The Effectiveness of Post-Release Movie Advertising

28 Pages Posted: 22 Jan 2007 Last revised: 14 Sep 2010

Adam D. Rennhoff

Middle Tennessee State University

Kenneth C. Wilbur

University of California, San Diego (UCSD) - Rady School of Management

Date Written: April 13, 2010

Abstract

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.

Keywords: Advertising Effectiveness, Advertising/Sales Response, Econometrics, Endogeneity, Movies and Entertainment Marketing

JEL Classification: M37

Suggested Citation

Rennhoff, Adam D. and Wilbur, Kenneth C., The Effectiveness of Post-Release Movie Advertising (April 13, 2010). Available at SSRN: https://ssrn.com/abstract=1106932 or http://dx.doi.org/10.2139/ssrn.1106932

Adam D. Rennhoff

Middle Tennessee State University ( email )

P.O. Box 27
MTSU
Murfreesboro, TN 37132
United States
615-898-2931 (Phone)

HOME PAGE: http://mtweb.mtsu.edu/rennhoff

Kenneth C. Wilbur (Contact Author)

University of California, San Diego (UCSD) - Rady School of Management ( email )

9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States

HOME PAGE: http://kennethcwilbur.com

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