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Netflix's formula for marketing success

Posted by Kyle Montero on September 17th, 2013 at 5:43 pm

Netflix has received much praise for its marketing efforts over the past two years -- as it certainly should. We all remember that fateful day back in 2011, when the company separated the DVD and streaming accounts while raising prices for both, which lead to one of the ugliest consumer backlashes to date.

In order to recover from this misstep, the company stepped up its marketing efforts, making huge strides in the areas of brand affinity and customer acquisition. Additionally, Netflix began creating its own original series, which aren't haphazard productions in comparison to traditional studio offerings but award-winning works of art that recently snagged two Emmys away from major, much-loved dramas like "Game of Thrones" and "Breaking Bad."

One man who plays a huge role in Netflix's recent successes is Kelly Bennett, the company's CMO. During the closing power keynote at the iMedia Entertainment Summit in Hollywood, Calif., Bennett discussed the company's marketing tactics and described the power of paring marketing data with creativity to produce some amazing results.

To begin, Bennett explained why Netflix is such a disrupter in the space. One of the major reasons is because the company surprises people. It has done so recently by creating well-received original programming and releasing all episodes of its shows at once across the globe. According to Bennett, although Netflix is a disruptor, it is not the "bad guy." The company does not push people to cancel their cable subscription. In fact, the company can be a great partner to traditional studios and content providers.

To elaborate, Bennett discussed the mutually beneficial nature of Netflix's partnership with AMC. According to Bennett, "People discovered 'Breaking Bad' over the years," but many viewers failed to keep up with every episode. In order to catch up, viewers look to Netflix. In addition, Netflix helps partners by reducing piracy in the markets in which it operates because of its low cost and ease of access.

Bennett then accredited Netflix's success to "living at the intersection of technology and entertainment," and he discussed the groundbreaking convergence of Silicon Valley and Hollywood. Because Netflix is a Silicon Valley business, its company culture is very different from that of a Hollywood studio. For instance, Bennett explained Netflix's "Sports Team Analogy to Hiring" in which the company "hires the very best players at every position, pays them top of market, and, if at any given point it is determined that the player is not the best player at the position, Netflix pays them a very generous severance package, says thank you, and draws a new card."

In addition, because Netflix is inherently digital, it thinks digital first, which leads to much innovation. For instance, when producing programming like "House of Cards," the company embraced the fact that the series feels like a 13-hour movie due to the way it was written. Because the company knows that its viewers watch multiple episodes in a row, it makes "content like a novel, which is more powerful," because the company's programming is not restricted to the traditional 47 minute format.

Bennett then moved on to discuss the importance of big data. Netflix knows more about its customers than any network on TV. But data alone is not the Holy Grail. According to Bennett, the Holy Grail is found when combining the "technology of Silicon Valley and the creativity of Hollywood."

Some of Netflix's most innovative marketing tactics came with its programs "House of Cards" and "Arrested Development." For the former, according to Bennett, there was no launch playbook. For Netflix, "Launch day is really just whenever someone starts watching." As a result, Netflix isn't about teasing users before launch, so it held off on its media campaign until Midnight, February 1, when "House of Cards" went live. But how does a company sustain buzz when it launches all show episodes at once? One tactic, Bennett explained, is by playing clips of "House of Cards" after episodes of "West Wing," targeting fans that like political dramas.

Lastly, Bennett addressed Netflix's focus on creating "Brand Love." To do so, the company initiated its "Watch Responsibly" campaign, which warned against irresponsible Netflix watching like "binge watching" and "Netflix Cheating," where you watch programs before others with whom you promised to watch. Here is one of the videos Bennett showed:

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Furthermore, the brand conducted a study about people who "cheat" on Netflix, which lead to the following video on Netflix "adultery" on NBC News. Lastly, this video lead to this hilarious Jimmy Kimmy offshoot:

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One Response to “Netflix's formula for marketing success”

  1. I think this is so poignant -- being the disruptor but not the bad guy -- playing in the space in new ways but not pushing people out of the space.

    This is one reason I like being part of a group like Vistage. You get to collaborate with other thought-leaders -- some of whom may actually be direct competitors -- and encourage each other and hold each other accountable. It’s not quite the same thing -- but I wonder if there are ways in which we can disrupt the market but also work together for a greater good.

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