Netflix forces advertisers to change the channel

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Changing media consumption and the migration of eyeballs from broadcast to online TV has been one of the biggest challenges for brands over the last five years.

Starting with repurposed TV creative running on YouTube as a sort of bolt-on solution, advertisers, strategists and creatives have done increasingly well to develop online TV advertising and creative that is targeted, content contextual and usefully interactive.

Prerolls are now as a rule, witty, thought through and digitally native.

Naturally, now that advertising has adapted to the new rules of the game, the game has to change.

Subscription video on demand (SVOD) has arrived in Australia with force. Local services such as Presto, Stan and Quickflix started it all off and now US giant Netflix has come in racking up over two million subscribers in only three months.

Beyond putting the squeeze on broadcast and traditional subscription television, free online TV sites have also started to see audiences move to spend more time on SVOD.

We’re not saying that from tomorrow two million people won’t be tuning in to the evening news on the telly or watching a funny cat video on YouTube. They’re just going to be spending less time doing it while they binge watch House of Cards.

For advertisers, none of this is particularly relevant provided your advertising spend follows the audience. For the moment however that isn’t an option, as Netflix don’t run advertising.

So what are the implications of this shift in visual consumption?

From the media side of things demand remains consistent but the number of impressions in the market has shrunk, so in near future prices will be going up.

For creative, while the size of the audience hasn’t changed there are fewer impressions on the market, meaning you don’t get the same bang for your buck when it comes to frequency.

You’ll need to start planning creative around your audience only viewing it once or twice, so think about adding active and interactive elements in order to increase engagement.

And finally, what this means for advertisers. If a 30 second TVC run on old fashion pay TV is the cornerstone of your marketing strategy it’s time to pivot.

Unless you are one of the select few with the budget for product placement in programming, Netflix will for the moment remain a closed shop.

Facebook video could be your get out jail free card to reach the same audience, but a traditional TVC isn’t going to cut it in a social media setting.

In the coming months you’re going to have to be fighting harder to gain the attention of audiences regardless of where they are because they will be spending more time in places you can’t reach them.

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