According to the Council of Public Relations (www.prfirms.org), the entertainment industry is the ultimate new product machine. Every week studios compete by launching new movies that are the result of tens of millions of dollars of creative collaboration. Their product has a limited ability to retain distribution and will be required to make room for the next wave of new products that will shortly follow on the heels of this effort.

Executives have wondered about the relative importance of paid spending versus public relations and the impact of earned media (including critics) in shaping movie box office, and the study from VMS may help answer this question. 

Using the movie offerings during the holiday period to compare the impact of news and editorial discussion with the influence of paid advertising, VMS looked at 15 movies launched within 2 weeks of Christmas (December 14th through 26th).

The metric that was used for the comparison was box office revenue per day per screen. This generated a standardized metric since box office was generally proportional to the number of theaters (screens) where it was available and earlier releases had a longer time period to generate their box office receipts. Box office per day per screen was compared against three metrics: 

1. Total ad spending for the 30 day time period prior to release of the film 

2. Earned media based on VMS' Media Prominence Index metric that takes media value and weights it for tone and prominence 

3. The combination of ad spending and earned media 

VMS found that public relations (earned media) clearly had a stronger correlation to box office success than did advertising (paid media); the combination of advertising and public relations really put butts in seats. There were very strong trends showing the impact of editorial discussion and critic's opinions, but sometimes movies with strong publicity and good ratings did not do well in the box office. There were also trends showing the impact of paid advertising, but sometimes movies with strong ad spending did not do well in the box office.

The correlation between box office per theater per day and earned media has an r-value of .592. By comparison, paid advertising spending shows a lower correlation of .524. Combining the earned media and paid spending yields an even higher correlation of .649.