Reviewing marketing strategies and how companies spend their marketing budget is vital as a business, big or small. Netflix is no exception. Let’s take a look at how Netflix grew to be a dominant brand by analyzing their ever-growing marketing budget.
The Netflix Marketing Budget Journey
Netflix has moved from a DVD renting company to a streaming and original content behemoth. This transition took place over a staggeringly short five-year period with the first original show being released in 2013. Netflix has announced by the end of 2018 they expect to have over 1,000 original shows and films streaming.
Netflix has long been praised for how it utilizes its marketing budget, prioritizing digital marketing, social media, and public relations. Netflix spent over $1 billion dollars on marketing in 2017. In its Q4 earnings call last year, Netflix announced it would increase its marketing spending by 54 percent from $1.3 billion to $2 billion in 2018 to “amplify the value of the content.”
“We’re seeing feedback that spending a little more on marketing is actually going to be better for the business overall because it amplifies the value of the content,” Netflix CFO David Wells told The Wall Street Journal.
$2 billion for marketing? Where could that possibly be going?
Netflix isn’t going to reveal their exact marketing proposal, but we know that Netflix breaks down their marketing in several different ways:
- Each Netflix Original show has a dedicated social media presence that reaches far past the show’s air date and engages with viewers on a regular basis.
- Email marketing is a key component of Netflix’s digital marketing approach. Emails sent about Netflix shows and films are visually pleasing and contain appropriate gifs and pop culture references that make customers want to read them.
- They provide several press releases a day with updates on shows, new content, and talent they’ve acquired.
- Preparing print and digital campaigns for each new show and film that they release as original content.
- Netflix has original content streaming to over 160 countries. That means that they have dedicated public relations and social media teams for each country and teams to promote their brand image.
- There are Netflix shows that have their own apps and meme creators to allow users to export content to share with their friends on social media.
- Capitalizing on well-known and trending quotes, Netflix invests in creative ways to market their shows. For Orange is the New Black, Netflix hired a food truck to give out free fruit-flavored pies at various locations in Los Angeles in honor of the character Crazy Eyes and her season-one catchphrase, “I threw my pie for you.”
- Netflix has dozens of market specific social media accounts and programs that speak to specific and underserved voices, capitalizing on markets that have been largely ignored by Hollywood for decades giving Netflix a strong connection to what some consider niche.
One thing Netflix is known for is its personalized algorithms. Netflix invests serious cash into making their content accessible and giving a voice to diversity and niche interests. Each dollar spent by Netflix is meant to engage and captivate consumers with new content. There appears to be a correlation between an increased marketing budget and the amount of revenue Netflix has been earning year to year. You can’t argue with numbers.
What We Can Learn from Netflix’s Marketing Budget
Most companies are doing everything in their power to trim their marketing budgets. While it’s important to keep a tight budget, it’s also important to invest in reaching customers on a deeper level.
Your company might not be spending billions on brand marketing, but there are still lessons to be learned from how Netflix spends their money.
1. Align Your Budget With Your Marketing Goals
The key to successful marketing campaigns is laying a solid foundation and building on the basics. Deliberate on the goals your company is trying to achieve – this will determine how much money should be spent and where.
Think about investing your marketing budget in:
- Display ads to promote a new product being launched.
- Sponsored and original social media posts to generate followers.
- Paid search engine ads to drive traffic to a specific product page.
- Contracting bloggers to get more organic search traffic to your company’s website.
You’ll want to put a more significant amount of the budget towards campaigns with higher-volume offers and audiences. The majority of the money spent on paid efforts is typically calculated based on the volume of clicks or impressions. Prioritize what matters, but be unique! If Netflix can hire a food truck to pass out free pies to promote a new series, your company can come up with creative ways to grab the audience’s attention. If you invest money in a campaign that provides no ROI, scrap it and brainstorm new ideas. Being afraid to fail doesn’t fit into the world of marketing strategy. Focus on what works and provides the best bang for your buck!
2. Utilize Social Media
As Netflix knows all too well, social media is an excellent platform to reach many members of your audience all at once. Running a successful social media campaign is more than posting to Facebook occasionally; it also involved knowing what’s going on in the news, what’s trending, what tone gets the best results in each area, how various social media platforms are successfully used, and how to combine all of these factors into a single cohesive strategy.
As stated above, each Netflix Original show has a dedicated social media presence that reaches far past the show’s air date and engages with viewers on a regular basis. Post content that is unique to your organization and that stays true to your brand. Sharing and engaging with consumers helps boost your brand reputation and can direct consumers to your website. But what content are you sharing on social media? If you’re not sharing your articles and blogs, you should be.
Create a strong base of information about your products with pillar articles on your own website. This allows you to feed smaller, more specific articles into those pillar articles and drive all of that website traffic you’ve been giving away directly to your website, thereby increasing sales and optimizing your marketing budget.
3. Create Original Content & Update the Old
There are a few ways to approach crafting new content. One way is to utilize the sales team. Ask what questions they get most often from potential clients during the sales process, then craft pieces of content or a blog series to answer them. Another is to utilize Google trends to establish which topics are the most current and popular, and what your audience has been searching for.
Creating new content isn’t the only option. Going back and updating old content can result in better search rankings, more links and traffic, social shares, and new customers! Keeping content up to date will show consumers that you care about providing them with the most relevant information Check your analytics to see which posts are bringing in little or no search traffic. Make a list, prioritize which content has the most potential value, and start updating!
4. Commit to Email Marketing
According to a study by One Spot, 65 percent of marketers rated dynamic content in email as their most effective personalization tactic. Every recipient of an email your marketing company sends out has a professional network of their own, meaning every person in their network presents the possibility another individual viewing the content.
Many marketers stray from emails due to the fear of them becoming marked as junk.
There’s a big difference between spamming recipients and a solid marketing campaign. If you ensure the emails are providing value, then the email campaign is being utilized properly. The best way to be sure the campaigns have value is to let them be an outlet for your content marketing. Try including original articles, videos, infographics and other pieces of original content to the email campaigns, to soft-sell to the audience versus saying “buy this product now!”
When done correctly, your marketing can bridge the gap between your brand and consumers, helping to drive your overall brand while giving consumers the care and attention they need to become loyal customers.
Give your marketing budget the confidence it deserves.