Apr 1, 2008 12:00 PM, Larry Jaffee / Editor in Chief

The Motion Picture Association of America reported last month that the average cost of producing and marketing a movie in 2007 by the major Hollywood studios was a whopping $106.6 million, up 6.3% from $100.3 million in 2006.

For our purposes, it's hard to pinpoint how much of the money is earmarked for what we consider to be promotional (e.g., CPG tie-ins, events, online games, etc.).

But the MPAA said Internet advertising accounted for 4.4% of total ad spending last year, up from 3.7% in 2006. A forthcoming study from the MPAA and Yahoo reveals that 73% of moviegoers use the Internet to conduct research before going to the theater, which validates all the games being created to plug films.

MPAA's largest category of advertising expenditures — “other media” (24%) — includes cable TV, radio, magazines and billboards. The second largest (21%) is “non-media” outlays, including production/creative services, exhibitor services, promotion and publicity, and market research.

With movie marketing costs continuing to rise, there's sure to be no shortage of product placement. To wit, Skyy Vodka struck a deal last month with New Line Cinema to serve as the official spirit brand of the new film, “Sex and the City.”

It's not only Hollywood fare in need of outside money to get a film made. For example, “Grand Canyon Adventure: River at Risk” is an IMAX documentary in 3-D “presented by Teva,” the footwear company.

The combined sponsorships of both Teva and kitchen/bath products firm Kohler Co. covered 25% of the production budget, reports Lori Rick, spokeswoman for the movie's producer MacGillivray Freeman Films.

For Teva the investment was a no-brainer. “It's so relevant to what we are about as a brand,” says spokeswoman Jaime Eschette, adding that the company was founded by a Grand Canyon River guide.

Sometimes movie sponsorships can be a little self-serving.

Last month Richard Branson made a cameo in his own 20-minute movie promoting Virgin Mobile's new cell-phone service in India. The media mogul appears with a Bollywood starlet. Wireless competitors complained that Virgin had an unfair advantage. The film was broadcast on a Virgin-owned music video channel.

Manhattan art gallery Deitch recently was remodeled to resemble the set of the hit comedy “Be Kind Rewind,” in which an aspiring actor and his friend who runs a video store shoot their own versions of cinema favorites. For six weeks the gallery, helped by director Michel Gondry, provided visitors with everything needed to make their own films in two hours.

This much is certain: Hollywood is dependent more than ever on financial help, and there always will be marketers and consumers with stars in their eyes.

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