How Should Studios Split Ad Budgets Across Theatrical, Digital, and Streaming?

When a movie rolls out in stages, how do you decide where the ad dollars go first week in theaters, later weeks, discs and TVOD, then streaming? In this episode, Prof. Sönke Albers walks me through his Journal of Advertising Research article, “Optimal Rules for Advertising Budget Allocation Across Movie Versions Marketed in Sequential Distribution Stages.”

Sönke explains a simple, Excel-friendly rule that accounts for both stage size and long-term ad elasticity, plus the carryover and spillover that early ads create for later stages. The takeaway is clear: when there are meaningful carryover effects, front-loading spend early typically pays twice, but you still need to weight each stage by its expected profit and responsiveness. He also shows how the cascading structure scales to any number of release stages and why optimizing real profit beats rules that only look at elasticities.

We talk practicals for studios and any brand with staggered launches books, games, product lines and why getting decent elasticity estimates can materially improve outcomes.

Read the full paper here:
https://www.tandfonline.com/doi/full/10.1080/00218499.2025.2464282

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