The Secrets of Successful Online Movie Advertising

If you want to be a successful filmmaker, you better learn a thing or two about online movie advertising.

The reason I emphasize online movie advertising is because most movies end up in some sort of video on demand platform. And because many of the most popular platforms exist online, selling movies on the internet is very similar to selling anything online

This means you now have the ability to create online movie advertising campaigns to drive people to your point of sale.

If you’ve been reading my filmmaking stuff for any length of time, you know I’ve been sharing similar advice with filmmakers for years. I first published my thoughts back in 2010 – Here’s the article called Financing Movies With VOD Sales Projections. As you’ll read in the comments, most people thought I was crazy.

Fast forward to a recent job interview with a well known distribution company. I kid you not, the whole conversation revolved around this thing called conversion science.

“Jason, WTF is conversion science? I’m a filmmaker. I failed science!”

Look. I am trying to help you. You’re obviously reading this because you want to know the secrets of online movie advertising. And I’m telling you, the big secret is this thing called conversion science.

Online_Movie_Advertising

The Secrets of Online Movie Advertising

Here’s the thing about business (that most filmmakers ignore). Everything in business is measured in profit and loss. So if you spend money for online movie advertising, you better get that money back, plus a profit on top.

So here’s the question: How do you know if your online movie advertising is working?

This one is simple. You track your advertising campaigns. If you make more money then you spend, you’re doing OK. But if you start throwing money into an online movie advertising black hole, you have a BIG problem.

And before we get too crazy, there is something you need to know.

The whole reason you want to do your homework is so you don’t end up depending on the glaringly flawed and totally outdated distribution strategy:

“Gee, I sure hope we get into a film festival and garner a great deal.” 

Hope is not a sustainable business strategy. It is a lottery. And it’s outdated.

Online Movie Advertising Formula

Whenever you think about your movie advertising strategy, it helps to think about some real world scenarios. And because we are talking numbers, I am going to share a basic direct marketing ROI (return on investment) formula.

Here are the MAJOR Filmmaking Challenges:

  1. With no promise of pre-sales, or minimum guarantees in a traditional distribution deal, how do filmmakers justify a budget large enough to pay freelance day rates, while at the same time project enough direct DVD and VOD sales to recoup the initial investment?
  2. And assuming only 1% of your website visitors buy your movie, then how many people must visit your website so that 1% recoups your initial investment? (Don’t forget to include marketplace costs.)
  3. How much will this cost in advertising?

Here is a formula you can test and tweak. Plug in numbers and play around with assumptions.

U = Unit Sales Goal.
A = Amount you pay advertiser per website visit.
C = Projected conversion percentage rate.
X = Number of Visitors Needed.

(X)C = U
EQUATES TO: X= ?
THEN:  X(A) = ?

If all of that seems like a bunch of gobbledygook, you’re not alone. In the real world, most marketers utilize software, an online calculator and spreadsheets to help clarify assumptions.

But here’s the rub.

When you actually crunch the numbers on a One-Million dollar budget by selling $20 dollar DVD’s in Amazon (which is a totally high price), and you rely solely on Pay Per Visit advertising at $.05 cents a visit – Even if you’re lucky enough to garner a 1% conversion, you would need to sell 100,000 units (which allows for a 50% marketplace fee).

Or to put it another way, to get these results, you would need 10,000,000 targeted visitors, visiting your website.

Yes, ten Million people! Which is outlandish… 

This means you will have to think very carefully about your movie budget, marketing budget, your distribution strategy and obviously, you’ll need to make sure your movie actually has a market large enough to support the budget.

If you would like to start planning your distribution, you might want to check out my “How To Sell Your Movie” program.

Comments

  1. Patrick says

    I think the simpler way to look at conversion ratios is this:

    If you spend 5 cents on a “click” and you get 1% of “clicks” to purchase you product, it costs you $5 to achieve that purchase via that advertising.

    Now the question is if that’s profitable or not ie. does the selling of that product generate $5 or more to you after all associated costs. In our indie film world it most likely wouldn’t, since we would most likely be selling digital VOD rentals for a price of roughly $5 (after platform 10%-30% n expenses less than $5 profit).

    So now we have either sell a more expensive product ($10 VOD DRM free VOD download) or we need to improve the original conversion ratio ie go from 1% to 1.5% or 2%. In order to do this, you would have to really need a highly targeted market, which goes to your point Jason for the need to have a great “Hook”.

    I think the real question is, after a well defined hook, what are the best marketing platforms for films to use ie, Facebook, Twitter, Google ads?

    who are the best marketing service providers to use???

    Thanks again Jason for an awesome post.
    Patrick

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