Netflix Experiments With Advertising

Netflix has begun incorporating third-party advertising onto their envelopes. Beginning last week, DVDs to certain customers in certain geographic regions were targeted with a Memoirs of a Geisha ad and this week Aeon Flux arrived at my door step. Also this week, I participated in an online customer survey specific to that envelop flap.

I don’t know why I didn’t think of this. I don’t know why Netflix hasn’t incorporated full-flap advertising sooner. As stated below, perhaps they needed to reach a “critical mass” of customers before they could enlist big-league sponsors. Not all advertising is bad. In many cases it can offset fees… perhaps this new revenue stream accounts for Netflix lowering subscription rates.

Unlike other mailings I receive, the ad is nicely incorporated into the actual envelope instead of troubling me with additional inserts to trash. Presenting advertising without alienating customers is a bit like walking a tightrope. The current method strikes me as a win-win endeavor. However, the moment ads start appearing in my email or interfere with browsing the Netflix website I’ll feel differently.

Brandweek says: “Netflix ships one million DVDs a day,” said Netflix spokesperson Ken Ross. “Testing ad vehicles makes sense now that our subscriber base has reached real critical mass with 3.6 million customers currently and more than five million projected for next year.” Netflix said it plans to roll out more advertising and will consider selling various ad placements—on envelopes, on its Web site, in customer e-mails. The company expects to rotate creative on a weekly basis and in some cases feature multiple movie properties at the same time in a targeted manner.

6 thoughts on “Netflix Experiments With Advertising”

  1. Great idea for the ads on flaps… but I didn’t like reading that they already have plans to put ads on the site, and into my emails. Should that happen, prices better lower dramatically.

    ps: I’d love to win a TiVo ornament. Thanks for the opportunity.

  2. I have to think dillusion of the brand was the main reason why netflix has tapered in advertising so slowly. As the brand becomes stronger, they can let more ads in.

    The intermodal competition netflix will be facing in the future is huge, and anything to get better pricing is smart at this point.

  3. Great idea indeed. I think product and service is less important there is more focus on advertising since Google got so big from doing that.

  4. Sorry, I can’t remember if the survey was presented as a link via email or if it popped up through the Netflix site. It was definitely initiated via Netflix though, and not a third party.

  5. I’ve been with NetFlix since a little after they started up and I think this is a great way of advertising. It’d be nice if they had multiple envelopes that they could use. Have a sci-fi movie ad go with a sci-fi DVD, etc.

    BTW, enter me in the ornament contest

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