Gallup pollsters open local movie-research division; launch presents challenge to long-time industry giant.

When word got out that Columbia Pictures mega-budget film "Last Action Hero" allegedly tested poorly before preview audiences, the ensuing media controversy coupled with poor reviews made the movie a flop before it even opened.

And although Columbia may have claimed such market research didn't even take place with "Last Action Hero," the fact is film executives do spend a lot of time and money on movie market research.

National Research Group, a division of London-based ad giant Saatchi & Saatchi Co., has for the past 15 years held a virtual monopoly in the $30 million worldwide movie-research market niche -- holding exclusive contracts with many of the major studios. But this spring the Gallup Organization Inc. -- the world's largest survey research company -- launched its own movie research division called Gallup Motion Picture Research Division. The division operates out of Gallup's Irvine office.

Gallup's announcement came several months after the Wall Street Journal reported in December that former National Research Group employees claimed that firm's research data had been altered sometimes at the request of National Research Group Chairman and founder Joe Farrell.

Farrell has denied the charges, and National Research Group continues to have close ties to studio executives and a solid reputation.

National Research Group, which is headquartered in the Miracle Mile district of Los Angeles, refused to comment for this article. However, one former studio marketing executive said, when asked about the research outfit: "They're damn good at what they do. They're hip to the process; they're friendly and the information they give is good and accurate. They have the (largest) market share because they make people happy."

But one industry observer questioned National Research Group's integrity and said Gallup's timing could help it break down barriers and establish a substantial position in the niche that has long been dominated by National Research Group. The source added, "I think people will give Gallup an opportunity. Competition only makes things better, especially for the studios. ...Anybody can do what NRG does. This is not rocket science, and the field is open to new entrants. Gallup has the type experience to do the job."

Gallup's Senior Vice President Michael Ginn said Gallup had been preparing to launch its film research division for about a year. "The timing and the ramifications (from the Wall Street Journal report) was pure coincidence. We were ready to announce the plan as early as January, but we waited until March. We didn't want it to seem like we were ambulance chasing or being opportunists," he said.

Gallup, founded in 1935, is best known for its public opinion Gallup poll. Although they have been out of the movie research business since the 1940s, George Gallup and his partner David Ogilvy have been historically credited as pioneers of the movie research niche.

Since Gallup has been absent from the niche for decades, Ginn said, "We know it's going to take a while for studios to feel comfortable with us." But he added, even though it might take a few years to break into the market, Gallup is committed to the project. The firm has beefed up its Irvine office by hiring 12 full-time employees devoted solely to the movie research division and has hired three advisory consultants -- motion picture production consultant Eric Sherman, veteran marketing and distribution executive David Forbes and publicity firm Rogers & Cowan's Jeffrey Godsick.

According to Ginn, in 1993 Gallup invested about $300,000 to get its movie research services up and running. He estimated the division's operating costs at about $80,000 a month to offer clients four basic services to compete against NRG. Those services are: preview screenings, tracking surveys, movie attender surveys and the testing of movie advertising.

Research executives said NRG might still have the edge with its massive database of historical surveys, an invaluable tool to movie marketers. But Ginn said that, although Gallup's services are similar, specific enhancements will make the upstart more competitive.

Gallup's tracking surveys are conducted in 20 markets by telephone, while NRG surveys only 16 markets. Gallup also will test movie trailers, TV ads and print ads in an auditorium setting on TV monitors, rather than using NRG's practice of testing at shopping malls. Gallup's preview screening audiences will be recruited mostly from outside the Los Angeles area and, with its "800 Interactive Movie Poll," Gallup will provide exit-polling information slightly quicker than NRG can.

Gallup has already had meetings with most of the major studios, Ginn said. He declined to discuss any pending contracts or the specifics of any client work they've already conducted. Whether Gallup will make a dent in the movie research business is yet to be seen. And as one studio executive said, "Good movies perform well and bad movies don't. You can do all the market research you want. But if you don't have a quality movie, then you don't have anything."