.

Just how much does the entertainment industry miss on product development? Consider these facts: studios receive approximately 2,000+ story ideas and scripts each year; read or consider 200; start 40 projects; and produce 10 movies. Of those 10 movies, just one becomes a recognized commercial success.

Given the high costs associated with finding and developing movies and TV shows and the high probability of failure, it's no wonder sequels and remakes have proliferated at the box office this summer, and more networks look for line extensions of programs that have been successful in the U.S. and abroad (e.g., Survivor II, Big Brother II, XFL, Who Wants to Be A Millionaire, The Weakest Link). As Noah Davis, a reporter for Hollywood.com, recently commented, "Even if a sequel or remake fails, as many do, studio executives can throw up their hands to their corporate bosses and say, 'Hey, how could I have played it any safer?'"

Luckily for the movie industry, increases in ticket prices have offset the decline in ticket volume so they may miraculously top 1999's box-office record of $3 billion. But studios shouldn't count on this kind of divine intervention to sustain their industry for long.

"Studios insist they never aim for mediocrity and explain that this year many of their bets quite simply didn't pan out," according to The Wall Street Journal. Now there's some real marketing strategy. As in any industry, antiquated, intuitive approaches to product development and marketing will drag a company down in the long-run.


Top 10 All-Time Highest Grossing Movies
(Domestic Gross Receipts in Millions)

Source: MovieWeb.com

As the dot com hype clears, it's time to refocus Internet marketing. Businesses—and the advertising industry—need to stop obsessing over technology and production advances and take a closer look at how to tap into this medium for greater marketing effectiveness.

While banner ads pull just a 0.5 percent response rate, email marketing campaigns can still generate response rates of 10 percent, which is a considerable return compared to offline direct marketing, where a 2 percent rate is considered successful. Yet, like banner advertising, the novelty of email promotions is diminishing as in-boxes are becoming overloaded and consumers are showing signs of immunity.

Today, the biggest trend in Internet marketing can be labeled "That's Entertainment," or "Triple E" marketing for electronic, entertainment, and education. Done well—with equal emphasis on entertainment and education—it can be a winning formula for Internet marketing.

This year's biggest "Triple E" marketing campaign has been BMW's Digital Film Series, which has been both a word-of-mouth and public relations blockbuster. The German automaker used the four films, all directed by big name film directors, as showcases for its cars, which are the stars of each film. Yet the films are not traditional commercials: there is no overt selling and the name BMW is never spoken. There is, however, a clever sidebar called "Machines" for those interested in BMW features. (This is the education element of the campaign.)

Adobe, the multimedia software company, features only products—no actors—in the "Atmospheres" section of its site. These 3D "worlds" created with Adobe's Atmosphereä product allow real time chat, streaming sound, realistic lighting, fog effects, Java Script-enabled interactivity. In addition, in-depth product information is just a click away. Like BMW, this is a clever use of melding entertainment, interactivity and the company's products in a format extremely appealing to its target buyers

Taking more of a Double E approach is the increasing popularity of embedding multimedia ads directly into emails. This is an approach, for example, that Showtime used to get people to contact their cable provider for the Tyson vs. Golota pay per view fight. Initial results are impressive. Consider that animated emails, like Showtime's, are generating 30 to 50 percent more responses than traditional static emails. But as the novelty of the technique wanes, so will the success of Double E campaigns.

So how do you produce memorable and effective communications programs for the Internet? A seminal Advertising Research Foundation study found that the best predictors of sales effectiveness were attitudes toward the commercials: the more people like them and the more they learned from them, the better they work. Two items proved to be highly predictive of sales response. One was "This advertising is funny and clever," and the other was "Tells me a lot about how the product works."

Note that communicating information about the product or service is equally as important as humor. This is where online marketing campaigns can be particularly effective. Online campaigns can not only generate awareness and interest using clever, entertaining email, digital films and banner advertising targeted to your prospects, but they can also directly link consumers to specially designed site pages that provide information about the product in engaging and informative ways.

It's this powerful one-two punch that traditional television, radio and print advertising can't deliver, but for which the Internet is uniquely suited.

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In evaluating whether to keep or divest business units, executives and management consultants around the world employ the long-revered 2 x 2 strategic quadrant approach to analysis: industry segment growth (low/high) vs. business unit performance (low/high). If a business division falls into the "dog" quadrant—stagnant or shrinking industry growth and poor business unit performance—management usually sells it off or slashes it to a bare minimum.

This is a superficial approach to business analysis. Without talking to customers and prospects in an industry, you can't fully assess the problems and the potential of that business unit.

Copernicus recently assessed a "dog" business unit of a Fortune 1000 company. What we found surprised the CEO and management consultants alike. No supplier—including the client—was providing customers with what they wanted. We found that the unit had incredible potential to increase market share and actually increase prices up to 30 percent. That's right. If they could get the product enhancements and service they needed from a supplier in the category, customers would be willing to buy more and pay for the value.

The lesson is clear: without researching customers, a company cannot make sound business decisions. Ever.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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If you are in the market for a handbook to marketing problems— from the common to the complex— Kellogg on Marketing is the book for you. With a preface by marketing guru Philip Kotler and chapters by some of the world's leading marketing academics, the book offers a primer on marketing and brand management fundamentals such as targeting and positioning, as well as insights on tools and approaches to learning about customers and implementing strategies.

An excellent reference or quick-refresher for marketers at any point in their careers.

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At a time when a strong positioning has become even more critical to differentiating a brand, product, or service, positioning seems to be disappearing from marketing vocabulary. Ask five marketing managers to define positioning and you're likely to get five different answers. Many of the recent nonfiction bestsellers on the topic of branding don't even mention positioning. No where has the disappearance of positioning become more evident than in TV advertising.

We offer evidence of this brand-commoditizing trend in our new white paper, "Whatever Happened to Positioning?" and demonstrate its implications for marketers. Click here to download the paper or send an e-mail to info@copernicusmarketing.com to request a copy.

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