Study: Using the Internet To Create Hollywood Hits

With a crop of new film, publishing and music releases ready for harvest this fall, marketing executives in the entertainment industry should consider the Internet as a key tool to boost sales, forge online word-of-mouth campaigns and control post-launch buzz among consumers, according to a report released Wednesday by Forrester Research (Nasdaq: FORR).

As part of its study on "Bigger Hits With Net Marketing," the Cambridge, Massachusetts-based research firm concluded that by shifting just 1 percent of their Web budget to fund such word-of-mouth efforts, marketers can drive up a book's sales by as much as 100 percent and boost box office receipts by US$15 million per film.

Forrester said that one of the key advantages of employing an online marketing strategy is the ability to move consumers through the product consideration and buying cycle more quickly.

Despite the considerable earnings potential of Web marketing , however, the report said that many entertainment marketers are struggling to use the Internet to its maximum advertising advantage. Instead, many are still engaging in "scattershot" online marketing experiments.

Yes, But How?

"Marketers understand that the Internet and word of mouth can help generate buzz, but they don't know how to foster it to extend awareness of a product beyond its initial release," said Forrester analyst Eric Scheirer.

Rather than cultivating such awareness, the report said studios and design shops are investing heavily in building "bloated" Web sites for new entertainment offerings, routinely spending upwards of $200,000 of their online marketing budgets on flashy sites.

However, Forrester said the technological bells and whistles often wind up confusing or frustrating visitors.

Can We Talk?

The study said that industry marketers stand to reap bigger returns by spurring consumers to "actively contribute to a dialogue online about a variety of entertainment products" and accelerating their awareness-consideration-purchase cycle.

"Traditional word-of-mouth is sluggish and limited to the number of people each individual knows," said Scheirer. "But a single Internet post has the potential to instantly reach thousands of people worldwide who can respond online, in addition to telling their friends."

To drive a sustained online marketing campaign, Forrester said it is imperative for entertainment firms to adopt a three-pronged approach by accelerating word-of-mouth among consumers, using ads and fan sites to extend reach, and refocusing Web sites as information sources.

To compile data for its report, Forrester surveyed 21 top entertainment companies.