On April 4th, we had the pleasure of hosting Matt Marolda, Chief Analytics Officer with Legendary Entertainment at the monthly L.A. Marketing Analytics Group. The event is hosted by eSage Group.
At our event, Matt presented on Disrupting Hollywood Paradigms with Analytics. We were treated with some very interesting and thought provoking innovations that Matt and his team at Legendary Entertainment are working on to uncover powerful insights about mainstream box office audiences in the US and worldwide. This insightful information helps inform marketing tactics and overall production investment strategies.
Matt and his Applied Analytics team are tasked with informing several key components of the movie making and marketing process.
The following is a list of the key discussion points and learnings from Matt’s presentation.
- Informing Creative: Evaluate movie concepts, cast, themes and fan base long before a single dollar is spent on movie production.
- Transforming Marketing: Use analytics to identify, understand, reach, and persuade individuals to watch a particular movie.
- Understanding People, Content, Social and Conversation: Create a virtuous feedback loop where these four inputs are integrated into the overall marketing process to provide a continuously improving understanding of your audience over time.
- Identify Varying Degrees of Persuadable People: Identify three clusters of persuadable personas with varying degrees of predictability with regards to convincing them to attend a particular movie.
- Innovative Experimentation that Yields Big Wins: Movies that aren’t positively received in one part of the world may perform well in other regions. Use experimentation to test market acceptance of a particular movie in other regions before making further marketing investments.
Read on to hear more about how Matt and his team are shaking apart the old Hollywood Paradigms and creating a truly data-driven movie making environment at Legendary.
On April 4th, at the monthly L.A. Marketing Analytics Group which is hosted by eSage Group, we had the pleasure of hosting Matt Marolda, Chief Analytics Officer at Legendary Entertainment. At the event, Matt presented on Disrupting Hollywood Paradigms with Analytics and we were treated with some very interesting and thought provoking innovations that Matt and his team are working on at Legendary to uncover insights about the mainstream box office audience in the US and worldwide.
It is known that Hollywood has many marketing paradigms that have been well entrenched for decades, some good, others beg to be disrupted. One of those stale marketing tenets that are being reevaluated and shifted to something more useful is how Hollywood has been segmenting the market using the often cited four quadrants: by male, female, over 25, and under 25; totaling 4 groups of 80 million people in the US, which is probably one of the crudest ways to look at the marketplace. Legendary is changing this old practice by looking at ways to see an audience in a much more granular way by micro segmenting this model into 80 million groups of 4, give or take – which seems daunting. But if you consider the top down leadership effort at Legendary to drive a culture of data driven marketing, it becomes more realistic. Two key efforts at Legendary that Matt and his team have been driving include Informing Creative and Transforming Marketing through applied analytics.
Informing Creative: All movie studios must decide on what creative movie concept, cast, and theme should be green-lighted, and which fan base should be targeted long before a single dollar is spent on making the movie. For much of the entertainment industry’s history scripts have been written and submitted, discussed and debated, picked up and dropped. This process includes top level executives deciding on whether the movie is going to be viable, profitable, and on brand for the studio.
Many of those decisions in the past were made by gut instinct, and then hope, prayer, chanting and the burning of incense was involved (at least in my version of this). With the advent of data collection and analytics being injected into the creative decision process, decision makers are shifting to a more data-driven approach when deciding to make a film. Present day studio brass at Legendary are now utilizing analytics (by way of Matt’s Applied Analytics Team) to evaluate movie concepts, the cast, screen fans ahead of time, test the theme, and they even look at sequel viability in order to inform the creative process and uncover the potential ROI in a very predictive way. This includes looking deeply at People, Content, Social and Conversation which I’ll talk more about in a bit. Legendary Entertainment CEO and visionary, Thomas Tull sought a better way when he launched the company in 2000. As of 2017 Tull is no longer CEO, but his decision to hire Matt Marolda in 2013 to take Money Ball to Hollywood remains firmly intact.
Transform Marketing: Legendary shifted to an internal analytics team tasked with altering the marketing process from an older model sadly referred to as spray and pray where marketing dollars are spent in volume to reach all people with the hope that they will show up at box office. The paradigm shift is towards a more targeted approach that seeks to identify, understand, reach, and persuade individuals. Beyond that goal is the effort to reduce marketing spend by 20% through the strategic targeting of specific audience segments. That reduction in marketing spend directly affects the bottom line of movies on a global scale. Legendary is doing this is by maintaining an analytics team comprised of three groups: The Quantitative Group, The Development Group and the Delivery Group.
It’s the Quantitative team’s job to tap tons of data and apply it to the movie making and marketing processes directly using analytics. The Development team is tasked with integrating complex data feeds rapidly, turning the models of the Quant team into software, building high speed querying to allow iteration and refinement, and launching media feeds through API’s. Finally, it is the Delivery team’s job to execute media buys on all digital platforms, where for Legendary, media agencies were unable to deliver at the speed and scale that is required to be competitive in this fast-moving effort to turn insights into marketing action that targets segments uncovered earlier in this process.
Successful marketing analytics teams everywhere strive to experiment, learn, “fail” fast, and reiterate the ongoing process in an unending feedback loop. This agile approach to data driven marketing continues to prove that trying things that might have failed in the past, or those that weren’t ever tried, can still yield big wins. This “panning for gold” approach either yields an answer confirming that one consumer messaging approach or another did not work, or in other cases it is uncovering novel and successful messaging that would not have been conceived of otherwise. Therein lies the paradigm shift from overspending and gut instinct marketing on a grand scale, to the highly targeted and strategic approach that not only saves marketing dollars, but imparts analytics that allow organizations to make their current marketing spend far more productive.
People, Content, Social & Conversation Looking at how competitive and successful movie companies like Legendary Entertainment approach data collection and the insights that are surfaced is a great example of how to stay competitive in any marketplace. This innovative approach to analytics is apparent in Matt’s Applied Analytics team who uses a virtuous cycle where four specific areas of data are integrated in unique ways. They collect and analyze information on People, Social, Content, and Conversation.
- People Information: Includes 1.5 billion email addresses, 200 million households with PII (Personally Identifiable information) and hundreds of other attributes per person sourced from a multitude of available data. The Applied Analytics team at Legendary has curated this data set internally to enable them to identify, reach, understand, and persuade people.
- Content Information: Includes box office data by individual theater for all movies from 2007, all US based advertising since 2007, meta data by second for movies from the 80’s to present day that identify actors in each scene, topic of conversation, tone & tenor of background music. These pieces of information are all crucial for comp’ing and modeling in the property evaluation process – which determines properties to buy, which movies to make, and which actors will be in them.
- Social Media Information: Includes feeds from 500 million Twitter profiles and billions of tweets, 100 million Facebook profiles, all of Reddit, all of Wikipedia, plus thousands of News Sites and Blogs are scoured, collected and stored for insights.
- Conversation Information: Includes social interactions by geography, plus extensive analysis on text and images using traditional and innovative techniques to help inform movie makers and marketers. This data helps Legendary understand current trends, what people are saying about particular movies along with their associated sentiment.
Using tools to analyze People, Content, Social and Conversation have helped Legendary build audience profiles and create hundreds of microsegments, identify key persuadable points and produce detailed, actionable insights. Acting on this data by matching profiles to key aspects of a movie surfaced from movie meta data informs Legendary on what movie to promote and to which persuadable audience. Changes of intent are also measured and creative actionable insights emerge at a rate of over 50 per movie, per week. This analytics ecosystem which integrates data, analytics, and campaigns, along with deep API integration allows for scale execution, sophisticated reporting and continual optimization.
Varying Degrees of Persuadable People: When Trying to identify persuadable sets of personas, Legendary looks at three clusters of people who hold varying degrees of predictability with respect to the ability to convince them to attend a particular movie.
First, there are folks that have been engaging with a property since childhood. Movies like Godzilla, King Kong and Warcraft have a historically long-standing culture of followers. Legendary seeks to turn those people into active evangelists. Marketing to them does not require a high-dollar spend because of their inherent affinity for the subject matter. Simply advertising key points like hints at trailers to be dropped and the dates of movie release are all that this group needs. The marketing effort is just to “stoke the flame” for this group.
Another cluster of people is identified as the “your mom” segment. With this segment Legendary understands that there are just certain movies that they will not attend. So there is no need to spend marketing dollars on this group when marketing a certain genre of movies. Legendary will save these marketing dollars for other groups that are more apt to engage.
The third identifiable cluster is defined as the “people in the middle.” This group, when served the right creative at the right time will change their mind and their opinion of the film. In May of 2014 Legendary ran some testing on the Godzilla release. They found, unexpectedly that women ages 24 to 36 were identified as persuadable. This was a key insight. Legendary didn’t think this segment would be a viable target when they were whiteboarding their marketing effort. They then used analytics to design the movie trailer through insights uncovered about this new segment. The insights uncovered showed them that they needed to emphasize the conspiracy theory in the Godzilla plot rather than the monster destroying the city. They also knew to emphasize Bryan Cranston who was fresh off Breaking Bad. The trailer they created resonated with women and they subsequently launched an extensive marketing campaign around this knowledge, while continuing to further optimize their marketing for these segments. Uncovering surprising and unexplainable segments like this has proven to be extremely valuable. Establishing a culture of experimentation and building feedback loops into your strategy allows for these kinds of powerful insights. Once a new segment is identified, predictive models are built to identify who is likely to engage with particular content. With propensity scores, Legendary can zero in on targets as they get closer to the release, whereas other studios tend to get more panicked and market to a broader audience. Legendary can go narrower, targeting only the specific people they think will act to a particular marketing piece. When thinking of the world on a more CPM basis this is a better way to go. Plus, this can all be done at scale. This same process works for blockbuster films or much smaller projects, with both receiving lift. With this lather, rinse and repeat methodology, these efforts all continue to inform and allow for continual optimization. Data is collected on an ongoing basis and appended back into the database, so the system continuously learns what approaches work and which don’t. The system is continuously getting smarter and providing ever greater ROI over time.
A Third Paradigm Shift: A third and final example of how Legendary is disrupting the old Hollywood paradigms can be seen in their effort around the release of Warcraft. The movie was tested in China, with data being collected on 8 different versions of the movie with hundreds of test subjects using biometric Fitbit-like devices to track heart rate, blood pressure, oxygen levels, and more. Also, iPad-like devices were used to capture facial expressions during the viewings. These experiments provided information on how viewers were engaged with the movie in several ways.
This data ultimately revealed that a movie that was “panned” by the critics and dubbed awful in the United States would in fact resonate well with the Chinese audience. The movie was launched globally and was a box office success in China grossing over $220 million. This was a record in this geo and the movie ended up with total global revenue of over $433 million.
In Closing: The analytics concepts being harnessed by the team at Legendary are innovative and cutting edge and might just prove to Hollywood once and for all that analytics are here to stay and not just a passing fad as some have said (as they were packing up their belongings and seeking a new line of work). Those of us who seek deeper knowledge of our customers and processes in business know that if you aren’t competing with analytics, you’re not competition.
Many of the efforts at Legendary are reminiscent of the work we do at eSage Group. For large entertainment companies and several other verticals, we too help our customers obtain deeper insights through data integration and analytics. If your marketing organization is looking to migrate from the Spray and Pray digital marketing approach to a modern and efficient Marketing BI/Analytics infrastructure, we at eSage Group can assist in that process in a myriad of ways. We help our clients integrate data from a multitude of various sales, marketing, partner and social channels, no matter the format of the data or the system it’s sourced from. We design and build Marketing Analytics Data Warehouses, Data Lakes, Data Marts and connect newly integrated data to all your favorite reporting and analytics tools. We are equally comfortable with on-prem and cloud based traditional data warehouse technologies such as Microsoft SQL Server, as well as most of the modern Big Data/Hadoop based platforms.
Our goal at eSage Group is to assure that marketing teams are obtaining useful and highly actionable insights from all internal and externally collected sales and marketing data. For more information on eSage Group and how we help our clients, please visit our website or email me directly.