Last month the Golden Globes kicked off the Hollywood awards season. Even though Golden Globe winners have gone on to win the Oscar only 40% of the time, some believe that because of their Globe wins, The Revenant and The Martian have the inside track on winning the Oscar.
What awards can do for the marketing of any products
In addition to bringing in more revenue, there are many benefits to winning awards. The following are just some of them:
- Validation. Awards validate your brand and products. It gives buyers a reason to select yours over others.
- Credibility. The validation is credible because it comes from an independent, third party that has evaluated your product relative to your competitors.
- Brand. The brand equity of the award-giver is transferred to you. That is, the award has its own brand identity (Globes, Oscars, Emmys, Grammys, and JD Power), and you benefit from its brand strength.
- Uniqueness. Since there is usually only one winner, the award gives you a unique distinction you can promote in your marketing.
- Trust. As a result of the above, your target audience will believe and trust that your product is better because it won the award. It lowers their risk, and increases the chance they will have a good experience.
- Promotion advantage. Once you are nominated or win, you have a tangible reason to promote your unique achievement to distinguish you from competitors.
- Promotion leverage. Award sources and the news media will also promote your winning to further their own agendas, which can give you more credibility and substantial promotion leverage (via social media and viral word-of-mouth pyramids).
Oscars
Since Oscar is the premiere entertainment award, it is useful to look at how being nominated and winning contributes to the success of all those involved in making and distributing the movies being awarded.
The effect of the Oscars on movie release dates
To get the biggest lift in revenue, movies tend to be released and distributed in the last months of the year so that award winners can benefit the most from the big award shows as well as disc and online sales (historically 56% of Oscar nominees are released in November and December).
Cost of the statuette
The cost to make an Oscar statuette, which is made out of gold-platted britannium, is estimated between $500 and $900 - depending on the cost of gold, which, as of this writing, is $1,127 an ounce.
The payoff
Being nominated for an Oscar can translate to a huge payday for all those involved in making the film. Winning it can bring in much more. The Oscar is the iconic symbol of the Academy of Motion Picture Arts and Sciences brand that serves to validate both the movie and talent involved in making the film.
Marketing the films
When used in marketing campaigns, this validation stamp increases the desire of moviegoers to see the films and the talent being honored. It also keeps the movies in theaters longer - boosting box office receipts. And it substantially increases downstream revenues from DVD sales, streaming, downloads, and cable TV revenues.
Advertising revenue from the broadcast
Advertising on the Oscars broadcast brings in a big payday for the network that carries the show. For the February 28, 2016 telecast, ABC is selling a 30-second commercial spot for $1.8 to 2.2 million.
Possible Oscar brand damage from boycott
This year there has been talk of a boycott because it is the second year in a row that all 20 nominees in the actor category are white. Right or wrong, some believe this is likely to negatively impact the Oscar brand. In any case, many believe changes will be made in the awards process. There are so many points of view and issues wrapped up in this situation that it is hard for many to take a position one way or the other. Several have chosen to join the boycott so far.
Payoff for winning
According to IBISWorld, the best picture winners over five years (2008 through 2012) earned $13.8 million more after winning the award than nominated films that did not win. Winners earned 50.2% of box office revenue before being nominated, 31.8% after nominations and before winning, and 18.1% after winning.
In Hollywood, talent agents and managers estimate that their clients will get a 20% boost in pay for their next film if they win the award for Best Actor or Actress. According to writer and producer Stephen Follows, best actor winners can expect a $3.9 million pay boost, whereas best actress winners average a $500,000 increase. Because she was relatively unknown, Jennifer Lawrence doubled her pay after winning her first Oscar and joining the A-list of movie stars.
Nominations pay off too
Even though winning the Oscar does wonders for movie careers and box office receipts, there is often considerable benefit in just being nominated. Nominated films earn an average of $12.7 million more than films that are not nominated. Per IBISWorld, movies nominated for the Best Picture Oscar from the 2008 to 2012 awards seasons had an average production budget of $56.9 million and earned $127.7 million in box-office revenue for a profit margin of 55.7%. This is a significantly greater profit than the industry's average of 7.5%. Nominated films that did not win earned 83.1% before being nominated, 14.1% after their nomination, and 2.8% after the awards show.
Turning nominations into profits
Award nominations can also mean the difference between profits and bankruptcy for some movie productions. This is why marketers go to great lengths to promote their movies for the Oscars long before the nominations are announced in January -- spending from hundreds of thousands to millions of dollars. Studios spent between $5 and $15 million promoting their films over the past 18 years ever since many believe that the marketing spend by the Weinstein Company is largely responsible for securing an upset win for Shakespeare in Love over Saving Private Ryan in 1998.
Marketing investment pay off
In 2013, the Oscar marketing strategy paid off when Argo won best picture after Warner Brothers invested an estimated $10 million to promote the film. The previous two years, the Weinstein marketing magic is credited with securing a Best Picture win for The Artist in 2012 -- a silent, black & white, subtitled film and The King's Speech in 2011. Over the past 20 years, the film with the most nominations has won 15 times. This bodes well for the pictures with the most nominations this year - The Revenant (12 nominations) and Fury Road (10 nominations), followed by The Martian with 7, and Spotlight and Bridge of Spies tied with 6.
The winner is...
Whoever wins the Oscars during the 88th Oscar Awards broadcast on February 28th, one thing is certain - the Oscar brand is alive and well. Veteran movie marketers that know how to capitalize on the brand image of this famous statue can enhance their own brands as well as their bottom lines.