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How Netflix can Evolve its Use of Product Placement

How Netflix can Evolve its Use of Product Placement

6 Minute Read

  • Audiences are transitioning from cable television to streaming services like Netflix and this shift has caused marketers to determine new strategies to reach consumers on these on-demand channels
  • Netflix original series’ have leveraged product placement with top brands, however this practice has yet to go beyond scene integration in their affiliation with Netflix programming
  • Hollywood movies are more developed as it relates to product placement; brands engaging in product placement on streaming services can learn from their best practices

The rise of streaming services like Netflix has changed the way viewers consume content. Over the last decade, more and more people have opted to subscribe to services like Netflix, Shomi, and Crave, which offer on-demand, commercial free entertainment. Netflix currently has 5.2 million Canadian subscribers and according to a report from Convergence Online, in 2015 there was an 80% increase in Canadians that cancelled their cable subscription. As audiences shift from traditional television to streaming services, there is increasing pressure on advertisers to revise their marketing strategies and find meaningful ways to integrate their brand onto these channels. In a commercial-free platform, one of these ways is through product placement. Product placement in movies and television is a form of sponsorship that provides brands with an opportunity to drive an association with the attributes and culture surrounding a film / show and its characters.

House of Cards, one of Netflix's most popular shows, provide an example of tasteful but meaningful brand integration into the program. 

Samsung has used House of Cards to showcase their new tablets and their functionality in a professional environment. 

Mobile video game Agar.io was also featured as a key plot point on the latest season of House of Cards. The mobile game was released last year and was spread due to word-of-mouth, but the appearance in House of Cards exposed the game to a wider audience. 

Challenges and Opportunities of Netflix Product Placement

As a new medium, Netflix presents opportunities to advertisers that can leverage its large audience. However, it is important to consider potential limitations on the platform.

Opportunities- A number of Netflix show have a large and dedicated following that will “binge-watch” new seasons. The audience that use Netflix are primarily younger, in 2015 65% of American internet users aged 16-24 had also used Netflix in the previous month. It can be very beneficial for brands to attach themselves to a young tech-savvy audience. Brands can also benefit from the large amount of data gathered by Netflix on the viewing habits of consumers. This can offer brands a detailed picture on who they are reaching with their brand integration. 

Challenges- Brands often plan to advertise on television around a certain time of day. For example, a restaurant may find it most valuable to advertise around dinner time. However, on Netflix this is not an option. Viewers are free to watch programming at any time of the day. Additionally, a major draw to Netflix is the fact that it offers commercial free programming. If branding and product placement become too overt and feel inauthentic there can be a push back from viewers.

Netflix programming is simply earlier in its life stage when it comes to its relationship with brands. Marketers looking to drive a deeper association with Netflix content and characters can look to how major Hollywood movies approach their use of promotional partners, where the usage of licencing and “beyond the screen” activation is more prevalent. However, it is important to consider that what may work for Hollywood may not work for Netflix. Movies and Netflix are two different mediums with different consumer tendencies. If Netflix continues to grow as a service, brands will continue to have an interest in Netflix who can learn from best practices from Hollywood.

Best Practice in Movie Product Placement

Product placement in Hollywood has evolved from a simple onscreen appearance to more complex and engaging activations on behalf of the brand. Major Hollywood movies have sophisticated strategies with promotional partners and have taken their relationship beyond the screen. The following are examples of best practices in product placement:

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Onsite Activations (Kiehl’s and Zoolander 2) - Earlier this year, the sequel to Ben Stiller’s 2001 comedy about the modelling industry, Zoolander, was released. In partnership with the movie, cosmetic brand Kiehl’s created the “Centre for People Who Don’t Age Good” in New York. The activation had visitors guided throughout the centre by male models to try Kiehl's anti-aging serum, with an opportunity to take pictures at the selfie station. Kiehl’s was able to bring their partnership with the film beyond the screen and provide a tangible experience for fans of the movie.

Creation of Custom Content (Under Armour & The Martian) – Under Armour leveraged the concept of the “sneak-peek” through their partnership with the 2015 Matt Damon film, The Martian. In anticipation of the film’s release, Under Armour released its own television spot which featured Matt Damon’s character, astronaut Mark Watney. In it, Watney trained for his mission in Under Armour apparel - promoted as the “Official Training Partner of the Ares Space Program”. The spot was not a conventional spot for a movie, but instead parodied a real-life ad as if the universe in which the movie was filmed was real. The spot helped communicate the message of the film, while Under Armour was able to be authentically integrated into the narrative of the movie. In addition, Under Armour was successful in recognizing and leveraging the film’s character as a celebrity endorser.

Extending the Window of Engagement (Pepsi & Back to the Future Part II) - In the 1989 sequel Back to the Future Part II, Michael J. Fox’s character travels to the future, the year 2015. During his time in the future, his character visits a diner where he orders a Pepsi Perfect, a fictional drink created for the movie. Last year, Pepsi released Pepsi Perfect to coincide with the date Michael J. Fox travelled to the future. The new product capitalized on a renewed interest in the film and Pepsi was also able to remind fans of their integration on the film. The product created a lot of buzz on social media with fans sharing their product online. Netflix could utilize this strategy by leveraging their large catalogue of older movies and TV shows and create new activations around them.

Although Netflix is early in its life stage as an entertainment production company, it is likely that more brands will look to partner with Netflix as more viewers transition to on-demand, commercial free entertainment. However, brands must be mindful of best practices in product placement in order to truly stand out. Hollywood has participated in the practice of product placement for decades, and advertisers should take note of the creative promotions which extend beyond simple on-screen placement. 

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