Social networking websites like Facebook are on Hollywood's radar for niche internet advertising

While the old standbys of television and radio continue to hog most of the money that studios spend on marketing campaigns for new releases, more and more money is being allotted for internet and mobile markets. The recent success of Paramount’s internet marketing for Paranormal Activity, for example, shows what can be done when the right demographic is reached through these digital means.

Facebook in particular allows studios to reach niche markets which correlate to their new releases much more effectively than simply advertising on demographic-related TV channels. Such a strategy is one way of spending smarter, which is exactly what the new focus on digital outlets is all about. Reportedly, the change allows studios to spend just as much money as ever on marketing their films, even though the poor economy has forced them to cut talent costs, reduce the number of films made, and let go a number of staff members.

Television and radio still take up around 60-70% of marketing budgets, but the percentage spent on digital outlets has risen from 1% (2002) to 8-12%, and continues to grow. Avatar‘s marketing budget (estimated to exceed $150 million) reportedly allotted 10% toward internet ads alone. That’s over $15 million.

Niche marketing is nothing new, but Hollywood’s growing concentration on using digital outlets to take advantage of this strategy could mark a big overhaul in future film marketing in general.

Source: Variety

Quick Opinion: All of this seems well and good at first glance, however one wonders once the economy recovers if talent costs will rise back up and staff positions get refilled, or if the percentage of money spent on marketing stays the same. The success that’s possible due to the help of digital outlets could be too tempting for studios to not continue spending as much as they are.

Also, more money spent on internet and mobile ads means less ad money spent on newspapers and magazines, which are already hurting. Thinking pessimistically, this could be the final blow for big paper-based publications, forcing those companies to try and survive completely on the internet.