Ad Spending, Box Office Returns Don't Always Jibe

If this were a logical world, money spent by movie studios in advertising new films would always translate into returns at the box office. But as any movie fan will tell you, the entertainment business is far from logical—in fact, there doesn't appear to be any direct relationship between spending on television ads for new releases and the box office numbers generated by those new releases. It's enough to drive an accountant crazy.

The number one film for the first half of the year, Mission: Impossible 2, pulled in $215.4 million at the door, while Paramount spent $22.7 million on TV advertising—approximately a 1:10 ratio of ad dollars to box office. DreamWorks' Gladiator, by comparison, did $186.6 at the box office, while the studio spent $29.5 million on ads, approximately a 1:6 ratio. Warner Brothers' The Perfect Storm grossed $181.4 at the box office through July 30, and $25.6 million was spent convincing people to buy tickets. Ratio of ad-to-box office for the fishing disaster flick was 1:7.

Pretty good returns, yes? The numbers for some of the year's less successful films are more sobering, proving that you can't always buy success. Paramount's Snow Day pulled in only $60 million in ticket sales, but the studio spent $20 million advertising it—one dollar spent for every three dollars taken in at the box office. Rules of Engagement, also from Paramount, did similarly, taking in $61.3 million for an ad budget of $21 million. The Road to El Dorado, a DreamWorks release, grossed only $51 million for an advertising outlay of $18.3 million. The film was ranked #29 in theater attendance for the first half of the year. Disney's Mission to Mars also finished near the bottom, with a #21 ranking. To achieve this, the studio spent $18.1 million on TV ads, and saw $60.9 million in box office receipts.

Ticket sales are a good indicator of a film's popularity but only a rough indicator of its profitability; production costs and advertising eat up a sizable chunk of profits. (Ad figures here were made public by Competitive Media Reporting, which follows television advertising expenditures; box office grosses come from Exhibitor Relations Company, a theater industry tracking organization.)