Netflix’s Marketing Strategy: What Your Company Can Learn

Bowl of popcorn in front of a television screen showing La Casa De Papel

Today's entrepreneurs are continually disrupting traditional industries, coming up with innovative products and services that fulfil the changing needs of modern consumers. However, despite the ingenuity behind these developments, business owners often struggle to market their offerings to ad-fatigued target customers effectively. Luckily, you can take inspiration from some of the world's top brands and their outstanding marketing strategies. 

Among these pioneers is the video streaming giant, Netflix. Founded in 1997 as an online video rental service, the brand transitioned to a subscription-based business model in 1999, before making its most recent (and notable) adjustment to online streaming in 2007. During this time, it has had to adjust and tweak its marketing plans repeatedly.

Rather than battling the challenges that its shifting target audience poses, though, Netflix has capitalised on them through its unique promotional approach. As a result of its marketing success, the company now boasts 183m paid memberships in over 190 countries, making it the world's leading streaming entertainment service. Its value has soared during the current year, reaching an astronomical $196m as of April 2020 and even surpassing entertainment behemoth Disney.

The Netflix Marketing Approach

The superbrand utilises an impressive marketing budget of around $2.65bn (as of 2019) to execute its promotional activities, adopting a variety of online and offline methods to attract new and existing audiences. At the heart of this is the company's original content, which includes hundreds of shows and movies available exclusively on Netflix's platform.

In a broader context, its digital marketing strategy focuses on building strong relationships between the brand and its viewers, cultivating a unique identity through humorous messages and references to popular TV series and films available on Netflix. This familiarity adds authenticity to the brand's voice and makes it easier to engage with as a result. In this way, Netflix outshines its competitors – including Amazon Prime Video, Google and Hulu – that typically take a more formal approach to their marketing communications.

The company's offline marketing, meanwhile, promotes Netflix Originals to new audiences using well-placed outdoor banners, and even captivating, unexpected outdoor ambient marketing.

Customer Profile

Netflix's subscribers are equally male and female, falling within a wide age range of 18 to 54. Viewers span all levels of education, with users on opposite ends of this spectrum often indulging in the same content. Customers are also on even footing with regards to household incomes, though there is a slight increase in users of higher income brackets, as is typical for a subscription business. This large demographic is testament to the company's success in offering an impressive variety of content that appeals to large volumes of users.

Customers tend to be loyal to the brand, too, with the majority of surveyed users in the US claiming that they would keep their Netflix subscription even if the monthly price increased. Indeed, most say that they would still use the service if adverts were added, regardless of whether the monthly fee would be reduced or stay the same.

The brand captures both quantitative and qualitative data of its users' behaviour through its desktop site and mobile app to support its extensive market research efforts. Analysis of this information is then used to adjust Netflix's advertising strategy to better target ideal customers. The company mostly leverages primary research to this end, with its in-house research team regularly exploring potential improvements in its studio production, marketing, content delivery, application domain and more.

Marketing Mix

The success of Netflix's strategy lies in its ability to foster strong bonds with customers, and efficiently recruit new users. This is achieved through omnichannel delivery of digital communication, clever partnerships with major companies, compelling original content, and attention-grabbing outdoor advertising, as detailed below:

Ad-Free Digital Delivery

Rather than fighting against the current of modern viewers' ad fatigue, Netflix takes advantage of this. The streaming service effectively attracts more users to its platform by offering its content without any adverts, regardless of consumption time. This has become a major part of its clear value proposition; in the brand's own words, "you can watch as much as you want, whenever you want without a single commercial – all for one low monthly price."

In addition, the service is accessible across all digital devices, making it even easier for mobile users to consume content in whichever way they prefer. This is also an example of the company's effective evaluation and use of its market research conclusions

Social Media Marketing

Netflix makes use of the popular social media channels that its target customers frequently use, aiming to inspire engagement from online audiences. Primary platforms include Instagram, Snapchat, Facebook, TikTok, YouTube, and Twitter.

Indeed, the company crafts a unique personality online, posting entertaining and amusing informal imagery and text, such as memes and throwbacks, that sharply contrast the more stiff, pre-prepared digital marketing content shared by its competitors. The content and format of Netflix's posts are also tailored to the platforms that they are shared on, taking advantage of the focus and approach of each channel, while also ensuring omnichannel delivery of its campaigns. 

Netflix heavily interacts with followers, too, as well as listens closely to their comments and feedback to further curate the brand's digital persona.

Digital Segmentation

Understanding that segmentation is important, the brand maintains separate profiles on the same social media sites for different content topics. In fact, Netflix has individual accounts for some of its most popular original TV shows, as well as entire movie and show genres. This allows followers to tap into the posts that are most relevant for them, and personalise their online experience with the service. 

In addition to this targeting, the brand also adopts geographic segmentation, with separate accounts for different countries and regions. These profiles feature local languages and utilise regional user preferences for better results.

Partnerships

Netflix invests in collaborations with digital partners to bring its service offering to the attention of new customers within broadening territories.

One such collaboration was its 2017 augmented reality experience with Snapchat, a campaign that visually immersed the social media channel's users in the set of Netflix Originals show Stranger Things. This was used to promote the series' new season ahead of its release. The hype around this partnership contributed to new awareness of the programme and brought higher viewership as a result.

Its most recent partnership is with Korean tech giant Samsung. Their 2020 agreement sees Netflix become the brand's mobile entertainment partner, in a bid to beat upcoming streaming competitors. Samsung Galaxy smartphone users will have exclusive access to additional content from Netflix Originals shows and movies, such as behind the scenes footage, while the partnership will also allow for further integration of the entertainment provider with Samsung devices.

Original Content

A major key to Netflix's business success and marketing excellence is its creation of captivating, unique movies and TV shows, such as House of CardsNarcosOrange is the New Black, and The Crown. The brand takes this endeavour seriously, investing an enormous $17bn in 2020 to develop and produce this content. 

Available exclusively via the streaming platform, it is among Netflix's major competitive advantages and growth drivers. Not only does this approach retain existing customers, as they cannot find this unique content elsewhere; it also effectively attracts new subscribers who want to explore the hyped programmes in question.

Outdoor Advertising

In addition to its high-cost, highly targeted digital marketing activities, Netflix also invests in valuable offline advertising that captures the attention of broad audiences. This marketing method is most suitable for attracting new users to the platform and can lead to satisfactory results when ads are placed in areas of particularly high traffic.

The entertainment giant utilises billboard and bus stop ads to raise general brand awareness, as well as promote specific content available for streaming.

Ambient Marketing

Netflix's outdoor marketing occasionally crosses the border into ambient marketing, a popular form of guerrilla marketing that draws attention by placing unexpected promotional material in areas that are not typically used for advertising. Consumed by vast audiences, this method ensures greater marketing message retention among viewers, due to its startling nature. 

Once again, these efforts usually focus on promoting Netflix Originals content. For example, in 2015 the brand created a street art visual display along the side of a building in Paris – a high area of Netflix customers – to build anticipation for the third season of Orange is the New Black. In addition to scrawling the show's title and Netflix's branding on the façade, the design incorporated what appeared to be 12 physical prison cells (reflecting the show's subject matter). In a live stunt, supposed female inmates donned in orange jumpsuits were led to these cells and posed as part of the display, clearly visible to curious Parisian onlookers below.

Netflix's Marketing Style

The streaming service habitually reinvests a significant portion of its global revenues into marketing, prioritising the creation of high-quality original content, while spending lesser amounts to ensure the content's promotion to appropriate audiences. 

Netflix is proudly self-sufficient, too, conducting market research and executing campaigns through its specialised in-house teams and seldomly seeking the support of external agencies. As a result, it has become well-known for this approach, which is unique among its main competitors.

The company offers budding businesses a prime example of how to find success in perfecting a distinctive identity, making their value proposition explicitly clear to consumers and sticking to their most suited methods of marketing rather than mimicking their competitors' approach.

Key Campaign

The entertainment giant once again showcased its marketing mastery during a particularly successful 2016 campaign, promoting its original series House of Cards. The campaign sparked interest, discussion, and engagement from online audiences, ultimately attracting viewers and brand awareness.

The campaign's timing was exquisite. Featuring the show's political protagonist Frank Underwood and his fictional bid for US president within the series, it was released to audiences during the lead up to the real-life 2016 US election. This allowed for cross-over discussions between the show's storyline and reality, taking advantage of significant digital traffic around political themes and redirecting a portion of this attention to the series.

Promotional material included a minute-long video shared on YouTube that showed Underwood relaying his election promises, blended with snapshots of the show's action-packed scenes. The campaign also saw the creation of a website (FU2016.com) dedicated to the political bid, complete with media assets for fan consumption, as well as a wide-spread social media campaign championing the hashtag #FU2016. The simple visuals created were effective in drawing reactions from viewers, as they matched the unique imagery of the show, while also uncannily mimicking the political banners distributed by real-life candidates Donald Trump and Hillary Clinton.

Although Netflix does not publicly release results of its marketing efforts, the amusing, controversial campaign certainly attracted significant attention online and garnered engagement from existing fans of the show, as well as new viewers, celebrities and influential figures. Around 15,000 posts were shared on Instagram using the hashtag #FU2016, with countless tweets, retweets and other engagements received on Twitter. The campaign won the Integrated Grand Prix at the 2016 Cannes Lions International Festival of Creativity and was a Campaign of the Year Finalist at Ad Age's 2016 New Creativity Awards.

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Overall, Netflix expertly executes online and offline marketing, utilising in-depth market research to hone its approach for maximum success. The brand creates a strong, identifiable voice and identity through its promotional communications, enhancing its authenticity, and contributing to the development of strong relationships between the brand and its users.

Small businesses can learn from the streaming leader and build a promotion strategy around a central competitive advantage, as Netflix does with its original content. Entrepreneurs can also adopt the brand's ingenious sense of creativity and find success in adopting a varied marketing mix to support its main objectives.

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