How the Streaming Wars Benefit Brands

How the Streaming Wars Benefit Brands

Advertising

How will the streaming wars affect the way businesses market themselves in 2020?

This question looms large. A growing number of streaming services, including Apple TV+ and Disney+, now compete with already established players Amazon Prime, Hulu, and Netflix. More services, including one coming from AT&T, are on the way. All of them cater to a younger audience that is notoriously indifferent to ads, which helps explain why most – but not all — streaming services remain ad-free. But that doesn’t mean it’s impossible for businesses to market themselves through streaming services.

Ad-Supported Tiers

So far, Hulu remains the only major streaming company that offers an ad-supported tier, which costs $5.99 a month. (To watch content ad-free on Hulu, viewers need to shell out $11.99 per month.) Hulu tightly controls ad formats to prevent them from being too intrusive, keeping commercial breaks short. In addition, Hulu is said to be experimenting with different types of ads, such as banner ads that appear when viewers pause their content – making Hulu resemble YouTube as a content-watching option. An ad-supported tier apparently works for Hulu. A recent New York Times article reported that the $5.99 tier is Hulu’s most lucrative one:

Even though it charges $6, the service generates more than $15 in revenue per subscriber each month, because of the high-cost advertising sold against those customers, according to two people familiar with the business.

Advertising grew by 45-percent for Hulu in 2018.

In addition, pressure is mounting for Netflix to provide an ad-supported tier, which Netflix does not offer at the moment. But Netflix might cave in because of rising content creation costs and increased competition. A recent stock downgrade by a prominent financial analyst ratcheted up the pressure.

I believe that Netflix will eventually provide advertising (more about that here). For now, here’s a good rule of thumb: if you’re the type of brand that understands how to capitalize on YouTube ad formats (such as YouTube Masthead), consider the ad tools that Hulu is developing. For instance, Hulu offers “binge watch ads,” which, as the name implies, target people who like to watch multiple programs in one sitting. As reported in TechCrunch,

These “binge watch ads” utilize machine learning techniques to predict when a viewer has begun to binge watch a show, then serves up contextually relevant ads that acknowledge a binge is underway. This culminates when the viewer reaches the third episode, at which point they’re informed the next episode is ad-free or presents a personalized offer from the brand partner.

Expect Hulu to provide more creative ways for brands to attract eyeballs.

Watch Hulu closely. The company’s development of an ad tier may point a way forward for Netflix and other competitors.

Co-Branding

Businesses can brand themselves in other ways beyond traditional advertising, such as having their products placed on shows. Here again, Hulu provides an example of how to do it. According to The New York Times, Hulu has a team dedicated to working with businesses to have their products appear on Hulu programming, with the number of paid arrangements increasing 200 percent from 2018 to 2019.

But Netflix is also cozying up to brands (although it is not monetizing those arrangements as aggressively as Hulu has done). For the Netflix hit show Stranger Things, Netflix has struck 75 co-branding deals, which typically provide Netflix exposure and licensing fees (although they are not product placements, per se). Recently, Netflix and sandwich chain Subway made it possible for Subway to offer a Green Eggs and Ham Sub, an homage to a new Netflix series “Green Eggs and Ham,” which is based on the Dr. Seuss book. The sandwich, in effect, acted as an advertising play for both Netflix and Subway. The awareness included strong digital branding, examples being promotions on Subway’s Instagram and Twitter.

Many other examples abound. For instance, clothing company Diesel paid a licensing fee to Netflix in order to manufacture outfits inspired by the popular Netflix show, La Casa de Papel. Diesel capitalized on the power of digital to run online ads that connected the brand to the show:

 

The Netflix-Diesel relationship is a win-win, generating licensing revenue for Netflix and culturally relevant branding for Diesel.

Amazon Prime Video, meanwhile, is no stranger to co-brands. The service, like Hulu, courts product placement opportunities. For example, snack brand Too Yumm! Recently struck a deal with Amazon Prime Video to have its products integrated into a sports drama thriller Inside Edge 2. Amazon recently struck a deal to have Cheerios placed in episodes of The Marvelous Mrs. Maisel, as well.

As these examples show, the growth of streaming services does not mean the demise of advertising and branding – far from it. In fact, as the Diesel and Subway examples demonstrate, streaming services create online advertising and organic branding through platforms ranging from Instagram to YouTube. In addition, a new survey from the Trade Desk and YouGov indicates that consumers of streaming services are open to advertising in exchange for lower prices.

In 2020, expect streaming services to generate more advertising and marketing opportunities as businesses look for creative ways to court audiences online.

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Why Advertisers Embrace Nostalgia Marketing

Why Advertisers Embrace Nostalgia Marketing

Advertising

In Rob Sheffield’s autobiographical memoir, Love Is a Mix Tape, Sheffield observes, “I get sentimental over the music of the ‘90s. Deplorable, really. But I love it all. As far as I’m concerned the ‘90s was the best era for music ever, even the stuff that I loathed at the time, even the stuff that gave me stomach cramps.” Sheffield is talking about nostalgia. Smart marketers know how to tap that vein. Research shows us that nostalgia gives our lives, whether we are 20 or 80, a sensation of comfort, continuity, and meaning. What businesses wouldn’t want to evoke those feelings in a customer? Hence the rise of nostalgia marketing, which uses past themes or products to evoke a specific, positive emotion in customers. Nostalgia marketing isn’t new, exactly — when you see the word “throwback” in relation to a brand, that’s nostalgia marketing at work — but in recent weeks, shows such as Netflix’s Stranger Things have underlined just how powerful nostalgia marketing can be.

Why Nostalgia Works

The irony of nostalgia marketing is, of course, that the past helps make a business more relevant to current interests. Look a little deeper, though, and it’s not hard to see the allure. Research shows that nostalgia can act as an antidote to boredom, loneliness, and anxiety. It can literally make people feel warmer on cold days. And from the perspective of the advertiser, it’s a gold mine in that it can reach multiple generations equally effectively. Nostalgia marketing appeals to the college student stressed by exams who finds refuge in references to beloved cartoons from their childhood. It also attracts the overworked middle-aged manager, who gets a boost from that can of New Coke. And therein lies the power of nostalgia marketing: it’s not limited to a certain age bracket.

In The Upside Down . . . and Beyond

Stranger Things, the Netflix series that is equal parts sci fi exploration of the parallel universe of The Upside Down and‘80s homage, provides a great example of nostalgia marketing. Look no further than the copious New Coke references in the show’s Season 3, which takes place in 1985, the same year New Coke made its short-lived (79-day!) debut. Sure, New Coke may have been a debacle at the time, but fast-forward to 2019, when the beverage giant has the opportunity to turn an embarrassment into a win. By making New Coke (briefly) available again — Coke spent six months poring over records to make sure the New Coke design and recipe were properly recreated — and generating advertising tie-ins to the show, Coke is hoping it can play on nostalgia to court older consumers who remember the advent of New Coke in the first place (whether they liked it or not). But it’s not just an older generation that’s being targeted: younger Netflix viewers from the millennial and Gen Z generations love the show, and because they don’t have any strong negative associations with New Coke, they represent a rich new demographic.

Pepsi has also been known to rewind the clock. In 2013, PepsiCo took advantage of the social phenomenon #ThrowbackThursday to generate some buzz about product, posting images of its “throwback” Pepsi sodas, which were made with “real sugar” as opposed to the high-fructose corn syrup soda manufacturers switched to back in the 1980s in response to tariffs.

Other brands, such as Wendy’s, have used classic photos for Throwback Thursday posts; Wendy’s underlined the nostalgia by pointing out how the fast-food chain debuted the first modern-day pick-up window.

Wimbledon, the oldest tennis tournament in the world, and arguably the most prestigious, has also embraced nostalgia in a bid to generate more revenue. As reported in Digiday, the tournament, as part of a six-week campaign, “created an immersive, theatrical recreation of the 1980 final between Bjorn Borg and John McEnroe. Billed as a virtual time capsule of sorts, the recreation of the match was backed by archive footage from the real one on the tournament’s social media channels.”

Doing Nostalgia Marketing the Right Way

Like any marketing strategy, nostalgia marketing comes with a few ground rules. To achieve the best results, you want to do it right, namely:

  • Know your audience. Are they going to understand or appreciate the throwback?
  • Leverage all the tools you can, ranging from social to online advertising.
  • Know the nostalgia “hot spots.” Create content that targets your audience’s elementary and high school years, generally ages six to 16. And don’t forget “parental nostalgia,” the nostalgia many parents feel for their children’s childhoods.
  • Try to draw on content creators who actually lived in the time or place your brand is recalling. Someone who participated in the experience in the first place is much more likely to invest the marketing with emotion and meaning.
  • Take advantage of brand history if your company has been around awhile. Nostalgia strategies can be built around reminding customers of the positive experiences they’ve had with a product over the years.
  • Pay attention to the details and get the callback right.

Bottom line: authenticity is key.

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