Sure, Gwyneth Paltrow may swing into the Google offices now and then to take a ride on a Segway scooter, but in reality it is popular portal site and search engine company Yahoo! that is taking the lead when it comes to hobnobbing with the Hollywood elite.

Yahoo! CEO Terry Semel, who once worked as the head of Time Warner's enormous Warner Bros. corporation has always been on the forefront of expanding revenue streams and producing innovative new marketing outlets, but the addition of former Warner Bros. Online exec Jim Moloshok as Yahoo! senior vp of media and entertainment in the spring of 2002 has helped push the company forward as it seeks to build close ties to the Hollywood community.

The Hollywood Reporter interviewed Moloshok earlier this year and pointed out that the number of movies choosing to launch advertising campaigns through the portal has grown at a strong rate over the past few years and that that growth is expected to continue into 2005. Moloshok explained "In 2002 we had 74 movies, and in 2003 we had 131. In 2004 we're tracking at a higher number still. Not only has the number of movies grown, but the per-title spend has grown multiple times."

Movie studios have typically relied on traditional advertising like television spoilers, promotional tie-ins and theatre trailers to spread the word on upcoming films, but the impressive potential of online marketing was shown with the pre-launch buzz generated online for independent film "The Blair Witch Project." When the film opened in the summer of 1999 it had already inspired dozens of fan sites a "web ring" and a mailing list. Online discussion boards were buzzing with rumors that the documentary style footage from the film was real and searchers swamped engines with search queries seeking background on the story. The film, which cost a mere $60,000 to make ended up grossing nearly $30 million in its opening week at the box office, thanks in large part to the buzz created by the online community.

Movie studios took notice of the film's success and starting planning ways to capitalize on the promise of Internet's marketing. Many executives are finding what they are looking for in Yahoo!'s community environment which features online reviews by critics and consumers as well as discussion boards that feature endless conversation about upcoming films and inside peaks at what's happening during production. In an environment set up to breed curiosity and peak interest, movie studies have realized that a minimal advertising budget can reap impressive rewards. In fact, some studies have even announced plans to premier trailers for upcoming films on the portal site.

Despite an initial collapse of Internet advertising when the dot com bubble burst a few years ago, strong content based sites like Yahoo! have seen a renewed interest in the potential of online advertising. The lean times that came with the demise of online advertising caused movie studies to get more creative with how they spent their advertising dollars. "There was the same number of theater seats and the same number of movies being produced, but there was less money to market them. It caused everybody to look at zero-based budgeting and new ways of reaching people, which gave us the opportunity to show how the Internet can work for studios" said Moloshok in his Hollywood Reporter interview.
July 12, 2004

Jennifer Laycock is the Editor of Search Engine Guide, the Social Media Faculty Chair for MarketMotive and offers small business social media strategy & consulting. Jennifer enjoys the challenge of finding unique and creative ways to connect with consumers without spending a fortune in marketing dollars. Though she now prefers to work with small businesses, Jennifer’s clients have included companies like Verizon, American Greetings and Highlights for Children.

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