Netflix recently announced that it was adding exclusive shows for teens, a continuation of the website’s efforts to target increasingly specific demographics. But while the move would be a boon for advertisers on broadcast TV, the dearth of advertising on Netflix makes brands unable to take advantage of the opportunity.
As streaming video gradually replaces TV, brands rarely benefit, according to L2’s Intelligence Report: Video. Cable and broadcast ratings growth has plunged by about 13% since 2012, according to Nielsen, while Netflix has become one of the most-watched U.S. broadcast networks. Yet like most top on-demand TV service providers, Netflix offers limited advertising opportunities.
Hulu and network websites with free streaming such as ABC.com and MTV.com are exceptions. But even on these platforms, large companies control most advertising space. The L2 study shows that 85% of the nine Beauty and Hair Care brands advertising on seven TV streaming sites in Q1 2015 belonged to either Procter & Gamble or L’Oréal Group.
Similarly, few Beauty and Hair Care brands advertise on Hulu. In Q4 2014, CoverGirl was the only Beauty brand in the platform’s top 10 most frequent advertisers, and no category brand joined the top 10 in Q1 2015. During those two quarters, Ralph Lauren Fragrance, Conair, Proactiv, and Epiudo were the only other Beauty and Hair Care brands to advertise on the site.
This means that as TV gives way to streaming video, brands will have to come up with new promotional strategies such as producing branded content. However, video platforms like Netflix may be reluctant to concede ad-free viewing, even for increased revenue.