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Hollywood Online Ad Spending

Movietown meets “Mad Ave.”

Movie studio advertising spending is going up and going online.

eMarketer estimates that slightly more than $16 billion will be spent by movie studios on ads in 2009, climbing to $18.6 billion in 2013.

An increasing share of the movie advertising spend is heading to the digital sector—$1.2 billion will go to digital ads in 2009, and in 2013, online ad budgets will grow to $2.7 billion.

US Online Advertising Spending by MPAA-Member Studios and Their Subsidiaries, 2008-2013 (millions, % change and % of total)

There are many reasons for movie marketers moving to digital.

The US movie industry is a big business, but growth over the past 10 years has not been spectacular.

Attendance has remained mostly flat—around 1.4 billion yearly admissions—since 1999. Box office revenues, which reached $9.3 billion in 2002, hit only $9.8 billion last year.

US Movie Theater Box Office Revenues, 1999-2008 (billions)

The only substantial increase (as any moviegoer can tell you) has been in the price of a ticket.

According to the “2008 Theatrical Market Statistics” report, from the Motion Picture Association of America (MPAA), movie ticket prices have risen from an average of $5.08 in 1999 to $7.18 in 2008. There is a limit to the amount theatergoers can be charged, but these ticket price increases are not expected to abate in the coming years.

The NPD Group estimates that US residents spend $160 per month on entertainment, with the bulk of it going to TV- and Internet-related services. And while 73% of consumers expected to spend the same amount or more on theatrical movies in 2009 as they did last year, with family budgets tightening, they might wait for “tent pole” features (such as “Star Trek”) to be released.

Obviously, there is overwhelming pressure on studios to create buzz, and online marketing has helped turn up the heat while keeping costs down.

“Today, virtually every film marketing campaign leverages traditional and new media channels, with applications such as social network profiles, widgets and recommendation engines becoming an integral part of the mix,” said eMarketer senior analyst Paul Verna.

In the future, even more sophisticated online marketing tactics will help marketers continue turning Hollywood glitter into box office gold.

Need more information on this topic? To be notified when the upcoming eMarketer report, “Digital Entertainment Meets Social Media,” is published, click here.


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