For years, the absence of advertising on streaming platforms like Netflix and Disney+ could have strengthened their prestigious image.
“No advertising coming onto Netflix – period,” one of Netflix’s co-chief executives, Reed Hastings, said years ago. “We don’t believe that the consumer experience would be a particularly good one if we had advertising on Disney+,” Disney’s chief financial officer Christine McCarthy commented in late 2020, as later quoted by The New York Times.
However, both streaming companies have recently shown signs of a change of heart – and even supposedly ‘ad-free’ streaming platforms are not entirely beyond advertisers’ reach, as we have already seen with what is known as ‘product placement’.
How has product placement come about in practice?
Typically, product placement happens when brands pay streaming TV shows’ producers in order to feature on the screen.
In 2019, Econsultancy quoted Nicole Sabatini – at that time streaming service Hulu’s head of integrated marketing – as saying: “When a show is greenlit, my team immediately talks to the producers and the studio of that particular show to have a general conversation around having brand stories woven in.”
Consequently, you could have seen brands featured heavily in such high-profile Hulu shows as The Mindy Project and Four Weddings and a Funeral – with the latter portraying a wedding sponsored by the travel brand Hotels.com due to an actual deal the business struck with Hulu.
In exploring the possibility of making similar deals, your own company could come across co-promotional opportunities. This is where the show promotes the advertising brand while the latter, on its own marketing channels, promotes the show.
You might have spotted this happening with the Netflix hit Stranger Things, when Burger King ran a promotional campaign for its special ‘Upside Down Whopper’ released in honor of the show.
Does product placement really ‘work’?
To a certain extent, this depends on what exactly you would mean by ‘work’. The brand appearances can be made in such a way that they do not overly distract from the show’s overall theme and setting.
Furthermore, research findings published by the UK broadcaster Channel 4 in 2013 suggest that viewers actually appreciate how product placement makes a specific time or place depicted in the show appear especially authentic.
Where product placement does falter is in how easily it can be measured. Unfortunately, streaming platforms are often reluctant to let advertisers see viewership data, meaning that the brands could struggle to accurately ascertain what kind of reach their product placement is achieving.
Many ad-free platforms might not be ad-free for much longer
With Netflix having recently reported losing subscribers for the first time in a decade and various other companies – like Apple and Amazon – having added to Netflix’s list of competitors in TV streaming, it looks like an entirely ‘ad-free’ model could be ultimately unsustainable.
Still, however the streaming space does shape up in the near future, your brand should continue looking out for advanced TV advertising opportunities, with TV having been hailed as a powerful medium through which brands can reach their audience.