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By: Samar Farah
Originally Published: Deliver Magazine - July 2007
The movie rental giant has won over millions of members with a marketing philosophy driven by one simple goal: ubiquity Lately, Netflix marketers have been trying to redecorate the country in red and white, the brand’s highly recognizable signature colors. Netflix banner ads litter the cybersphere like New Year’s confetti, and the company’s postcards and freestanding inserts pop out of newspapers and coupon packs.
And if you haven’t found a Netflix flier masquerading as a movie ticket tucked into the envelope with your theater tickets, or caught the brand’s TV ads featuring eclectic Hollywood characters, then there’s a good chance the Netflix Rolling Roadshow stopped in your town last summer. Residents and vacationers in Martha’s Vineyard, for example, were treated to showings of a classic horror movie. You might say the little upstart that could is all grown up. In February, Netflix celebrated a milestone: 1 billion DVDs and counting shipped since the online movie rental service launched eight years ago. That’s less time, says Steve Swasey, Netflix director of corporate communications, than it took a certain fast-food giant to sell 1 billion hamburgers. At a time when many brands are reining in their mass media, the Netflix brand has a strong presence in nearly all marketing channels, from network television and radio to free-standing inserts, direct mail, promotions, events and Internet advertising. While most marketing departments are doing all they can to narrow and target their efforts to reach prospective buyers, could it really be true that Netflix is opting for ubiquity? “I think that word — ‘ubiquitous’ — describes us well,” Swasey says. Swasey says while the company does segment prospective members into groups such as soccer moms or late-night TV viewers, the brand’s target is essentially broad. In short, Netflix wants to attract anyone who watches TV and owns a computer. More and more, Swasey points out, that group cuts across many demographics in the United States.
He won’t divulge how the marketing budget is distributed across channels, but does say the brand’s strategy is to maintain a rigorous presence in all channels, while tweaking budget allocations according to the success of individual campaigns. The most effective channel, according to Swasey, has been word of mouth. “We poll members all the time,” he explains, “and more than 90 percent say they talk about us with friends.” Moreover, based on the company’s polling, more than 85 percent of new Netflix members say they joined because of a friend’s recommendation. The company occasionally nudges its members with an e-mail gently asking them to spread the Netflix word — what the company calls its “tell-a-friend” campaign. One of the company’s most effective marketing avenues has been direct mail. According to Swasey, Netflix has employed direct-mail marketing since early 2000 — relying primarily on two pieces of mail: a bright red 5x7 or 6x9 postcard shaped like a movie ticket, and an envelope with a three-to four-page letter from the marketing department, explaining the service and showcasing Netflix’s inventory of DVDs. Swasey describes the items as “standout, attention-grabbing, and response-initiating.” More important, Swasey says, is that the actual envelopes that the DVDs arrive in grab the recipients’ attention, and reinforce the brand, in a way that credit card offers and fliers can only dream of doing. Netflix members eagerly check their mailboxes, anticipating the telltale red envelope with the personally selected DVD. It’s a model for direct mail marketing that, Swasey says, is very effective and engaging. So why bother with other marketing channels? That’s an easy one for Swasey: Netflix has 6.8 million members, but there are 300 million Americans. It’s hard to believe, but “there are still people who don’t know what Netflix is,” he says, adding that the company expects to add millions more members in the years to come. 
Still, some marketers might be concerned today about hitting consumers from too many angles. For Netflix, it seems the risk might be in potentially undercutting its original image as a startup and a hip renegade in the movie rental industry. But Swasey is not too worried. “We’re not a startup anymore,” he says. “We’re not General Motors or General Electric, but we’re growing.”
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