Netflix is reportedly investing in its out-of-home advertising strategy with the planned acquisition of a Los Angeles billboard company.
As reported by Reuters, a source close to the matter says that Netflix is offering more than $300 million to buy Regency Outdoor Advertising. Regency owns a number of billboards across Los Angeles, including the Sunset Strip.
Netflix has previously rented billboard space from Regency to promote Stranger Things and The Crown. Owning these billboards would allow Netflix to save money over time and provide unlimited access to a valuable out-of-home market. The move would also place competitors like Hulu and Amazon at a disadvantage, no longer able to rent these billboards for Los Angeles commuter attention.
The OTT streaming entertainment giant has displayed a particular interest in billboard advertising recently. In addition to direct promotion, Netflix used the platform to tease its new comedy line-up with plain white billboard ads in Los Angeles and New York that said, “Netflix is the Joke.” The guerrilla marketing campaign had consumers guessing whether it was an ad or an attack.
Netflix earned over $11 billion last year in streaming revenue but faces increasing competition from the likes of Amazon, Hulu and Facebook. To remain competitive, Netflix announced that it will increase its marketing spend to around $2 billion in 2018.
“We want great content,” said Netflix during its Q4 earnings call, “and we want the budget to make the hits we have really big to drive our membership growth.”
Billboards remain a popular tool for marketers to promote digital OTT services. To tease the return of Twin Peaks, Showtime placed cryptic billboards around strategic locations in the US—depicting either a cherry pie with a piece missing or a single slice. Savvy fans quickly figured out that the crust pattern matches Twin Peaks‘ infamous Red Room floor, and the billboard locations correspond to important events in the first series, as well as creator David Lynch’s hometown.
Spotify turned statistics into light-hearted goals for 2018, each displayed on a colorful billboard. Examples include “Eat vegan brisket with the person who made a playlist called ‘Leftist Elitist Snowflake BBQ” and “Exercise more conventionally than the 46 people who put ‘Slow Hands’ on their running playlists.”