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Achieve Blockbuster Success in the Movie Market

A VDP campaign results in double-digit coupon response

PMG Inc., a Kansas City, Mo.-based marketing agency specializing in Hollywood studios, has a history of stumbling on brilliant moneymakers. In the early ’90s, Executive Vice President Jim McGinness and the PMG team put movie graphics on collectible plastic popcorn tubs. “We thought we were just selling plastic Lion King tubs,” he says of the best-selling items. “We didn’t know it, but it was essentially the first alternative media promotion in the industry.”

“We’re a unique bird,” McGinness says, which sums up the company’s niche and begins to explain Cinema Clips, a smart VDP solution to an old, simple problem. PMG generally sells marketing and promotional contracts to major movie studios and film distributors. The clients decide how many impressions of a movie image they want seen, and PMG finds opportunities to advertise and promote the film, usually working with theater chains. Late last year, this led them into the direct mail business as well.

Small theaters, Jim explains, “live and die on concession stand revenue.” The movie business is continually squeezed by NetFlix and related services, TiVo options, and titles that release to DVD faster every year. Theater chains see only a small percentage of the ticket price as revenue, but concession stand profits yield much higher margins.

While searching for a way to promote studios’ new releases and the theaters in which they’re shown, Dave Johnson, PMG founder, met Steve Ingham, a former Convertible Inc. employee and VDP consultant. Their sons played basketball together, and PMG, Ingham and his business partner, also a former Convertible employee, Jim Armstrong, started to talk about how their businesses could combine.

Since then, PMG has done a handful of projects with Ingham’s and Armstrong’s business, now called Made Up Movies. Initially, they approached Disney with a promotion idea for Bridge to Terabithia and Meet the Robinsons, two children’s movies released in early 2007. In the initial run of 25,000 mailers for five theater houses, the piece yielded a double-digit response.

“The job shows the power of variable data,” says George Fry, managing director of printer Convertible Inc. in Sedalia, Mo. The company printed the job on a Xeikon 5000 in nine days. “This kind of application is where the industry is headed,” Fry says. The preconverted coupon sheets were three-panels with 4-color on each side. Each had eight perforated coupons for concession stand offers, which were determined by each participating theater and varied by mailing demographic. The facing pages showed ads for the two movies and contact information for the theater. “It’s not enough to just make people open it up. You must be able to track the participation in the program, too,” Fry says.

PMG trained theater employees to hand-enter customer data in the system when the coupons were collected. Each coupon is labeled with the customer’s first and last name, and the one most frequently used (a free popcorn voucher) had the customer’s address as well. Once entered in the database, the company was able to tell which customers responded to which coupons on which day. Fourteen percent of recipients responded in the 10 days, the company says, and the run averaged 11 percent response overall.

Convertible has printed a repeat of the job (an 80,000-mailer run), but isn’t sure what will happen in the future. “Just because a job is successful doesn’t mean they’re going to redo the same thing,” Fry says. “Everyone is trying to figure out how to keep surprising the customer in a new way.” PMG has done similar programs with Universal Studios and Cinemark since the Disney mailer. The pieces cost 50 to 60 cents each and some of that cost is offset for the theaters by promotional money from major studios.

PMG has hired Whitney Armstrong, Jim Armstrong’s daughter and a former Made Up Movies employee, to help promote the company’s future variable data solutions. “This kind of campaign hadn’t been done in the theater market when we introduced the idea of Cinema Clips,” she says. “It’s very personal—it’s got the recipient’s name all over it, and it’s targeted information-wise as well.”

The coupons serve a number of functions, including encouraging more people to go to the theater in the first place. But they also encourage patrons to spend more money while they’re there. The average moviegoer spends less than $3 per person on concessions, McGinness says. “If you can boost that average a nickel or a dime or 15 cents, that’s huge.” The cost of the coupons and the discounts on them are offset by other spending. “If you give them a free bag of popcorn, what’s the probability that they want a soda to go with it?” McGinness asks rhetorically. “I really think this product is going to have some legs in the theater business.”

—Rebecca Trela