Commentary

Netflix Will Spend $1B In Acquisition Marketing, With A Good Bit On Programmatic

In Netflix's first-quarter earnings, reported at the market close on Monday, revenue was strong while subscriber numbers were a bit lower than those a year ago.

The streaming video provider said it launched in 130 countries a year ago, which helped it add 3.53 million international customers in Q1 2017. However, Netflix reported 4.51 million new international subscribers a year ago.

Subscriber growth in the U.S. also showed signs of sluggishness, with Netflix adding 1.42 million new customers this year vs. 2.23 million a year ago. Still, Netflix reported that it will exceed 100 million subscribers by the end of Q2, which is right around the corner.

Beyond subscriber numbers, Netflix told Wall Street it will spend $1 billion on marketing and earmark a good portion of that for programmatic advertising.

The company didn't say exactly what percentage of these funds will be allocated to programmatic. Nevertheless, this is an interesting development for Netflix and one that bears watching.

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The company is obviously going after scale in putting its heft behind programmatic. It said nothing about potential concerns over brand safety, ad fraud, non-human traffic, and all the rest of the problems that beset ad tech and the murky digital advertising supply chain.

The $1 billion that Netflix is putting behind customer acquisition is staggering. The company said its move into programmatic advertising aims to improve “individualized marketing at scale” and targeting.

Let’s see how that pans out.

1 comment about "Netflix Will Spend $1B In Acquisition Marketing, With A Good Bit On Programmatic".
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  1. Ed Papazian from Media Dynamics Inc, April 19, 2017 at 8:52 a.m.

    Amazing that Netflix referrs to something called "programmatic advertising" when, in reality, automated buying of digital "audiences" is what it is doing.The advertising part---like how Netflix is positioned and what the ads have to say, has nothing to do with programmatic buying per see. One merely targets a particular ad approach for an assumed mindset and the computers attempt to place your ads where such consumers might have a chance to see them---assuming a 100% ad visibility factor, of course, and no bots or offensive website content.

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