Advertising media strategies in the film industry

Abstract

The primary aim of this article is to estimate the multiple determinants of film advertising expenditures in four important media, namely television, press, outdoor and radio, in the UK. First, television advertising, the leading film advertising medium, is examined as part of a system of equations, capturing the interdependences between advertising, the number of screens on which films are initially shown and box office revenues. Then a reduced form model is put forward to reveal the determinants of film advertising in the four media. While major distribution companies have different preferences for the use of the alternative advertising media, results highlight the importance of quality signals, such as critical reviews, in determining advertising expenditures in the film industry. Moreover, advertising expenditures can themselves be considered to offer potential cinema goers signals of film quality.

Acknowledgements

Many thanks to participants of the Media and Communication Conference, Applied Econometric Association, Paris 2007 and an anonymous referee for very helpful comments. Any errors of course remain the responsibility of the authors.

Notes

¹ The Rotten Tomatoes website, www.rottentomatoes.com, performs a similar function for the US audiences (Brewer et al., 2009).

² Results are available upon request.