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Over two years ago, I correctly predicted that Amazon would transform the advertising world. Watch out…Netflix will produce the next sea change.

As we move to data driven, personalized marketing, it was obvious to me that the data assets of Amazon would instigate a new segment of “retailers as adtech”. Who could have better assets to drive performance marketing?  And, since my prediction, Amazon ad revenues have grown from a little over $2 Billion to being north of $10 Billion, and likely to continue rapid growth.

Netflix will lead the next disruption in the advertising/media landscape, focusing on the other side of the marketing equation…brand building.

Netflix would be an advertiser’s dream…

  1. Brand marketers are thirsting for a powerful, proven way of using digital to drive brand that can balance off the rush to performance marketing. Netflix knows more about hundreds of millions of people’s individualized entertainment interests than anyone else…this creates the opportunity for data driven personalization to address the right BRAND-BUILDING narrative to the right person. And it’s totally cross-device.
  2. Because all their media and ad serving are trackable at a user level with matchable IDs, they can prove lift as well as anyone else in the addressable world.
  3. Their subscriber base in the US is about 50% of TV viewing households so there is a great potential for delivering reach.
  4. They claim viewers in well over 100 countries so they offer a global media choice based on individual profiling…just like Google, Facebook, and Amazon.

Now, what’s in it for Netflix?  At a time that their U.S. subscriber growth is starting to stall (and stock price down 25% from its high), offering advertising has the potential to DOUBLE or TRIPLE their annual profit of about $1.2 Billion (2018).  Why?  Assume Netflix adopts the same ad load as Hulu (i.e. a highly palatable 10 minutes/hour), assume 70% of subscribers opt for the lower ad supported subscription price (what is reported about Hulu). Netflix reports the average viewer watches 2 hours/day on Netflix (although they don’t say how many users that is daily). Let’s also assume a $40-50 CPM per 30 seconds (highly reasonable in today’s addressable video environment).  Working out the math, that offers a great revenue boost.  AND, this should be 50% margin revenue. How can they not make this move at some point in the not too distant future?

What would happen to the advertising landscape? Marketers might begin to think of media this way…



Marketer Purpose Brand narrative with minimal ad waste Performance by winning the first moment of truth Activate curiosity and desire; win Z-MOT Performance and brand building by targeting Influencer marketing about what is cool Reach and context
Best media option Addressable video and audio Retailers as digital adtech Search Display Personal channels Mass media
Sample of leading players (in no particular order) Hulu Amazon Google Facebook Youtube Broadcast and cable networks
Tubi, Crackle Best Buy Bing Google Instagram Print
YouTube Kroger, etc. Yahoo Oath Twitter Outdoor
Premium video from CBS, NBC, etc. Target Amazon Twitter Terrestrial radio
Netflix Walmart Other Programmatic
AT&T, Roku, Samsung Programmatic Geo-fenced advertising Amazon (publisher network off
Oath, Facebook, twitter Nielsen, IRI, Catalina targeting  Large digital magazine portfolios
Pandora, Spotify
Unique benefits Addressable brand-building to those potentially most interested in your brand. Now with significant reach Win at e-tail with targeted advertising as you are competing for every purchase. Expect really high ROAS Drive first contact to your brand on the path to purchase Targeted advertising to the right segments will deliver high ROAS and brand response from prime prospects Influencer marketing is very important, especially in certain categories like music, fashion and beauty Affordable way to build reach for your message
Media competitor needed advantage Profile consumers at scale on what entertains Profile what individual shoppers are interested in buying now Serve search ads based on what people are curious about Create and target more persuadable segments Personal channels with high follower numbers Mass reach, context


When marketers look at advertising channels this way, they will realize that it maps to the stages of the journey/funnel. They will budget for each channel adding substantial ad investment to some newer players.

Media companies will create and reinforce ad products that put them in new channels so they can compete for more ad dollars.

Media research companies will realize that there is a substantial opportunity to develop new measurement services that align to this new channel structure.  Right now, we could not measure reach and frequency for any of these channels, let alone across them.

Netflix says it won’t offer advertising. MediaPost agrees.  Yet, CNBC and Marketwatch say it is inevitable. At some point, Netflix will want to take another subscriber rate hike and they will offer ad supported access at the old rate, creating a two-tier structure.  Consumers will accept it because their original content is so bing-able and it is a now familiar pricing structure.

And if Netflix DOES NOT do this, Amazon Prime will.

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    How Netflix will transform brand marketing when it offers advertising | Joel Rubinson on Marketing Research

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    How Netflix will transform brand marketing when it offers advertising | Joel Rubinson on Marketing Research

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    How Netflix will transform brand marketing when it offers advertising | Joel Rubinson on Marketing Research