netflix final

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Kelsi Bledsoe, Michael Hooper, Kyle McNay, Ashley Phenix

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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.

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COMPETITOR ANALYSIS TABLE OF CONTENTS

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

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COMPETITOR ANALYSIS SITUATION 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

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COMPETITOR ANALYSIS SITUATION ANALYSIS

Stage in Product Life Cycle

Due to Netflix‘s vast growth over the

past ten years, the company is now considered

to be in the maturity stage of its life cycle.

They have dominated the movie rental industry

by surpassing their competition in not only

price but services and features. However, new

and former competitors are beginning to copy

those features that set Netflix apart. For any

company at the maturity stage it is important to

defend their market share while maximizing

their profits.

Seasonality

Most industry analysts believe

Netflix to be entering into a plateau-

stage in regards to new subscribers.

Their numbers will likely level out go-

ing into the third quarter of 2011. How-

ever, due to seasonality, there is likely to

be a spike in subscribers going into the

colder months of the year because of the

appeal to satay indoors..

Legal/Regulatory Issues

Frank Chavez sued Netflix

for false advertising. The company

did however claim "unlimited rent-

als" as an option. This process known

as "throttling" can give priority ship-

ping to customers who rent fewer

discs per month. In 2006, Netflix

filed a patent infringement lawsuit

against Blockbuster for using the

technology behind the Netflix queue's

as well as the company's model of

communication and delivery.

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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.

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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.

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COMPETITOR ANALYSIS PRIMARY RESEARCH 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-

flix.‖ Package: We also found that 53 percent have

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.

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COMPETITOR ANALYSIS PRIMARY RESEARCH 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

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COMPETITOR ANALYSIS PRIMARY RESEARCH 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

instant streaming process. In addition, you can never go wrong with increas-

ing the streaming library even more, at least in my opinion.‖

―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.

―Because of Netflix, I‘ve been introduced

to more movies and TV programs that I

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 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.‖

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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.

CLIENT PROFILE

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PRODUCT

With their monthly subscription plan, Netflix ended their

late fees and shipping cost. Their subscription plans range in

price from $7.99 to $55.99 a month. Each plan has a different

amount of DVDs the subscriber can have out at a time; they

range from one to eight DVDs. Every subscriber now has un-

limited DVD rentals and can keep them for as long as they like;

there are no due dates, but subscribers must mail one of the

DVDs they are allotted back before they can receive a new one.

Netflix has recently added blue-ray disc alongside their DVD

options, but this comes with an increase to the monthly sub-

scription price.

Netflix now offers a standalone instant video streaming option

for $7.99 a month. The Netflix streaming service can be

played on a multitude of devices. The devices range from

Window and Mac computers to gaming consoles and mobile

devices. The iPhone and iPod are the first handheld devices to

receive the streaming service. Netflix has expressed interest in

expanding to android devices but this expansion has been de-

layed due to security concerns of androids open platform.

Plan Price

1 DVD (limit 2 per month) 4.99

Watch instantly Unlimited (no DVDs) 7.99

1 DVDs +unlimited instant watching 9.99








PLAN PRICING CHART

CLIENT PROFILE

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Income Statement

Revenue 2,163m

Net Income 161m

EPS from Continuing Op-

erations 2.96

EPS - Net Income - Dilut-

ed 2.96

Revenue per Share 41.17

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

Netflix Key Financials (In USD as of 12/31/2010)

http://www.mergentonline.com.oberon.ius.edu/companydetail.php?compnumber=105639&pagetype=synopsis

Netflix has over 20 million subscribers and

employs more than 2000 people at its headquarters and

shipping centers. As of 2009, Netflix‘s revenue is 1.67

billion dollars. Their operating income was 194 mil-

lion dollars; net income 116 million. Their total assets

are worth 680 million dollars, and their total equity is

199 million dollars.

CLIENT PROFILE

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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

Dollars (000) Magazine Newspaper Nat'l News-

paper

Network Ra-

dio

Nat'l Spot

Radio Outdoor

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.

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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.

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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-

merce company for customer satis-

faction by the American Customer

Satisfaction index.

They were rated as the number one

online retailer in 2007 by Nielsen

Online.

The National Retail Federation named Netflix

the Retail Innovator of the Year in 2007.

Time magazine even named Roku‘s Netflix

Player as one of the top 10 gadgets of 2008.

CLIENT PROFILE

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Strengths

Leading in market shares of online rentals

Low fixed costs

Largest DVD selection in the world

90% of DVD's are received by customers within one day of

ordering

Strong, easy to use website

Weaknesses

Older demographic doesn‘t understanding their concept

Watch Instantly feature only works for a small selection of movies

Speed depends on consumers Internet connection

Presence in only DVD segment

No live/new content as compared to Hulu, Apple TV, Amazon, etc.

Opportunities

Purchase of Blockbuster.

Pricing segmentation

Online distribution and referrals

Expanding to Video Game rental list

Threats

USPS postage price is unpredictable

Other larger retailers launching into similar space (Wal-Mart)

Online digital distribution (iTunes, Napster)

Redbox kiosk‘s are everywhere (get exact number)

Trouble providing enough copies of new, popular movies.

SWOT

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COMPETITOR ANALYSIS

Compared to businesses who rent movies, Netflix is new and

innovative. When the company started in 1997, the idea of rent-

ing movies solely through the mail was nowhere in the market.

Their next venture of streaming movies directly to the where the

consumer was sitting solidified Netflix as a competitor for other

movie rental companies to watch out for.

With Netflix on the rise, other companies had to think fast. We would

like to focus on Redbox as the primary competitor. This company

came into play right as Netflix was starting to make it national. Their

main threat to Redbox is their convenient locations and the ability to

have new releases before Netflix has rights to send them to customers.

Next we want to focus on Blockbuster as the secondary competitor.

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. VS.VS.

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Primary Competitor: REDBOX

HISTORY- Redbox is a privately owned movie distributor that

has been around since 2002. Their main goal is to offer conven-

ient movie rentals by having self-service kiosks everywhere.

Redbox first made their debut at McDonalds. Next Redbox ap-

peared at gas stations. Now Redbox kiosks are appearing at al-

most every gas station, McDonalds and grocery store

NEWEST FEATURES

Free app to view and reserve movies

Downloaded more than two million times

Create and account on redbox.com and earn a free rental

Redbox mobile club- text ‗Redbox‘ to 727272

Can text ‗Redbox‘ to 50101 to find the closest kiosk

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

COMPETITOR ANALYSIS

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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

guarantee that they will always be able to rent a movie. The mer-

chandise selection is customized to fit the needs of the local mar-

ket. On Jan 1st, 2005 the company eliminated late fees at the com-

pany-operated stores. In 2008 Blockbuster introduced their kiosks.

** On March 10th, 2011 Blockbuster filed for chapter 11 Bankruptcy.

FACTS-

* Consumers can rent movies by

Mail

At kiosks

Blockbuster on demand

In-store

* Consumers can subscribe to save money

1 disc- 11.99

2 disc- 16.99

3 disc- 19.99

COMPETITOR ANALYSIS

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Graphs found at http://www.mergentonline.com

Income Statement

Revenue 3,549m

Net Income -623m

EPS from Continuing

Operations -3.13

EPS - Net Income -

Diluted -3.15

Revenue per Share 16.13

Balance Sheet

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

Blockbuster Key Financials (In USD as of 12/31/2010)

COMPETITOR ANALYSIS

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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

COMPETITOR ANALYSIS

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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

COMPETITOR ANALYSIS

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COMPETITOR ANALYSIS

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

Dollars (000) Magazine Newspaper Nat'l Newspa-

per Network Radio

Nat'l Spot

Radio Outdoor

Netflix 15.7 7108.6 138.2

Redbox 27.1 3839.5

Blockbuster 0.4 420.4 437.5 4264.0 536.0

ADVERTISING EXPENDITURES

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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.

TARGET AUDIENCE

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TARGET AUDIENCE

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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.

TARGET AUDIENCE

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Marketing

1. Have a working mobile application on the top 10 An-

droid devices by the end of the campaigns first year.

2. Highlight the competitive price and variety of content

that Netflix offers compared to their competition by

including these details in every message.

Media

3. Increase our share of voice by 30 percent by the end of

the campaigns first year.

4. Increase the frequency rate of all current advertising

messages by 50 percent from 4 to 6, and extend our

reach 10 percent from 80 percent to 90 percent.

Advertising

5. Use mobile ads to increase awareness of Netflix‘s instant streaming ser-

vice on particular mobile devices: Cell phones- which are owned by 85

percent of all adults, Tablets- which are owned by 4 percent of all

adults. Ads will include notifications that the current free trial offer

will run through the campaigns first year.

Promotion

6. Reach 90 percent of the target audience at least twice with messages

detailing Netflix‘s instant streaming as well as its future gaming rental

service.

OBJECTIVES

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TARGET MARKET STRATEGY

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.

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-

chasing and becoming active subscribers. What makes Netflix

unique? It is the 12 different forms of streaming devices that

bring videos straight to your screen.

We are here

Our Goal Graphic from ww.tvb.org

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http://www.surveyofbuyingpower.com/sbponline/regional/five-yr-proj-totals-of-ebi.jsp

5-yr Projection U.S. Totals of Effective Buying Income

From these charts, we can see that although there

was an economic crisis, buying power is going

up. With low cost subscriptions, Netflix will be

able to fit into everyone's budget.

CBSA BPI RANK

New York et al, NY-NJ-PA Metro 6.5594 1

Los Angeles-Long Beach-Santa Ana, CA Metro

4.4271 2

Chicago-Naperville-Joliet, IL-IN-WI Metro

3.1731 3

Washington-Arlington-Alexandria, DC-VA-MD-WV Metro

2.315 4

Dallas-Fort Worth-Arlington, TX Metro

2.1047 5

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro

2.0191 6

Miami-Fort Lauderdale-Pompano Beach, FL Metro

2.0039 7

Houston-Sugar Land-Baytown, TX Metro

1.9573 8

Atlanta-Sandy Springs-Marietta, GA Metro

1.8934 9

San Francisco-Oakland-Fremont, CA Metro

1.7262 10

Phoenix-Mesa-Scottsdale, AZ Met-ro

1.6627 11

Boston-Cambridge-Quincy, MA-NH Metro

1.632 12

Riverside-San Bernardino-Ontario, CA Metro

1.415 13

Seattle-Tacoma-Bellevue, WA Metro

1.3298 14

Detroit-Warren-Livonia, MI Metro 1.2896 15

Region Average Household EBI

% Growth Of Average Household

EBI from 2008 to 2013

West South Central 57,369 7.77

East North Central 55,804 5.95

West North Central 55,884 8.07

South Atlantic 61,256 8.41

Mountain 61,394 8.37

Pacific 71,125 8.86

Middle Atlantic 66,632 8.3

East South Central 49,975 7.95

New England 70,278 8.31

TOTAL UNITED STATES 61,535 7.82

http://www.surveyofbuyingpower.com/sbponline/cbsa/rankings/ranking-report.jsp?r=50&&o=0&b=rankItem&t=Buying+Power+Index&y=2009&g=CBSA+Five+Year+Projection&

http://www.surveyofbuyingpower.com/sbponline/cbsa/rankings/ranking-report.jsp?r=50&&o=1&b=rank&t=Buying+Power+Index&y=2009&g=CBSA+Five+Year+Projection&

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Average education level of a Netflix user

Average age of a Netflix user

Average income level of a Netflix user

Gender of a Netflix user

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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.

MARKETING MIX

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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.

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.

TVB Media Comparisons

Study

MEDIA STRATEGIES

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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.

MEDIA STRATEGIES

SIZE PRICE

468x60 $350

120x60 $200

125x125 $150

PRICING

CHART

35

http://www.scribd.com/doc/40218865/Building-Brands-Adage-whitepaper

MEDIA STRATEGIES

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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%).

MEDIA STRATEGIES

PRICING CHART Location Duration Amount per month

30 Seconds All Markets (8) 8 weeks/ 112 Spots $3,495

30 Seconds Local Market (1) 8 weeks/ 112 Spots $995

30 Seconds All Markets (8) 16 weeks/ 224 Spots $4,995

30 Seconds Local Markets (1) 16 weeks/ 224 Spots $1,495

8 TELEVISION MARKETS

1. New York City

2. New Jersey

3. Pennsylvania, Philly

4. Chicago, IL

5. Washington, DC

6. Boston

7. Louisville, KY

8. Savannah, GA

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CREATIVE EXECUTION

WATCH WHAT YOU WANT WATCH WHEN YOU WANT

INSTANT STREAM 1ST MONTH FREE

INSTANT STREAM

1st Month Free

We will be using three different banner sizes:

300 x 600 IMU– Half Page ad

728 x 90 IMU Leaderboard ad

300 x 250 IMU Rectangle ad

All will focus on Netflix instant streaming

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.

38

Camera: Scan from Wii to TV to

Viewer

Audio: music

Camera: Scan from Roku box to TV to

Viewer

Audio: Music

Camera: Scan from PlayStation 3 to

TV to Viewer

Audio: Music

Camera: Scan from Xbox to TV to

Viewer

Audio: Music

Camera: Scan from Apple TV to TV to

Viewer

Audio: Musci

Camera: Scan from iPhone to TV to

Viewer

Audio: Music

Still think you don‘t

have what it takes to

stream movies

instantly?

Watch What you want

Watch when you Want

1st month free

Camera: Flash Format

Audio: music


Audio: Music


Audio: Music Instant Stream

Title: Instant stream

Length: 30 seconds

Format: Scan from devise to TV to Viewer, Flash to next frame.

CREATIVE EXECUTION

39

Say Goodbye to all

those expensive

contracts

Watch What you want

When you Want

Instant Stream

1st month free

Title: Goodbye Contracts

Length: 30 seconds

Format: Continuous camera, Flash format

on last three frames

CREATIVE EXECUTION

40

NTI Broadcast Months HH Index to

Yearly Avg. A18-34 Index to



Yearly Avg. A55+ Index to

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.

CREATIVE EXECUTION

41

QR Codes

QR codes are becoming popular as smart phones become more stand-

ard. Netflix can partner with a candy company such as Mars (M&Ms)

or Nabisco (Sour Pack kids) to put Netflix QR codes on their movie

size candy. The QR codes can lead consumers to Netflix.com and

YouTube clips of commercials. Netflix can also run a follow up cam-

paign of asking Netflix users to create and submit their own video of

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.

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

that they house more than just your ―blockbuster films‖ and are

open to receiving new films to their collection at every oppor-

tunity. Netflix can then gain rights to these films and show them

on instant streaming to attract a new market of customer and

help the film maker gain publicity and further their career pro-

spects. Next festival: January 19-29, 2012

http://www.sundance.org/festival/

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

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



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



45

IMPLEMENTATION

COMMERCIAL 1

COMMERCIAL 2

SUNDANCE FILM FESTIVAL

QR CODE part 1 QR CODE part 2

INTERNET BANNERS

2011-2012 PROMOTIONAL TIMELINE

JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APRIL MAY

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.

47

EVALUATION

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.

Then we will also have advertisements on TV. We will be able to

track the amount of people that see these commercials with the

help of the stations we will be broadcasting on and with the help of

Nielsen. The commercials will have a certain code and the custom-

er will be asked to enter this code at a later date. This will also be a

way of tracking the customer flow that Netflix received from its

commercials. We will also hold small focus groups and show these

commercials to receive feed back from our customers.

We will have a similar form as to the Internet evaluation we would

just change the questions to fit the television realm.

Finally we will place QR codes on movie size candy. These codes

will be tracked and we will be able to see how many people actual-

ly used the code from the candy, threw it away, or just ate it and

didn‘t even look at the code. We will also hold small focus groups

to evaluate this type of advertising as well. The groups will talk

about the candy QR codes and see what they think about this type

of advertising. Then fill out a form with questions like would they

use it? What they thought about it? Is it a waste of money?

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.