With the rise of online, digital and social media marketing, it is incredibly and increasingly difficult to cut through the clutter and reach one’s target consumer. This is even more pronounced in the entertainment space, where the overall number of theatergoers is on the decline, blockbuster movies dominate and battle with each other for audience share, and smaller budget films just do not have the marketing horsepower to compete with blockbusters.
Legendary Applied Analytics (LAA) was founded in 2013 as part of Legendary Entertainment as the “Moneyball for Hollywood” with the goal of using statistical analytics to put an entertainment product (Legendary Pictures) in the best position to succeed. In order to achieve this, LAA’s method involves identifying viewers who resonate with the topic, finding the most effective advertising messaging to engage them and converting them to paying consumers. So far, LAA has been successful in innovating on traditional marketing methods to push their products to succeed in an increasingly crowded digital world.
LAA primarily creates value by providing higher return on investment for its client’s marketing dollars by employing lean A/B testing across online platforms. LAA aggregates and owns data (such as name, addresses, social media handles, interests, habits) about the population from lenders, retailers and social networking sites. For a particular movie, its proprietary analytics identifies and test thousands of different mini ads (messages, images, teaser trailers, etc.) with consumer groups and traits to determine response and efficacy of campaigns. It picks the winning messages and delivery channels to design marketing campaigns for the product. Then, these are scaled and distributed to the wider population or they may choose to more targeted messaging to deepen engagements with focused groups.
However, the efficacy of their methodology will still highly depend on humans and marketers asking the right questions, selecting the right consumer parameters, and designing the right tests to run.
In addition, for Legendary Pictures, LAA also uses its database and analytical capabilities to advise on which movies to make, which actors to cast and when to release movies. In order to determine if there is an audience for the movie’s particular topic or point of view, LAA scours social media sites to determine the rhetoric and tries to estimate how big the audience is prior to a movie being made.
As they were building out their capabilities and business, LAA worked primarily for Legendary Pictures movies. They now contract with other movie studios, and other industries such as carmakers, sports leagues and politicians to perform analytics work for them, employing a fee-for-service model. To further leverage the data, platform and proprietary analytics algorithms they have built out, LAA aims to grow and broaden their client base and therefore revenues.
The more projects for different clients LAA is able to run, the more learning will be achieved across their volume of testing, and the more valuable their analytics platform will be for future client projects. Additionally, the bigger their dataset is and the more sophisticated the analytics engine is for scouring the online and social media landscape, the more value the Legendary Analytics platform will be able to create for both internal and external clients.
Looking forward, prospects are bright for LAA; it has the potential to grow and scale significantly: many companies across industries are searching for more effective ways to deploy their marketing dollars.
Sources: https://www.bostonglobe.com/business/technology/2016/03/31/making-movies-moneyball-way/Uzgwh2cdGthA1N3nZHqz0N/story.html; http://data-informed.com/big-data-takes-a-star-turn-at-legendary-entertainment/