Netflix Final
- 1. Kelsi Bledsoe, Michael Hooper, Kyle McNay, Ashley Phenix 1
- 2. EXECUTIVE SUMMARY The 2011 campaign for Netflix is designed to increase sales and brand awareness. Netflix is dedicated to offering the best in DVD rentals and live stream- ing with the cheapest pricing. This campaign is designed to keep in line with the organization‘s vision that is ―Our appeal and success are built on providing the most expansive selection of DVDs; an easy way to choose movies; and fast, free delivery.‖ Because there is a campaign currently running, we have new ideas are making suggestions about some changes we would like to see in the current campaign. There are a few primary reasons why people have a lack of awareness of the services offered by Netflix. First the current campaign running for Netflix might miss some of the target market; therefore there advertising might need a twist to reach their target market. We would like to see some extensive Inter- net advertising that could created some revenue for Netflix and get the word out about their ―streaming live‖ feature for only $7.99 a month. We would also like to see some TV ads ran and with working closely with the stations we will be able to pinpoint where we would like our advertising to be seen. Also, we want to get the most GRP‘s for our money. Finally, we would like to incorporate this idea of QR codes on movie-sized candy. This would be a bit of a twist in the norm for advertising, but that is what you sometimes need. We will go more into detail on all of our ideas for advertisements later in this proposal. Ultimately, our goal is to increase the number of customers for Netflix. Furthermore, we feel that Netflix is not reaching all of their intended target audience. This campaign will also focus on reaching out to the nation and letting everyone know about the services offered. In an attempt to spread aware- ness to the target audience, our hope is that it will create a behavioral change and influence the nation to take advantage of these great services offered by Netflix that has been helping successfully renting for years. 2
- 3. TABLE OF CONTENTS COMPETITOR ANALYSIS Situation Analysis Industry Overview………………4 Research………………………....8 Client Profile…………………….11 Competitor Analysis…………….18 Target Audience…………………25 Objectives………………………………..28 Target Market Strategy………………….29 Marketing Mix…………………………..32 Media Strategies………………...33 Creative Execution………………37 Implementation………………………….42 Evaluation……………………………….46 Closing Summary……………………….48 3
- 4. SITUATION ANALYSIS COMPETITOR ANALYSIS INDUSTRY OVERVIEW Brief History Reed Hastings, Marc Randolph, and Mitch Lowe created Netflix in 1997 in Scotts Valley California. Customers paid for each rental separately at first. In September 1999 the option for monthly subscriptions first appeared. The pay-per-rental model was dropped completely by early 2000. Netflix served around 1 million subscribers near the end of 2002. That number had grown to ten million by the beginning of 2009. Time magazine's "Time 100" named Reed Hastings one of the one hundred most influential global citizens for the list of 2005. Size of Industry There has been various forms of video distribution for many years, however, this form of digital distribution is relatively new to the market. It is increasing in popularity and a accessibility largely because of broadband internet. Before it was mainly pay-per-view and on de- mand that allowed instant movie choices from home. Competitors: A similar online DVD rental model emerged from Blockbuster in August 2004. Soon companies such as Wal-Mart and Amazon, among other companies, attempted to mimic the online model as well. The Movie Value Pass was developed by Hollywood Video in 2004. This al- lowed customers to rent up to three movies for a flat monthly fee. Also becoming a popular compet- itor to Netflix was Redbox. In 2004 4
- 5. SITUATION ANALYSIS COMPETITOR ANALYSIS Legal/Regulatory Issues Seasonality Stage in Product Life Cycle Frank Chavez sued Netflix Most industry analysts believe Due to Netflix‘s vast growth over the for false advertising. The company Netflix to be entering into a plateau- past ten years, the company is now considered did however claim "unlimited rent- stage in regards to new subscribers. to be in the maturity stage of its life cycle. als" as an option. This process known Their numbers will likely level out go- They have dominated the movie rental industry as "throttling" can give priority ship- ing into the third quarter of 2011. How- by surpassing their competition in not only ping to customers who rent fewer ever, due to seasonality, there is likely to price but services and features. However, new discs per month. In 2006, Netflix be a spike in subscribers going into the and former competitors are beginning to copy filed a patent infringement lawsuit colder months of the year because of the those features that set Netflix apart. For any against Blockbuster for using the appeal to satay indoors.. company at the maturity stage it is important to technology behind the Netflix queue's defend their market share while maximizing as well as the company's model of their profits. communication and delivery. 5
- 6. SITUATION ANALYSIS COMPETITOR ANALYSIS Growth Potential/Forecasts Over the next five years, the analysts that follow this company are expecting it to grow earnings at an aver- age annual rate of 31.0%. This year, analysts are forecasting earnings growth of 1.1% over last year. Analysts ex- pect earnings growth next year of 4.4% over this year's forecasted earnings. Economy The economy has been rocky recently which has caused movie watchers to look toward cheaper alternatives to viewing their favorite and recent films. For this reason, Blockbuster has struggled due to their expensive rentals and late fees. Theater attendance has gone down because of their ticket prices rising. The down fall of the econo- my has benefited Netflix because of their low prices and desire to pro- vide for the customer‘s needs. 6
- 7. SITUATION ANALYSIS COMPETITOR ANALYSIS Societal/Cultural Considerations With the current state of the economy, there has evolved a movement to cut spending in nearly all areas of life; political and personal. Most industries have felt the strain caused by this penny pincher attitude, but there is one that has made out fair- ly decently; the movie industry. It has been proven throughout the years that in times of hardships people will seek out a means to escape those conditions. Movie ticket sales have remained stable and in some cases increased. Combined with a need to cut back and desire to temporarily escape the world, instant streaming services have become an enticing budget friend- ly option. Low monthly fee services like Netflix Instant Stream and Hulu Plus have been praised as low cost alternatives to high priced cable access. 7
- 8. PRIMARY RESEARCH COMPETITOR ANALYSIS SURVEY Out of the survey that was conducted, 42 percent were between 25– 35 years old. This is exactly what we wanted to see because this is our target audience age. We also found that most Netflix users also use Redbox to supplement their movie wants. One of the partici- pants said, ―I use Hulu to watch shows I have missed. I use Netflix for the online movie streaming and the occasional newer DVD de- livered to me. I use Redbox for when I want to watch a movie and I don‘t want to wait a few days for it to come in the mail with Net- Package: We also found that 53 percent have flix.‖ the $9.99/mo. package that allows unlimited in- stant streaming and one DVD out at a time. The next most popular was the $14.99/mo. package with unlimited instant streaming and two DVDs out at a time. 8
- 9. PRIMARY RESEARCH COMPETITOR ANALYSIS SURVEY Streaming Device: 100 percent of all participants were aware that Netflix has instant streaming and 100 percent of all Netflix users use the streaming feature. The top two devices used are laptops (33 percent) and Wiis (33 percent) Overall Opinion: In our survey not one person said they did not like Netflix, 84 percent said that liked Netflix and 15 percent said they held no opinion. 50 percent of the participants use Netflix to watch movies and 43 percent use Netflix to watch TV shows. 81 percent knew that the first month was free while 18 percent did 9
- 10. PRIMARY RESEARCH COMPETITOR ANALYSIS SURVEY COMMENTS ―While this is highly unlikely to very happen, but it would be great to show more current content of TV series outside of just Starz programming via the ―Because of Netflix, I‘ve been introduced instant streaming process. In addition, you can never go wrong with increas- to more movies and TV programs that I ing the streaming library even more, at least in my opinion.‖ never would have before and have actually purchased more because of it. It's easy to use and available to access on a wide range of products. ―I wish the variety of TV shows were greater— we don‘t have cable, etc., and it would be nice to watch more short TV shows, as opposed to having to watch a 2 hours video if we feel like watching something. ―I like it. I think that it was a really smart thing to change over too, but I wish more movies were available on instant play.‖ 10
- 11. CLIENT PROFILE CLIENT PROFILE Netflix Inc. is a publically traded American company that offers a monthly subscription video rental service that includes DVDs by mail as well as unlimited TV episodes and movies streamed instantly over the internet. The company was founded in 1997 by Marc Ran- dolph and Reed Hastings. The company‘s headquarters is located in Los Gatos, California. As seen in the chart, Netflix has continued to grow over the past 6 years. The original Netflix site that launched in 1998 was designed as a pay-per-rental service with prices set at four dollars per rental and an additional two dollars in postage. Late fees, which have been attributed as Hastings inspiration for creating the company, were also included during the companies first year. In September of 1999, a monthly sub- scription option was offered to customers; this became the company‘s sole payment option as they ended their pay-per-rental option the fol- lowing year. 11
- 12. CLIENT PROFILE Netflix now offers a standalone instant video streaming option PRODUCT for $7.99 a month. The Netflix streaming service can be With their monthly subscription plan, Netflix ended their played on a multitude of devices. The devices range from late fees and shipping cost. Their subscription plans range in Window and Mac computers to gaming consoles and mobile price from $7.99 to $55.99 a month. Each plan has a different devices. The iPhone and iPod are the first handheld devices to amount of DVDs the subscriber can have out at a time; they receive the streaming service. Netflix has expressed interest in range from one to eight DVDs. Every subscriber now has un- expanding to android devices but this expansion has been de- limited DVD rentals and can keep them for as long as they like; layed due to security concerns of androids open platform. there are no due dates, but subscribers must mail one of the Plan Price DVDs they are allotted back before they can receive a new one. 1 DVD (limit 2 per month) 4.99 Netflix has recently added blue-ray disc alongside their DVD Watch instantly Unlimited (no DVDs) 7.99 1 DVDs +unlimited instant watching 9.99 options, but this comes with an increase to the monthly sub- 2 DVDs +unlimited instant watching 14.99 scription price. 3 DVDs +unlimited instant watching 19.99 4 DVDs +unlimited instant watching 27.99 5 DVDs +unlimited instant watching 34.99 6 DVDs +unlimited instant watching 41.99 PLAN PRICING CHART 7 DVDs +unlimited instant watching 48.99 8 DVDs +unlimited instant watching 55.99 12
- 13. CLIENT PROFILE Netflix has over 20 million subscribers and Netflix Key Financials (In USD as of 12/31/2010) employs more than 2000 people at its headquarters and Income Statement shipping centers. As of 2009, Netflix‘s revenue is 1.67 Revenue 2,163m Net Income 161m billion dollars. Their operating income was 194 mil- EPS from Continuing Op- 2.96 lion dollars; net income 116 million. Their total assets erations EPS - Net Income - Dilut- 2.96 are worth 680 million dollars, and their total equity is ed Revenue per Share 41.17 199 million dollars. Balance Sheet Total Assets 982m Total Liabilities 692m Shareholders' Equity 290m Total Assets per Share 18.61 Net Assets per Share 5.50 Cash Flows Cash from Operations 276m Cash from Investing -116m Cash from Financing -100m Capital Expenditures 34m Cash Flow per Share 5.09 http://www.mergentonline.com.oberon.ius.edu/companydetail.php?compnumber=105639&pagetype=synopsis 13
- 14. CLIENT PROFILE NETFLIX ADVERTISING EXPENDITURES Dollars (000) Total Network TV Cable TV Syndication Spot TV Netflix 83,140.8 29,740.2 20,813.2 23,741.6 1,583.4 Nat'l News- Network Ra- Nat'l Spot Dollars (000) Magazine Newspaper Outdoor paper dio Radio Netflix 15.7 7,108.6 138.2 As you can see, the majority of Netflix‘s advertising budget is dedicated to TV advertising. They feel that if the potential customer is already sitting in front of the TV, streaming movies through their TV is something they would interest them. POSITIONING AND NEW DEVELOPMENTS One Netflix user said, ― Cutting edge, New concept.‖ This is exactly the positioning Netflix desires. Our world looks for the new and cutting edge stuff in life. To maintain this positioning Netflix is currently increasing instant streaming movie availability. They are actively working out deals and contracts with various production studies to gain rights to new releases and TV shows. 14
- 15. CLIENT PROFILE Current Advertising CREATIVE STRATEGY Netflix always uses it‘s signature red with white lettering as their products symbol. This potentially may conflict with Redbox be- ing red, however Netflix was established first. They never use a signature tagline, but cater their tagline to whatever they are wanting to promote in their advertising. As we can see from the examples they are strongly wanting to illustrate their instant streaming feature through various devises. 15
- 16. CLIENT PROFILE Netflix has received multiple awards over the years, as well as several honorable mentions by major media outlets and consumer watch groups. In February, 2010, Netflix was named the number one ecom- The National Retail Federation named Netflix merce company for customer satis- the Retail Innovator of the Year in 2007. faction by the American Customer Satisfaction index. Time magazine even named Roku‘s Netflix They were rated as the number one Player as one of the top 10 gadgets of 2008. online retailer in 2007 by Nielsen Online. 16
- 17. SWOT Strengths Weaknesses Leading in market shares of online rentals Older demographic doesn‘t understanding their concept Low fixed costs Watch Instantly feature only works for a small selection of movies Largest DVD selection in the world Speed depends on consumers Internet connection 90% of DVD's are received by customers within one day of Presence in only DVD segment ordering No live/new content as compared to Hulu, Apple TV, Amazon, etc. Strong, easy to use website Threats Opportunities USPS postage price is unpredictable Purchase of Blockbuster. Other larger retailers launching into similar space (Wal-Mart) Pricing segmentation Online digital distribution (iTunes, Napster) Online distribution and referrals Redbox kiosk‘s are everywhere (get exact number) Expanding to Video Game rental list Trouble providing enough copies of new, popular movies. 17
- 18. COMPETITOR ANALYSIS With Netflix on the rise, other companies had to think fast. We would Compared to businesses who rent movies, Netflix is new and like to focus on Redbox as the primary competitor. This company innovative. When the company started in 1997, the idea of rent- came into play right as Netflix was starting to make it national. Their ing movies solely through the mail was nowhere in the market. main threat to Redbox is their convenient locations and the ability to Their next venture of streaming movies directly to the where the have new releases before Netflix has rights to send them to customers. consumer was sitting solidified Netflix as a competitor for other Next we want to focus on Blockbuster as the secondary competitor. movie rental companies to watch out for. Originally this would have been another primary competitor; howev- er, they were a little slow to keep up with the rise of cheaper and more convenient forms of movie rental. VS. VS. 18
- 19. COMPETITOR ANALYSIS Primary Competitor: REDBOX NEWEST FEATURES Free app to view and reserve movies HISTORY- Redbox is a privately owned movie distributor that has been around since 2002. Their main goal is to offer conven- Downloaded more than two million times ient movie rentals by having self-service kiosks everywhere. Create and account on redbox.com and earn a free rental Redbox first made their debut at McDonalds. Next Redbox ap- Redbox mobile club- text ‗Redbox‘ to 727272 peared at gas stations. Now Redbox kiosks are appearing at al- Can text ‗Redbox‘ to 50101 to find the closest kiosk most every gas station, McDonalds and grocery store FACTS- Each kiosk holds 630 discs, representing up to 200 titles You can buy movies, including new releases and blue rays, for half the in-store retail price More than 26,000 locations Kiosk is present at popular landmarks such as the Empire State Building in NYC to the Willis Tower in Chicago 19
- 20. COMPETITOR ANALYSIS Secondary Competitor: BLOCKBUSTER HISTORY- Blockbuster was founded in 1985 and was a leading provider of in-home entertainment. All stores are open 365 days a year with hours from 10am to midnight, allowing customers the FACTS- guarantee that they will always be able to rent a movie. The mer- * Consumers can rent movies by chandise selection is customized to fit the needs of the local mar- Mail ket. On Jan 1st, 2005 the company eliminated late fees at the com- At kiosks pany-operated stores. In 2008 Blockbuster introduced their kiosks. Blockbuster on demand In-store th ** On March 10 , 2011 Blockbuster filed for chapter 11 Bankruptcy. * Consumers can subscribe to save money 1 disc- 11.99 2 disc- 16.99 3 disc- 19.99 20
- 21. COMPETITOR ANALYSIS Blockbuster Key Financials (In USD as of 12/31/2010) Income Statement Revenue 3,549m Net Income -623m EPS from Continuing -3.13 Operations EPS - Net Income - -3.15 Diluted Revenue per Share 16.13 Balance Sheet Graphs found at http://www.mergentonline.com Total Assets 1,122m Shareholders' Equity -492m Total Assets per Share 5.12 Cash Flows Cash from Operations 12m Cash from Investing 4m Cash from Financing -38m Capital Expenditures 29m Cash Flow per Share 0.05 21
- 22. COMPETITOR ANALYSIS Netflix Redbox Blockbuster Price Plans from $7.99 -$ 55.99 $1/night $5+ per night $1.50/night- blue ray Subscription: $11.99 - $19.99 per month Form of Distribution Mail, no due date Self Service Kiosk Mail Instant stream On Demand Positioning Cutting edge, New concept Super convenient Expensive rentals, inconsistent Target Market Male/Female 17 - 45 Male/Female 17 - 45 Male/Female 17 - 45 Key Features 1st Month Free Convenient 2/wk Free trial subscription Stream through over six products Locations everywhere 4 different forms of rental Features movies, TV shows and more Everyday locations No late fees (at select locations) Stock Price NFLX $236.48 Private BLOAQ $0.04 22
- 23. COMPETITOR ANALYSIS Netflix is the leading company in DVD rentals and Streaming Live via the Internet. However, competitors are catching up quickly and some changes need to be made. Netflix is in the process of adding video games and education pieces to their rental list and this is a large part of the market that is being missed. Consumers want to be able to rent video and computer games at any time. Consumers also want the luxury of being able to rent anything before purchasing it to see if they like it. Of course with Netflix there are never late fees so you can keep your rental as long as you would like. http://www.scribd.com/doc/40218865/Building-Brands-Adage-whitepaper 23
- 24. COMPETITOR ANALYSIS ADVERTISING EXPENDITURES Dollars (000) Total Network TV Cable TV Syndication Spot TV Netflix 83140.8 29740.2 20813.2 23741.6 1583.4 Redbox 3867.0 1.0 Blockbuster 25296.8 17044.9 2669.1 407.0 Nat'l Newspa- Nat'l Spot Dollars (000) Magazine Newspaper Network Radio Outdoor per Radio Netflix 15.7 7108.6 138.2 Redbox 27.1 3839.5 Blockbuster 0.4 420.4 437.5 4264.0 536.0 24
- 25. TARGET AUDIENCE PRIMARY TARGET AUDIENCE The target audience of Netflix is males and females ages 18 -45 that have access to the Internet. The most vulnerable of targets are busy parents who just sign in online and choose one of thou- sands of movies Netflix has to offer. These consumers are all ini- tially interested in the same thing, convenience. They love the thought of never having to leave the comfort of their own home for such a small price to pay. They want to be able to watch their fa- vorite TV shows and sitcoms at any time with no interruptions. These main consumers have the extra money to spend on such a luxury without having to worry about paying other bills. Unfortunately, they would be quick to change their subscription if something better came along, thus why Netflix must stay on top of their game. Consumers have noted that the raising postal cost does worry them and they will be stuck with the bill. 25
- 26. TARGET AUDIENCE 26
- 27. TARGET AUDIENCE SECONDARY TARGET AUDIENCE Families are taking advantage of Netflix and bringing family movie night back into the home. Netflix is making this possible with very little stress. Families love the inexpensive rental prices as well at the reliability of the company. Netflix ships around 1.9 million DVDs a day and that can get pretty hectic but they are able to keep things in order and that‘s what keeps the customers coming back. Customers have also stated that the Netflix website is wonderful and very easy to guide their way through to find what they want. The key is to make it simple and get it right for the customer. 27
- 28. OBJECTIVES Marketing Advertising 5. Use mobile ads to increase awareness of Netflix‘s instant streaming ser- 1. Have a working mobile application on the top 10 An- vice on particular mobile devices: Cell phones- which are owned by 85 droid devices by the end of the campaigns first year. percent of all adults, Tablets- which are owned by 4 percent of all 2. Highlight the competitive price and variety of content adults. Ads will include notifications that the current free trial offer that Netflix offers compared to their competition by will run through the campaigns first year. including these details in every message. Media Promotion 3. Increase our share of voice by 30 percent by the end of 6. Reach 90 percent of the target audience at least twice with messages the campaigns first year. detailing Netflix‘s instant streaming as well as its future gaming rental 4. Increase the frequency rate of all current advertising service. messages by 50 percent from 4 to 6, and extend our reach 10 percent from 80 percent to 90 percent. 28
- 29. TARGET MARKET STRATEGY As any current Netflix user will say, the product my not be one of a kind, but it blows all approaching competitors out of the water. What we want to do is take potential subscribers from knowing about and being interested in Netflix to pur- We are here chasing and becoming active subscribers. What makes Netflix unique? It is the 12 different forms of streaming devices that Our Goal Graphic from ww.tvb.org bring videos straight to your screen. We are focusing on individuals between the age 18 and 45 year olds as well as families. These groups already watch movies and rent or buy DVDs. Netflix needs broadband internet to function. Currently there are over 70 million households with the necessary high speed internet to at least one computer, that is major potential. A good way of judging our potential is to look at who is already spending a little extra money monthly. We should look at who is subscrib- ing to cable and satellite companies because they are already willing to spend money on a extra home entertainment. There is about $68 bil- lion spent on these companies. There is great potential for instant streaming to attract families because of its ability to give everyone what they want without having to rent multiple DVDs. With instant streaming you can watch things at the same time from different screens. A good judge of the potential market for individuals is to look at the number of cell phone users. There are anywhere between 200 to 300 bil- lion cell phone users. 29
- 30. TARGET MARKET STRATEGY CBSA BPI RANK From these charts, we can see that although there New York et al, NY-NJ-PA Metro 6.5594 1 Los Angeles-Long Beach-Santa 4.4271 2 was an economic crisis, buying power is going Ana, CA Metro Chicago-Naperville-Joliet, IL-IN-WI 3.1731 3 up. With low cost subscriptions, Netflix will be Metro Washington-Arlington-Alexandria, DC-VA-MD-WV Metro 2.315 4 able to fit into everyone's budget. Dallas-Fort Worth-Arlington, TX 2.1047 5 Metro Philadelphia-Camden-Wilmington, 2.0191 6 PA-NJ-DE-MD Metro Miami-Fort Lauderdale-Pompano 2.0039 7 Beach, FL Metro Houston-Sugar Land-Baytown, TX 1.9573 8 Metro Atlanta-Sandy Springs-Marietta, 5-yr Projection U.S. Totals of Effective Buying Income 1.8934 9 GA Metro % Growth Of Average Household San Francisco-Oakland-Fremont, 1.7262 10 Region Average Household EBI CA Metro EBI from 2008 to 2013 Phoenix-Mesa-Scottsdale, AZ Met- 1.6627 11 ro West South Central 57,369 7.77 Boston-Cambridge-Quincy, MA-NH East North Central 55,804 5.95 1.632 12 Metro Riverside-San Bernardino-Ontario, West North Central 55,884 8.07 1.415 13 CA Metro South Atlantic 61,256 8.41 Seattle-Tacoma-Bellevue, WA 1.3298 14 Mountain 61,394 8.37 Metro Detroit-Warren-Livonia, MI Metro 1.2896 15 Pacific 71,125 8.86 Middle Atlantic 66,632 8.3 East South Central 49,975 7.95 New England 70,278 8.31 http://www.surveyofbuyingpower.com/sbponline/regional/five-yr-proj-totals-of-ebi.jsp TOTAL UNITED STATES 61,535 7.82 30
- 31. TARGET MARKET STRATEGY Average education level of a Netflix user Average income level of a Netflix user Average age of a Netflix user Gender of a Netflix user 31
- 32. MARKETING MIX It is time for Netflix to stop focusing on the joy that customers feel when they see their red envelope in the mail. It is time for Netflix to start focusing on the joy that you will feel when you simply turn on your TV. Instant streaming is what the target audience is asking for. As you can see from the chart that nearly 25 percent of the people they surveyed use this feature of streaming on their TVs and PCs, and nearly 31 percent use solely on their PCs. Competitors are trying to catch up with Netflix‘s monopoly on the instant streaming feature, but as we say from Blockbuster‘s failure, most are to late in coming into the game. However, Netflix can not get complacent. Now is the time for Netflix to pounce on those who have yet to be converted to Netflix but showing them how they can apply Netflix instant streaming into their life as well as making sure everyone knows your first month is absolutely free. 32
- 33. MEDIA STRATEGIES The main goal for Netflix is to break through the clutter and promote purchase. The U.S. population already knows about Netflix, now we just have to get that population to make a purchase. Currently Netflix is using the power of Testimonials in commercials to advertise their product. While this may work for some of the target audience, we want to promote the streaming quality Netflix offers. TVB Media Comparisons Study The main vehicles that will be used are the internet, Television commercials and Billboards. Based on the America‘s commercial broadcast television industry‘s (referred to as TVB) media comparisons study, Television reached more people than the internet (89.5% > 67.5%). However, considering that the location of the product is on the internet, we want to focus a good part of the advertising to internet ads. Television will have more money budgeted to it, simply due to the production costs. 33
- 34. MEDIA STRATEGIES INTERNET 90.1 percent of the U.S. actively use the internet. That is a huge coverage rate. The biggest advantage to internet advertis- ing for Netflix is one click on an ad and the potential consumer is taken right to the product. Internet users have come to accept and even expect banner ads. We will not be using any form of pop up advertisements because those are generally viewed as spam and annoying. Internet advertising also allows for Fre- quency of exposure. SIZE PRICE 468x60 $350 PRICING CHART 120x60 $200 125x125 $150 34
- 35. MEDIA STRATEGIES http://www.scribd.com/doc/40218865/Building-Brands-Adage-whitepaper 35
- 36. MEDIA STRATEGIES TV commercials Commercials allow so much room for creativity and coverage. This will be our second form of advertising to supplement the internet advertisements. We want to strictly advertise on broadcast TV. The following chart shows that the Target audiences of 18 – 49 years of age watch broadcast TV for more than any cable network (96% > 4%). PRICING CHART Location Duration Amount per month 30 Seconds All Markets (8) 8 weeks/ 112 Spots $3,495 8 TELEVISION MARKETS 30 Seconds Local Market (1) 8 weeks/ 112 Spots $995 1. New York City 5. Washington, DC 2. New Jersey 6. Boston 30 Seconds All Markets (8) 16 weeks/ 224 Spots $4,995 3. Pennsylvania, Philly 7. Louisville, KY 30 Seconds Local Markets (1) 16 weeks/ 224 Spots $1,495 4. Chicago, IL 8. Savannah, GA 36
- 37. CREATIVE EXECUTION The key theme will be to focus on being able to watch anything you want, when you want. We want to create a tone that is very uniform and consistent with what Netflix has already established, we just want to help promote the instant stream feature. We will be using three different banner sizes: 300 x 600 IMU– Half Page ad 728 x 90 IMU Leaderboard ad INSTANT STREAM 300 x 250 IMU Rectangle ad 1st Month Free All will focus on Netflix instant streaming WATCH WHAT YOU WANT WATCH WHEN YOU WANT 1ST MONTH FREE INSTANT STREAM 37
- 38. CREATIVE EXECUTION Camera: Scan from Wii to TV to Camera: Scan from Apple TV to TV to Viewer Viewer Audio: music Audio: Musci Camera: Scan from PlayStation 3 to TV to Viewer Camera: Scan from iPhone to TV to Viewer Audio: Music Audio: Music Camera: Scan from Roku box to TV to Still think you don‘t Camera: Flash Format Viewer have what it takes to Audio: music stream movies Audio: Music instantly? Camera: Scan from Xbox to TV to Camera: Flash Format Viewer Watch What you want Audio: Music Watch when you Want Audio: Music Title: Instant stream Camera: Flash Format Length: 30 seconds Instant Stream Audio: Music Format: Scan from devise to TV to Viewer, Flash to next frame. 1st month free 38
- 39. CREATIVE EXECUTION Say Goodbye to all those expensive contracts Watch What you want When you Want Title: Goodbye Contracts Length: 30 seconds Format: Continuous camera, Flash format Instant Stream on last three frames 1st month free 39
- 40. CREATIVE EXECUTION Index to Index to Index to Index to Index to NTI Broadcast Months HH Yearly Avg. A18-34 Yearly Avg. A18-49 Yearly Avg. A25-54 Yearly Avg. A55+ Yearly Avg. 12-MONTH AVG. 2009 58.8 30.5 34.3 38.0 51.9 Jan-10 61.5 106 32.3 109 36.7 110 40.8 110 54.8 107 Feb-10***** 62.1 107 32.6 110 37.2 111 41.3 111 55.6 109 Mar-10 59.2 102 30.1 101 34.3 102 38.1 102 52.3 102 Apr-10 58.1 100 28.9 97 33.0 99 36.8 99 51.2 100 May-10 57.2 98 28.6 96 32.4 97 36.3 97 50.0 98 Jun-10 55.3 95 27.3 92 30.9 92 34.6 93 47.9 94 Jul-10 53.7 92 26.1 88 29.5 88 33.1 89 46.9 92 Aug-10 55.2 95 27.7 93 30.8 92 34.3 92 48.0 94 Sep-10 57.7 99 29.9 101 33.1 99 36.6 98 50.2 98 Oct-10 59.4 102 30.9 104 34.5 103 38.1 102 52.2 102 Nov-10 59.7 103 31.5 106 35.1 105 38.9 104 52.8 103 Dec-10 58.6 101 30.3 102 34.2 102 38.0 102 51.8 101 12-MONTH AVG. 2010 58.1 29.7 33.5 37.2 51.1 Source: The Nielsen Company Based off the 2009-2010 12 month HUT average put out by the Nielsen Company, we can see that network Television is watched much more than cable. There is only 7.8% difference between the winter months and summer months. Based on these findings we will have a continuous schedule. 40
- 41. MEDIA STRATEGIES ADDITIONAL PROMOTIONAL VEHICLES Sponsor the Sundance Film Festival The Sundance film festival is the biggest independent film showing in the country. Netflix has tried to gain access to all forms of film to attract every film watcher out there. By spon- soring the Sundance film festival, Netflix will be able to show QR Codes that they house more than just your ―blockbuster films‖ and are QR codes are becoming popular as smart phones become more stand- open to receiving new films to their collection at every oppor- ard. Netflix can partner with a candy company such as Mars (M&Ms) tunity. Netflix can then gain rights to these films and show them or Nabisco (Sour Pack kids) to put Netflix QR codes on their movie on instant streaming to attract a new market of customer and size candy. The QR codes can lead consumers to Netflix.com and help the film maker gain publicity and further their career pro- YouTube clips of commercials. Netflix can also run a follow up cam- spects. Next festival: January 19-29, 2012 paign of asking Netflix users to create and submit their own video of http://www.sundance.org/festival/ them using or advertising the Netflix product. If their video passes YouTube regulations, those videos can be put on YouTube with a QR code attached. This creates consumer excitement and involvement. 41
- 42. IMPLEMENTATION Strategy 1: Increase brand awareness within the target market so that they become familiar and comfortable with the services and features offered by Netflix. Execution: Beginning January 2012, our campaign will begin by maximizing the frequency of exposure that internet advertising offers. Increased banner ad placement will begin immediately. They will be placed on pop-culture media sites which include: movie critic blogs, social networking sites, technology sites, and other sites oriented towards heavy internet users. These sites will be selected when ads are purchased through their parent holding companies. Since this is an increase to a form of advertising al- ready in use by Netflix, prices will vary depending on the contracts already signed by Netflix. Current internet ads promoting the free trial offer will be altered to extend the offer to run through the campaigns first year. It will no longer be considered a limited time trial offer but treated as an incentive to get people to try the service. By having a con- sistent message which states that the first month is free more people will feel persuaded to tryout the different services that Netflix offers. Objectives Reached: 2, 4, 5, 7 Time Roll-Out: Jan 1st to Dec 30th 2011 Predicted Outcome: Success 42
- 43. IMPLEMENTATION Strategy 2: Intensify brand awareness and increase user acceptance by positioning Netflix as an affordable and multi-featured service that fo- cuses on customer satisfaction. Execution: By utilizing social networking we will increase our target audiences desire to access all services provided by Netflix; mainly in- stant streaming. Current Android devices are prohibited from using the instant streaming service by film and television production companies. By increasing the demand for this service via social networks, we will be able to put pressure on those production companies and hopefully ac- quire an Android app like those found on the IPhones and IPad. We will also have QR codes printed on candy wrappers so that consumers can interact with advertisement and receive links and win special offers. Objectives Reached: 1, 3 Time Roll-Out: Jan 1st to Dec 30th 2011 Predicted Outcome: Success 43
- 44. IMPLEMENTATION Strategies 3: Send a call to action to mobile users persuading them to try out Netflix‘s convenient and cost effective features. Execution: By using mobile ads we will be able to directly communicate our message to our target audience. The mobile devices that are currently able to use Netflix are IPhones and IPads. Cell phones alone are used by 85 percent of adults. Tablets are used by 4 percent of adults. By using ad tools provided by Google Ads and Apple ad services we will be able to send these messages directly to our audience. Objectives Reached: 5, 7, 4 Time Roll-Out: Jan 1st to Dec 30th 2011 Predicted Outcome: Success 44
- 45. IMPLEMENTATION 2011-2012 PROMOTIONAL TIMELINE JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APRIL MAY COMMERCIAL 1 SUNDANCE FILM FESTIVAL INTERNET BANNERS COMMERCIAL 2 QR CODE part 1 QR CODE part 2 45
- 46. EVALUATION First we are advertising with several different mediums and we will have a form to evaluate each of these. For all of our adver- tisements we will conduct pre-test and post-test to see the before and after effect. We would conduct these tests on small groups around different parts of the nation to try and get a collaboration of how the consumers are feeling about the advertisements. The Internet will be the first medium we use and we will be able to use a click counter on the page to see where people are most often visiting. Then we will also have a general site counter that will let us know the amount of traffic the site is receiving each day and the total number of visitors we are seeing. By having these counters in place on these website we can learn much more about our consumers and what they like and dislike. This will help us determine where the consumers are and what they are look- ing for. To evaluate the Internet advertising we would have a small test group and have them click through Internet pages that have Netflix advertising and see how many clicks were received. Once they have completed this test we would ask the to fill out a form that has questions about what made them click on the advertisement and what didn‘t. What they liked about the advertisements and what they didn‘t like about it and also what could have made it better. 46
- 47. EVALUATION Then we will also have advertisements on TV. We will be able to Finally we will place QR codes on movie size candy. These codes track the amount of people that see these commercials with the will be tracked and we will be able to see how many people actual- help of the stations we will be broadcasting on and with the help of ly used the code from the candy, threw it away, or just ate it and Nielsen. The commercials will have a certain code and the custom- didn‘t even look at the code. We will also hold small focus groups er will be asked to enter this code at a later date. This will also be a to evaluate this type of advertising as well. The groups will talk way of tracking the customer flow that Netflix received from its about the candy QR codes and see what they think about this type commercials. We will also hold small focus groups and show these of advertising. Then fill out a form with questions like would they commercials to receive feed back from our customers. use it? What they thought about it? Is it a waste of money? We will have a similar form as to the Internet evaluation we would just change the questions to fit the television realm. By evaluating all of these we will be able to determine whether our campaign is working or not. We will track the number of people that are joining Netflix with the codes they received through our advertising. If the numbers go up we know we are doing our job and if they go down we know we are missing our target audience and we need to re-evaluate the advertising. 47
- 48. CLOSING SUMMARY Netflix is the best product for digital distribution. They have successfully stocked their company with the widest range of films. Through their start up success they have been able to create a name that is recog- nized through out the country. By starting their instant streaming feature as soon as broadband internet was able to support it, they not only stayed ahead of the competitive game, they‘ve monopolized the field. Now that the instant streaming feature has become so popular, many are trying to imitate and enter into the market. By implementing the creative strategies suggested, Netflix will secure their place on top. Through increasing the reach of their instant streaming message, eventually every home will have a Net- flix subscription. Netflix is here to stay. 48