The Effectiveness of Post-Release Movie Advertising
Adam D. Rennhoff
Middle Tennessee State University
Kenneth C. Wilbur
University of California, San Diego (UCSD) - Rady School of Management
April 13, 2010
Frequent new product introductions and short product lifecycles lead to unusually high levels of advertising in the movie industry. We study the effectiveness of television advertisements aired after the theatrical opening of a motion picture (“post-release advertising”). We estimate an instrumental-variables, lagged effects model using a novel dataset constructed to obviate simultaneity concerns and temporal aggregation biases. We find that post-release movie advertising exhibits a high degree of heterogeneity across films, but generates substantial returns for some movies. Our findings suggest that studios may find it beneficial to experiment with higher post-release advertising budgets. Further, exhibitors may benefit from extended movie lifecycles if they share post-release advertising responsibility with studios.
Number of Pages in PDF File: 28
Keywords: Advertising Effectiveness, Advertising/Sales Response, Econometrics, Endogeneity, Movies and Entertainment Marketing
JEL Classification: M37
Date posted: January 22, 2007 ; Last revised: September 14, 2010
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