GM and Transformers Marketing Troubles

Thanks to the huge economic problems that General Motors (near bankruptcy) is experiencing, the company has made the decision to dial down its promotional campaign for Transformers: Revenge of the Fallen according to the Los Angeles Times.

The struggling automaker, whose new Chevy Camaro is one of the stars of director Michael Bay's action film in which vehicles morph into giant robots, has sharply throttled back its contribution to the advertising campaign tied to the sequel's release June 24.

The reduced spending by GM comes at a tricky time for Paramount, which needs all the promotional backing it can muster for "Transformers" in what looks to be one of Hollywood's most competitive summers ever. A dozen big-budget "event" films, including "Star Trek" and sequels to "Harry Potter" and "X-Men," will be elbowing one another into theaters.

"There's so much competition out there for the entertainment dollar that studios and filmmakers really can't open big, $100-million movies without the assistance of partner alliances that can help generate awareness and sell movie tickets," said Norm Marshall, chief executive of NMA Entertainment, a brand marketing firm that's been involved in movie "tie-in" campaigns for "Mama Mia!," "Iron Man" and "Matrix Reloaded."

For the Hollywood studios, which are under pressure to keep a lid on marketing costs, a promotional tie-in can spell millions of dollars of advertising underwritten by consumer giants like GM or fast-food chains McDonald's and Burger King.

"It can be extremely valuable," said Adam Fogelson, president of marketing and distribution for Universal Pictures, whose upcoming June release "Land of the Lost," a sci-fi adventure comedy starring Will Ferrell, has a "huge" media and in-store campaign with promotional partner Subway.

Studios can spend more than $100 million to market their "franchise" movies around the world. But as the studios try to rein in marketing costs, the tie-in campaigns with big advertisers become more important.

I can't say I am really surprised. Cutting marketing expensive is a quick and easy way to save money. I am more curious to know what impact this may have on the third film as Michael Bay saved money on the budget by getting the fleet of cars essentially for free, something I doubt GM will continue to do. This might open it up for competitors to step in. Thanks to The Chad for the link.