IQ News: Analysis

Who Oughtta Be in Pictures? Net companies set their sites on "You've Got Mail." By Bernhard Warner When Nora Ephron, the writer/director best known for the 1993 film Sleepless in Seattle, hit upon the idea of a contemporary remake for the 1940 romantic comedy The Shop Around the Corner in which two competing store owners fall in love, it's said she didn't immediately turn to Hollywood for creative advice or promotional bucks. Instead, she got the ear of America Online's president and chief operating officer Bob Pittman to cast AOL, the planet's largest online service, to star beside Tom Hanks and Meg Ryan in next month's Warner Bros. release, You've Got Mail, the first ever romantic comedy set partly in cyber space. Like many promising child actors, the Internet's first major comedic role will be judged at the box office. However, the stakes may be even higher for movie studios interested in casting notoriously frugal Internet companies as promo partners and there's no indication they will re-sign for a sequel. So far, however, all those Net companies responsible for promoting You've Got Mail are saying the right things despite their relative newness to the movie tie-in racket. Warner Bros., in keeping with the film's theme, has amassed what until now had been a mostly untapped category of movie promo partners: Internet-focused companies including AOL, 1-800-Flowers and E*Trade which are lined up for the film's release on Dec. 18. "I think this is going to do much more business than Sleepless," predicts Myer Berlow, AOL's senior vice president of interactive marketing. Berlow stopped short of defining how big in terms of dollars, but he's confident the promo partners, which he helped amass, will mean a strong showing at the box office. In a promise to Warner Bros., Berlow convinced AOL commerce partners 1-800-Flowers, E*Trade and Kodak to sign on with the studio to promote the movie. Each is believed to be contributing the customary amount of over $1 million apiece to market the flick in exchange for the rights to use pieces of the film to promote their own businesses. But this is not a case of advertisers ponying up millions for gratuitous promotional purposes, Berlow cautions, sounding very much like a veteran Hollywood marketer. "It's all authentic. It's not a clunky, paid-for product placement," he says. For its part, AOL has constructed a You've Got Mail site on the service with a variety of games and promotions giving users a chance to win prizes ranging from a Fragrance Counter shopping spree to the grand prize of a $10,000 account on E*Trade. However, AOL recently decided to forego a TV spot that would have highlighted its role in what it's referring to as YGM "for fear it would cheapen" the movie, Berlow says. It used to be that movie studios had the best luck inking deals with purveyors of soft drinks, fast food and salty snacks. The prevailing logic is that moviegoers have a high preference for junk food. A movie tie-in then is viewed as impetus to spur incremental sales of Happy Meals and movie-themed collector's cups. With the arrival of AOL and E*Trade, does this suggest Hollywood is interested in a more sophisticated audience? Possibly. E*Trade's Jerry Gramaglia is no stranger himself to movie tie-ins from his years marketing decidedly more mainstream brands Sprint and Taco Bell. He saw in the deal an opportunity to bring some new faces to his site, Destination E*Trade. As senior vice president of marketing and sales at the Palo Alto, Calif.-based online broker, Gramaglia's primary task is accruing 1 million new accounts with a $150 million marketing budget. Given the mainstream nature of investing and the boom of online trading, Gramaglia figures a movie tie-in can lend some excitement and, more importantly, credibility to the E*Trade site in trying to win over new recruits. And the star power of Hanks and Ryan can't hurt. Earlier this month, E*Trade launched the second of its celebrity challenges. This time Hanks and Ryan face off in a fictitious stock-picking contest. Visitors can try their luck against the stars too. "It's a relatively small part of the marketing mix but it adds vitality to the [stock picking] game," Gramaglia says. The YGM tie-in is similar to a deal Gramaglia cut last year while at Sprint, tied to Sony's Men In Black. In that deal, customers who signed up for Sprint long distance got free tickets to MIB. It's all about generating accounts while reducing churn, he says. Although his first and only Internet-related client has been E*Trade, Mark Owens, senior vice president at Santa Monica, Calif.-based Davie-Brown Entertainment--a firm that specializes in entertainment marketing and product placements--says Hollywood and the Net are a logical fit. Simply stated: "Studios are looking for exposure to their properties in non-traditional media. And Internet companies have educated, active and very loyal customers I think you can get their attention at a better cost per thousand, if you will, than if you were buying mass media." Given the amount of wired sci-fi buffs, for example, does this mean we'll see ISPs or portals clamoring for the chance to pony up the dough to tie in with the newest round of Star Wars flicks? For now, especially in Hollywood, the answer seems to be, "Why not?" Mark Workman, senior vice president of strategic marketing for Sony Pictures Entertainment, Culver City, Calif., says as long as a tie-in partner can add elements that enhance the plot (as AOL's chat provides the backdrop for uniting Hanks and Ryan in You've Got Mail) and, of course, marketing dollars, then he'd welcome doing more work with Net companies. It's the price tag though, that likely will prevent most Net marketers (who have a reputation for trying to negotiate deals in terms of banners instead of hard cash) from courting Hollywood. Jim Hoenscheid, director of promotions at Lycos, Waltham, Mass., has worked with New Line Cinema on Lost In Space, Blade and Rush Hour as a secondary tie-in partner, trading space on the site for getting Lycos branding in theaters and record stores. But official tie-in partner? "That's a high ticket item," Hoenscheid says. "I don't have the money to go out and promote a movie as an official partner. Financially, it wouldn't make a lot of sense." Brian Swette, senior vice president of marketing at San Jose-based online retailer eBay, concurs: "I think it's a ways away just because of [Internet marketers'] priorities and budget constraints." Swette, the former chief marketing officer at Pepsi-Cola Co., thinks there is value in movie promotions for all consumer-oriented brands, based online or off. That's why he has kept in touch with his Hollywood connections. But there's nothing on the horizon, he says. Even Berlow, with considerably larger pockets, says AOL will never be this involved in a movie again. "This is not a harbinger of things to come for movie promotion," Berlow says. "We'll probably do product placement. We'll probably do some form of promotion but nothing like this ever again." Berlow says it's not the price tag that is the issue. Rather, he feels as if You've Got Mail is a once-in-a-lifetime opportunity to capture AOL in cinematic terms as a budding pop culture phenomenon. "This is about all our lives and you can only say that once."

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