Dear CMO:
Congratulations are in order, I believe, for your recently announced multi-tiered, pan-regional, symbiotic multi-picture licensing deal. I’m sure your Hollywood-insider-agency has represented your interests well and has taken your financial interests to heart so you won’t get fleeced before it’s all over.
Yes, fleeced is a harsh word and an unfortunately often unavoidable condition. Sometimes “mugged” is more appropriate, at least when brands go flirting with Hollywood studios like big-eyed lil’ country girls in the big city for the first time. Hey, I know, it’s tremendous fun, you feel like a big shot, you took a look at the SCRIPT for gawd’s sake and met a lot of really, really great people who will be friends forever.
And somewhere along the way, you lost your wallet.
But enough about all that. How was the trip to LA?
I know, you aren’t sure if you should be sitting on the sidelines, forlornly handing out a check every quarter to your product placement agency or getting in there with the big guns and dropping millions on a major deal with the biggest summer blockbuster since Gone With The Wind. You can go either way and I recommend neither.
Let me tell you a true story. I was sitting in the Red Rooster brewpub many years ago in Odgen, Utah, having dinner with my then-boss. This was in my Iomega days. We were talking about how you get more people to buy Zip disks and I turned the conversation to Hollywood. It was a rebate world back then, so anything out of that rut was new to the company and most of the industry. I had come out of Sony, where we pushed this envelope pretty hard. Our promotions were bigger news than the products on which they were carried. My preconception here was that the way you sold more Zip media — or pretty much anything else — was to add a lot of sex appeal to a boring product, borrow a lot of someone else’s brand equity, and ride the resulting wave over the POS scanner at the cash register.
In this case, it meant promoting with unique content on the disk, movie tickets, music, maybe a wearable. All this was an unusual way of selling data media products at the time.
His reaction was pretty unusual, too.
He looked like he’d been physically struck between the eyes and with food falling out of his mouth began a semi-incoherent speech, quickly increasing in volume, about getting in front of the board of directors by tomorrow morning and embarking on a Dr.-Livingstone-seeks-the-source-of-the-Nile multi-city tour to sell the idea to the channel. Other diners were now studiously avoiding eye contact and were beginning to physically shy away from us, no doubt fearing that they would somehow be dragged into this expedition, perhaps carrying displays, sherpa-like, through Dallas-Ft. Worth Airport. Then, he began to rise from the table, pulling the tablecloth with him because he had tucked it into his pants. I grabbed my beer as it headed towards the edge of the table, sat him down and told him the one thing that ruined the whole deal:
What if the movie bombs?
Now, we all knew the movie wouldn’t bomb because it was a sure thing. It was going to redefine Hollywood, push the boundaries of integrated entertainment marketing and be the biggest licensing bonanza in any of our lifetimes. It was beyond the risk of bombing.
Movies like Godzilla just don’t bomb. And therein lies the moral of the story.
In case you missed it, or didn’t read about it, or through a few years of successful therapy have finally blocked it out, Godzilla was a bomb. And if a sure thing like Godzilla can bomb, who amongst us is safe in the entertainment marketing world? Do we all have to be able to predict the future? How can we make it work?
Good news. You can make it work. Without the crystal ball.
You, as with all your brethren CMO’s, have to justify the money you spend, including the sticky part about selling more product. Can I give you a bit of advice on how to further your Hollywood dreams?
Rule #1:
Everything you do is about selling more stuff. Not “getting more buzz”, “generating more impressions”, or “having more cocktails”. Sell something. I know, it’s hard, but you need to do this. You will have fewer angry people around the boardroom table if you nail this one. Everything you spend money on needs to help sell-through. Pay attention to incremental merchandising — more ads and off-planogram in-store inventory. And if your property and offer are strong enough, you shouldn’t be paying for any of this. If you don’t get the merchandising, you shouldn’t be offering your channel partner the promotion. Give them generic inventory and move on to the next guys.
Rule #2:
Do just enough to get what you want out of your customers and your channel, then slam your wallet shut. Spend as little as necessary. Yes, you need to get the consumer’s attention with enough of an offer to be an effective tie-breaker. But an in-line promotion is useless. You need in-store heft. Here’s the acid test: how little do you need to spend on the consumer offer to get the channel to give you incremental merchandising? Here are two ways to do this. First, manage the trade-off between the expensive immediate gratification of an on-pack with the relatively cheaper delayed gratification of a mail-in. Second, understand the economics of your promotional options, from the theatrical release to home entertainment, video gaming, and music. Offer enough to get the consumer’s attention and the channel’s real estate. Nothing more.
Rule #3:
A sure number 2 is better than a crap-shoot that might be number 1. Oh, Lordy, this is important. A property with a built-in audience is safe. You want safe. You will be pitched properties that even family members of the studio marketing people wouldn’t touch. Be strong. Hollywood believes in ‘safe’, too, because they are investing heavily in franchises. Spiderman is safe. Bond is very safe, even with a new Bond. If Men in Black 2 had been successful, there may have been something there (it wasn’t, which is too bad). Who knew Transporter 2 would do so well? And how about Fast and Furious, now in its third adaptation? I passed on I Robot and could have kicked myself, but not really — it could have gone either way. Terminator 3, however, was easy.
Rule #4:
Give them what they can’t get. Provide what the studio doesn’t have or can’t easily get. This can mean reach, channel breadth, or relative market strength. If you can’t do this, you make up for this with envelopes filled to the brim with cash. Best to do the former and pay as little as possible.
Rule #5:
Contingency planning is everything. Film release dates move and actors get fired, hurt and occasionally killed. Your channel doesn’t care. Have something in your back pocket in case disaster strikes. You may find allies in other brands promoting the same film. I was in trouble when Last Action Hero blew up years ago and had Burger King, another partner, ready to step in. I kept the same merchandising dates with my channel and ran a very successful promotion without losing a step. (It’s funny, but I still get that facial twitch when I say, Last Action Hero — yikes, there it is again…)
Rule #6:
Plan very, very early. Then, get it in writing. On January 1, Target is planning out their post-holiday plans for the next year. Office Depot is planning out Dads and Grads, and probably back to school. Hollywood is still moving release dates in March. This is a real problem if you’re trying to get a contract signed. Which I like to do. Get inside the planning process. If you need help with this, get it from the studios and intermediaries like product placement agencies. Getting in early often means the difference between launching a fully integrated promotion and just paying a lot of money to offset the cost of the
film.
Rule #7:
Herd your geese. Get alignment with your sales organization, your channel, and your executive management. This sounds obvious, but it’s incredible how often great promotions fail because the “guys in sales” thought they were supposed to be selling something else. Next, get integrated. Product placement, PR, website, sales incentives, international roll-outs, everything — put all the wood behind the arrow. Last, keep the shelves clean both in your warehouse and your channel. Can you sticker product without creating custom packaging? Can you remove the promotional elements in-store after it expires? Your operations people and your channel partners will love you if you plan this well. Remember that the time will come when you need to deal with what’s left over.
Rule #8:
Leave before the party’s over. The best entertainment promotion is one that is over before opening weekend. Leverage the hype and sell product while there is excitement in the market and you won’t need to worry about box office results. Ship the promotion when the studio’s marketing starts, ride the momentum of their marketing spend, allow consumers to get excited and then give them time to forget to redeem as you move on.
You can do this right. It just takes nerves of steel, the ability to say no to a lot of very charming people and a ton of planning. But you will live to fight another day, which is important. You will not only make a lot of money, but you will not lose a lot of money, which is almost as good. Too many of your erstwhile peers do this wrong. Be a maverick, leave nothing on the table, and seize the financial returns that are yours.
“Why not just do the rebate?”, you ask? You don’t ask this, but here’s an answer in case someone in sales does ask it. Look vaguely disappointed in the speaker, pause for an uncomfortably long time, and then say, ‘entertainment promotions transcend your brand and capture the imaginations of your consumers far beyond their experience with your product. The same is true of the channel. Your buyers look at you with glazed eyes when you talk about rebates but they get excited about James Bond.” Always end with a Bond reference. It always works. And, it’s all true, so say it with conviction. And remember that entertainment is a wholly more profitable and brand building experience than pushing promotional crack.
Cheers and regards.
Copyright © 2006 Stephen Denny
