Netflix isn’t what you would call a quintessential marketer. For one, the streaming video service does little in the way of traditional marketing. And what it does do, it doesn’t like to discuss.
Despite accolades for its native advertising, use of data to attract and retain subscribers, and flair for creating social content that goes viral, the company remains decidedly tight-lipped in the area of marketing. But that refusal to use marketing as a force multiplier makes it all the more impressive when Netflix drives audiences to an unknown supernatural thriller as easily as it does to a popular TV revival.
Netflix under co-founder and CEO Reed Hastings has been a case study in how companies can use data to know what their audiences want and deliver the right message to the right viewer.
While the company largely relies on word of mouth, it has become proficient in creating content that gets shared and reshared. In turn, fans generate their own memes, gifs and videos that their friends then see, resulting in a steady buzz for Netflix’s original programming.
This is how “Stranger Things,” which follows a group of junior high misfits who go searching for their missing friend, became one of the most talked-about new shows of the year. While it received little advance hype, “Stranger Things” generated a cultlike following after its summer release, and fans include horror author Stephen King.
Netflix did some initial marketing around the series, including a four-hour live broadcast on Twitch, the social platform for gamers. It also forayed into virtual reality for the first time with a 360-degree video that places viewers into the creepy universe of the series.
But it was really viewers who got other people, their friends, to watch. “Stranger Things” has spawned plenty of cosplay, with fans dressing up like favorite characters, while a web tool that lets people write in the “Stranger Things” font took over social media this summer.
Netflix also used unconventional marketing to promote the third season of the dystopian series “Black Mirror,” which explores the dark side of technology. The first two seasons originally aired on British broadcaster Channel 4, but Netflix then ordered a third season of its own.
In its marketing, Netflix played on the irony of the implications of its own technology. In one spot for the series, it introduced Netflix Vista, a fictional technology that will allow viewers to stream episodes of “Black Mirror” straight to their eyeballs.
It also created an app, based on the Rate Me app from the third season of the series, that allows users to rate each other based on their social interactions. And Netflix served special “Black Mirror” ads to people who run ad blockers in an attempt to unnerve them.
Netflix has also learned how to tap into existing fandom for its revivals of prominent TV shows like “Full House” and “Gilmore Girls,” as well as its collection of original series starring Marvel characters.
For the Marvel superhero show “Luke Cage,” Netflix gave creators a space on Tumblr to display original “Luke Cage” art.
And for “Gilmore Girls” fans who have been clamoring for years to return to the fictional town of Stars Hollow, Netflix brought a little piece of it to them. It turned cafés across the country into Luke’s Diner, the café on the series, and served free cups of coffee. Ten thousand of its coffee cups included a Snapcode that unlocked a special “Gilmore Girls”-sponsored Snapchat filter.
The branded filter was viewed over 880,000 times and reached more than 500,000 unique Snapchatters, according to Snap, the parent of Snapchat. There were three times as many snap-to-unlocks as printed cups.
While Netflix doesn’t provide details on viewership, measurement firm Symphony Advanced Media said last week that “Gilmore Girls” is Netflix’s third most-watched original series in the first three days of viewing. The revival pulled a 3.59 rating among 18-to-49-year-old-viewers, according to preliminary data from Symphony Advance Media, behind “Fuller House” and “Orange is the New Black.” (Netflix has questioned the accuracy of Symphony’s approach.)
Netflix has been able to keep its marketing budget minimal thanks to the media attention its originals receive. The company spent $714.3 million in worldwide advertising in 2015, up from $533.1 million the year prior, according to company SEC filings. Still, advertising is equivalent to just 10.5% of total revenue.
In the third quarter, Netflix management said, domestic marketing expenses increased 45% year-over-year to $108 million as it builds awareness for more original titles.
It helps that many Netflix originals have been critically acclaimed, with several besting traditional TV networks and premium cable channels for Emmy Awards.
Ultimately, Netflix’s content is its biggest marketing tool, said Michael Goodman, director of digital media strategies at Strategy Analytics. The company has managed to turn out enough high-quality content to satisfy subscribers and pique the interest of non-users. It plans to release 1,000 hours of originals in 2017, up from more than 600 this year, with the goal of original content making up 50% of its offering.
Consumers are responding. In the third quarter, Netflix’s streaming revenue topped $2 billion for the first time. It also added 370,000 new subscribers in the U.S., more than the 300,000 it had previously predicted. The company has 86.7 million streaming subscribers worldwide.
Credit: Ad Age