Netflix’s need for revenue could lead to Stranger Things!

May 17, 2022 / Industry Insights / FOTW

Unless you’ve been living under a marketing rock, you’ll have seen that Netflix recently announced its first subscriber loss in a decade. 200,000 viewers, to be precise. A combination of a natural viewer fall off following the lockdown boom, disruption to its Russian operations, a brutally competitive subscription TV landscape and, oh yeah, terrifying inflation rates, mean that the streaming giant needs to rethink its business model.

Advertising clearly beckons. But who wants a Bond car chase interrupted by an ad break? Or a Bridgerton kiss cut short by ‘a word from our sponsor’? Not this viewer. So how can Netflix generate revenue without killing its customer experience? And what does that say about the future of advertising in TV shows and films?

A return to product placement?

Of course, one way not to interrupt the Bond car chase with an advert for a car is to make sure the Bond car itself is an advert. Product placement in TV and films isn’t new. It started in the 1930’s when Procter & Gamble sponsored daytime dramas to feature their detergent – leading to the ‘soap operas’ that have entertained us since. And it’s proven to be a seamless, canny marketing device. Countless studies show that this immersive, non-disruptive approach to brand advertising is a great way to increase viewer awareness, engagement, recall and purchase. But.

But, product placement deals historically had to be made really far in advance, to work in line with long-term production schedules. And that doesn’t work so well in an era of supply chain shortages and fickle consumer demand and the need for a more nimble, agile customer experience. So, what’s a Netflix biz exec to do?

The new product placement – In scene and in frame Ads

Thankfully, there’s a new suite of ‘in view’, updateable technologies which can create personalised, seamless ad experiences which engage viewers at moments of peak, immersive relevance. There are two main types at the moment:

1. In Scene Advertising is the post-production insertion of a brand into a scene, for example, as a dynamic billboard in shot. These billboards could be rented out for fixed term contracts to different brands and sold at different rates dependent on a show’s popularity and shelf life. It’s a great, rolling revenue stream. And brands can update the products being advertised according to the time of year, news cycle and so on, to be even more relevant and engaging to viewers.
   Subscription platforms Peacock and Amazon’s Freevee and Prime have started offering In Scene Advertising services. Brands such as M & Ms have inserted products in Amazon original content such as Reacher, Tom Clancy’s Jack Ryan and Bosch. And the platform has reported a 14.7% uplift in brand purchasing intent for one (unnamed) consumer goods firm.
2. Meanwhile, Frame Ads are ‘in programme’, live adverts that typically play during quieter moments or during the credits as the programme frame is reduced to allow another logo, image or message to be seen in the display area. Frame Ads allow brands to deliver contextually-relevant marketing messages and offers by harnessing live, first party viewing data which could engage viewers based on location or even sentiment. For example, an awards show host could mention a beauty product, which would then appear as Frame Ad purchasing opportunity on screen.

But, beware the ‘persuasion knowledge’ trap

What’s not to love about this new advertising tech? Well, like with any shiny new toy, it’s not about the toy but the way you play with it that counts. If Netflix does follow Peacock and Amazon’s trailblazing path, it needs to be careful to avoid triggering a state of ‘persuasion knowledge’ where viewers get annoyed because they know they’re being sold to and their viewing experience is affected. But, how do they do that? By being seamless, relevant and timely. By being customer experience-led. And by adjusting content and assets to the relevant channel and audience in hand.

And, what about the ethics?

Finally, as ever, just because we can, does it mean we should? Is this style of subconscious advertising a good route to go down in terms of over-consumerism? Of course it works for brands, but it’s worth considering how to ensure it’s executed responsibly, sensitively and aesthetically in terms of the viewer and their experience. If the technology is used in old content, do adverts need to be period sensitive?

Keeping these questions in mind and getting the approach right will become even more important as in programme advertising becomes even more sophisticated and more popular. Brands will need to experiment and innovate to ensure their TV strategy is targeted, agile, flexible and delivers an optimal viewer experience, to maximise their reach and engagement. Or risk turning off those viewers who are turning on.

Here at Fall Off The Wall, we’re certainly following these principles as we trial state of the art product placement advertising opportunities for our market leading clients. If you fancy hearing more about how we can help you stay abreast of the latest brand marketing trends, give us a call on
01582 881144 or drop us a line at hello@falloffthewall.com.

We’ll get the popcorn on.