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Hollywood and social media may seem like a match, but if Facebook is a big part of 'social media', the movie version of the relationship may not have a happy ending.
Last year, just as the world's largest social network was prepping to go public, it was publicly dissed by automaker GM, which said it was cutting its spend on paid Facebook paid ads.
Now it looks like movie studios, not sure of the ROI from their Facebook investments, may be following in GM's footsteps.
According to the Los Angeles Times, "Some industry executives are increasingly skeptical that Facebook ads and promotional campaigns that ask users to 'like' a movie can deliver big box-office returns." The former head of marketing for Walt Disney Studios, Jim Gallagher, has a potentially disturbing message: despite all the time and money invested, efficacy isn't clear.
Some studios, like Sony Pictures Entertainment, aren't ready to shame the social network, at least publicly. "Facebook continues to be an important advertising partner," Sony's worldwide digital marketing president Dwight Caines told the Times. And Facebook says that its relationship with Hollywood studios is getting tighter by the day.
But the buzz is that, as Facebook has moved to charge for marketing on its platform, studios are starting to question how much they're spending and what they're getting in return. And in at least some of the cases, it appears that Facebook isn't the star of the marketing show, but rather an extra.
Misalignment of expectations?
Ben Carlson, who runs research firm Fizziology, tells the Los Angeles Times, "I still think [Facebook is] one of the most powerful marketing inventions of all time. But it's not a one-size-fits-all, write a check, and magic happens."
That's a sensible statement, but is it aliged with the expectations of marketers using Facebook, including Hollywood studios? Perhaps not. And therein lies one of the biggest challenges Facebook faces.
An anonymous studio marketing executive compared Facebook to billboards:
There are so many people on Facebook, it is a good place to have a presence — as a reminder. We buy the billboards in Westwood too — a lot of traffic drives past those. It doesn't mean your film will not open if you don't have that. The correlation is probably minimal. But when we're opening a movie, we want to be in as many relevant places as we can.
The problem, of course, is that Facebook is supposed to be more than just a billboard on the side of the road. If it isn't, the sums a growing number of marketers are spending on the social network will eventually be called into question.
For its part, Facebook is trying to prove that its ads work, and when it comes to Hollywood, the company says it's giving studio clients more data showing a cause-and-effect relationship between Facebook ads and movie ticket sales.
But will such data be the social networking equivalent of special effects? In other words, is it real? Do studio marketing executives really believe that ads and engagement on Facebook drive consumers to the movie theater any more effectively than any other marketing medium, justifying a greater investment, or a premium for Facebook's ad offerings?
Time will tell. In the meantime, one thing is clear: now that Facebook's efforts to get marketers to pay to reach consumers are in full swing, those marketers are finally evaluating ROI. If Facebook delivers it, the company's disastrous IPO could be soon forgotten. But if Facebook can't deliver it, an even rockier road is ahead.