Entertainment Marketers Can Accelerate Online Word Of Mouth To Boost Revenues, According To Forrester Research
As fall approaches, entertainment marketers are gearing up for a season packed with blockbusters, bestsellers, and several new music and video game titles. While most Web-marketing budgets promote prerelease awareness using flashy sites, new online-marketing tactics hold enormous promise for Hollywood, book publishers, and the rest of the entertainment industry, according to a new report by Forrester Research, Inc. (Nasdaq: FORR). “Bigger Hits With Net Marketing” demonstrates how the industry can accelerate online word of mouth and control post-release buzz to increase sales by as much as 100%.
According to Forrester’s interviews with 21 top entertainment companies, entertainment marketers are struggling to use the Internet to its maximum marketing advantage. They are willing to employ Internet strategies when they feel the demographic match is right, but they’re not expecting big Internet-driven change.
“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 Eric Scheirer, analyst at Forrester Research. “By shifting just 1% of a marketer’s Web budget to fund online word-of-mouth efforts, entertainment companies can help move consumers through the product consideration and buying cycle faster — doubling a book’s sales or boosting box office grosses by as much as $15 million per film.”
Studios and design shops commonly spend $200,000 or more to build bloated Web sites for new entertainment offerings. These sites often confuse or frustrate visitors. By spending remarkably little (even 1% of their online budget), marketers can reap big returns by encouraging consumers to actively contribute to a dialogue online about a variety of entertainment products. Forrester believes that marketers should invest online-marketing dollars to foster online discussion, accelerate word of mouth, and speed up customers’ awareness-consideration-purchase cycle.
“Traditional word of mouth is sluggish and limited to the number of people each individual knows,” added 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.”
Forrester has developed an interactive cost model that allows marketers to determine their return on investment for their word-of-mouth campaigns. The model allows for differences in the medium and where a product is in its life cycle. Despite differences in marketing budgets and the importance of sustaining audience relationships over time, Forrester recommends that each entertainment vertical adopt a disciplined online-marketing approach — not today’s scattershot experiments. The report details examples of this approach in action and its key principles: 1) pursue authenticity by accelerating word of mouth; 2) use ads and fan sites to extend reach; and 3) refocus Web sites as information sources.