Netflix is expanding its advertising business, rolling out a handful of new offerings for marketers as it seeks to grow its share in the ad-supported video space.
Netflix vp global advertising sales Peter Naylor officially announced the new offerings during a keynote at Advertising Week New York on Tuesday.
The new formats include title sponsorships, which let a brand become the premier sponsor for a show or season. Frito Lay’s Smartfood has signed on as the first brand to take advantage of the format, being named the title sponsor for the upcoming season of Love Is Blind.
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“We know that brands want to align with specific shows that are contextually and culturally relevant to their marketing objectives,” Naylor said, drawing applause from the room when he announced the addition of single title sponsorships.
And Netflix is creating a new format it calls the “Binge” ad (it’s still a working title), which will let users watch another episode of a series ad-free after bingeing a few episodes in a row, provided they first watch a marketing message, of course.
“If you’re watching two or three episodes in a row — which we’ve all done — we say, ‘Hey, let’s serve this next episode commercial-free, made possible by a brand.’ Then we serve your heroic, epic, 30- to 60-second spot, your cinematic spot,” Naylor said. “At a time when more than 80 percent of our ad-supported members watch for two hours or more, this product will reward viewers and allow your brands to stand out.”
Finally, Netflix will bring sponsorships to its live events, beginning with its upcoming golf match featuring PGA and F1 stars, The Netflix Cup. T-Mobile and Nespresso, among other brands, have signed on to sponsor the event, with their messages integrated into the broadcast.
Notably, the brand integrations mean that they will be seen by all Netflix users, not just the ones on the ad tier, per Naylor.
“I’m in charge of the ad-supported audience that we bring to market, but this opportunity, we have the potential to reach all subscribers or viewers in a way that’s going to be integrated into the show,” Naylor said. “So it’s not really pushed, it’s integrated … it’ll have sponsors integrated into the show, it won’t be 15 and 30s [15- and 30-second ad spots], and I think that’s expected and it’ll be part of the broadcast in a way that’s natural and holistic.”
Added Jessica Padula, vp marketing for Nespresso, recalling a meeting with the brand’s CEO before signing on as the sponsor of the live event, “I said to our global CEO at the time, ‘You know, what about this, it’s maybe different than things we’ve done before, maybe it’s a little bit bold or risky, because it’s unproven,’ right. That’s what happens when you’re the first, and he said, ‘Go, take a risk, let’s try something. Let’s measure it, let’s be smart about it, let’s execute it flawlessly,’ but he was all in.”
The streaming giant, which launched its advertising tier less than a year ago, has fully embraced the business, if its presence at Advertising Week is any indication. Netflix branding wraps the outside of the venue in Manhattan (a former shopping mall converted into a conference center, at least for this week).
Inside, “Netflix Plaza” includes rooms with Halloween costumes, sports props, a screening room, a record store and an arcade, where attendees can try to win Netflix toys at a pair of claw machines.
But Netflix’s ad business is also in a moment of transition. This month, Jeremi Gorman announced her departure as the head of advertising after helping it get off the ground. Her successor is a Netflix veteran, Amy Reinhard.
Naylor says that while the company has had success placing ads (“If you want to be culturally relevant, there’s no better place to do it than having your ads nestled within the top shows that everybody is talking about,” he noted), it still has work to do.
“The next step is to set the right strategy. And that’s why we’re working closely with all of you to create a fantastic experience that both advertisers and viewers will love,” Naylor added. “Because we’re not just trying to offer what everyone else is offering. We’re trying to set a new standard to meet the market and to create new and superior ad models that drive results for our advertisers.”
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