Opinion

Bandersnatch: Programmatic product placement could be just around the corner for Netflix

Given the increased tendency for consumers to block ads and the effectiveness of quality product placement, it may just become a new channel of choice for advertisers and Bandersnatch may have been Netflix testing the water – suggests Justin Peyton of Digitas

Over the festive break, my Facebook feed filled up with people talking about Black Mirror: Bandersnatch. Being on holiday, I didn’t pay much attention to what they were talking about. I was limiting my online time and I was in no hurry to watch anything.

But now, I’m back. I’m reconnected. And I get it.

Netflix changed the entertainment game with its data-driven approach to content recommendations, and to commissioning original programming. With Bandersnatch you have to ask, is the streaming provider extending that approach and changing the game of product placement this time around?

It’s too early to tell, but we can intuit a lot about where they see the future of entertainment, and the monetisation of content. For those of you who have not seen Bandersnatch let me explain: the show is an interactive choose your own adventure story where the viewer decides on certain actions the lead character takes – with each action leading to different possible endings.

The decision the viewer makes range from choosing what brand of cereal he eats and what music he listens all the way to if he jumps off the roof of a building. The format has been tried before, and I don’t want to get into the technicalities of how they have done this to make it better. For that you need to watch yourselves. But suffice it to say, they have.

Now back to the topic at hand: How Netflix is pushing entertainment and what it means for marketing, and for viewers. So first of all, Netflix is in the data mining business more than even the wider entertainment business itself.

The firm has always used data points such as what you watch, how you rate it, where you pause or stop watching, how long it takes to get through an episode, if you watch back-to-back episodes and so on – as key points in putting together personalised content recommendations.  And in determining how they spend their $US$12 billion plus content budget –– of which 85 per cent is said to go towards original programming.

They are actually very good at it, with their recommendations influencing 80 per cent of all content choices streamed. So as data miners, what does Bandersnatch (and the potential for interactive viewing) give them? Well, the answer is new types of data that can be activated and monetised through product placement and ‘in-program’ advertising.

It will allow for more refined segmentation of the audience by using data related to choices they have made relating, not only to what they watch but within the stories themselves. And in a world where consumers are increasingly wary about data-sharing and how platforms use that data, Netflix is opening the door to capturing a whole new type of information with preference indications that are common now in ad-buying.

Up until now, Netflix has avoided the temptation of advertising as a revenue source and contented themselves with view subscription fees. But with the share price down roughly 35 per cent from its peak and increased competition coming from Disney+ and Amazon’s Prime Video, it looks like the company may be testing the waters for new revenue streams.

In Bandersnatch for example, when I was asked what brand of cereal our hero should eat, I selected Frosties over Sugar Puffs and my decision – made as an instinctive reaction in just a second – is definitely indicative of my personal preference between the two.

So now imagine I watch another programme on Netflix where someone eats cereal. Why wouldn’t Kellogg’s, General Mills or another buy the product placement to target me with their Frosted Flake cereal. The genius is that this ad could actually be programmatic allowing for every viewer to see a different cereal based on the past choice data that Netflix has captured in programme.

If that sounds a bit fantastical to you, it shouldn’t. It would be easy to do with a simple green screen cereal box. In fact, similar technology is already being used by broadcasters of sports matches, where they show different advertisers on the perimeter boards based on the viewing market.

So yes, product placement can now enter the programmatic space, and Netflix may be positioning itself as a data rich provider of this sort of inventory. And given their original programming content, we could see many new brand opportunities in entertainment sponsorship and product placement over traditional advertising.

Given the increased tendency for consumers to block ads and the effectiveness of quality product placement, this may just become a new channel of choice for advertisers. Just think who wouldn’t want the brand lift that soap brands got from sponsoring daytime television in the 1950s or the 50 per cent sales growth that Reese’s Pieces saw after ET. Or more recently, the brand life that Heineken, Omega, and Aston Martin all get from James Bond.

In short Bandersnatch, with all its interactivity isn’t just a potential view of the future of data in entertainment and product placement, but a herald back to soap operas and the brand sponsorship of old.

In truth though, this is all speculation. It serves only to demonstrate the richness of what will be possible with data in the future. As for how Netflix really plans to move forward with interactive content and advertising, well only time will tell.

Peyton believes programmatic product placement is just around the corner

Justin Peyton is Asia-Pacific chief strategy and transformation officer at Digitas – and is based in Singapore

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