How Netflix’s experimental approach to marketing tie-ins creates opportunities for smaller brand partners (NFLX)

Netflix

Samantha Lee/Business Insider

Netflix’s experiments with marketing tie-ins to shows like "Stranger Things" could create more opportunities for small and midsized brands in the entertainment space.
Marketers Business Insider spoke with said that Netflix is not looking for big media spends from its partners, like major movie studios do.
It’s more about finding the right brands that fit with the shows creatively than a mad grab for media dollars.
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Netflix’s experiments with marketing tie-ins to shows like "Stranger Things" could create more opportunities for small and midsized brands in the entertainment space.

The streaming giant, which has a Silicon Valley ethos of A/B testing, has been experimenting for the past two years with tying brands like Coca-Cola, Nike, and Burger King into promotional campaigns for its biggest shows, similar to the way movie studios team up with carmakers, soda brands, and other big advertisers to market their blockbuster films.

But Netflix, as a newcomer to the brand-partnership space, is much more fluid and innovative in how it works with brands than the major movie studios and TV networks, Business Insider learned from interviews with eight brand and agency execs who have worked with Netflix.

Where movie studios typically have quotas for the amount of media spend they bring in from outside partners around major theatrical releases, Netflix normally doesn’t ask its partners to commit to a certain media spend, marketers who have worked with Netflix said.

It’s more about finding the right brands that fit with the shows creatively than a mad grab for media dollars.

"It’s a different philosophical approach," one marketing exec who has worked with Netflix said.

It creates more opportunities for smaller or midsize brands that don’t have big marketing budgets to work with Netflix. Netflix worked with Lyft on in-app experiences and other elements to promote the second seasons of "Stranger Things" and "Glow." The production company behind the Netflix show "Queer Eye" also licensed the property to a small ice creamery in San Francisco.

Two agencies that specialize in product placement and brand integrations said they’re seeing more interest from brands around Netflix productions, partly for this reason.

"The huge tentpole promotions you see with films, they only partner with a couple of brands and it’s really expensive," Caressa Douglas, senior vice president of global strategic partnerships at Branded Entertainment Network, who works directly with TV and film productions — rather than studio or network execs — on product placement. "I personally am seeing an increase in interest."

One of Netflix’s licensing partners on "Stranger Things" said it didn’t have to guarantee the company minimum royalty payments, either, which it usually does when it licenses entertainment properties for consumer products. It simply sold as much as it could and gave Netflix a cut of the revenue, as is standard in licensing deals.

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