Netflix Buys LA Billboards: What Does It Mean?

With a market cap north of $165 billion, Netflix’ expected purchase of up to three dozen billboards in Los Angeles for a reported $150 million may seem like a rounding error.

But Netflix’ marketing move is much more than play-money tinkering.  Here are five takeaways on what Netflix-buys-billboards means:

1.) Netflix loves billboards, and knows how to create fabulous creative.

Netflix is a skilled practitioner of billboard art.  At the most recent OBIE Awards for best OOH design, Netflix won OBIE Gold in the media category for its show Stranger Things (agency of record: Lindeman Associates).

In addition to award-winning promotion of its content, Netflix also features its talent in large-format ads.

Netflix has the courage and smarts to venture into the tricky but rewarding realm of humor.   Last year, “Netflix is a joke” billboards teased its expanding comedy offerings.

2.) Los Angeles is the entertainment capital of the world, and Netflix wants to talk to LA 24-7.

“Netflix has quickly earned VIP status in the out of home (OOH) space. Like all studios, Netflix understands the power of the unique dialogue between Angelinos and OOH media. Ultimately this move is an investment in street equity and an affirmation of our popular culture” said Angelino Rick Robinson from his desk at the Hollywood office of Billups, a Portland-based OOH media agency.

“This is much, much more than a land grab. The power of OOH Media has yet to be fully realized.  There’s dormant equity ready to be unleashed.  Netflix sees this.”

I’m from the Midwest.  This image of Los Angeles sticks with me.  During our trade association convention there in 2013, we closed down a farm-to-table restaurant on a Sunday evening.  The waitress said she had to get up early the next day.

We assumed – incorrectly – that she was on breakfast duty.  Actually, she was on an early flight East to show a film she helped make and also starred in.

Los Angeles is entertainment, Netflix wants to be top of mind.

3.) Streaming content (and creating content), Netflix competes with Amazon, Hulu, HBO, Disney, and Comcast . . . all with deep pockets, promotional prowess, and a river of content.

Netflix wants to stand out by promoting its content exclusively on its billboards in Los Angeles.

4.) Channeling Karl Eller.

Inducted into the Advertising Hall of Fame in 2003, billboard legend Eller and Clear Channel Outdoor put premier brand Coca-Cola on exclusive OOH space in the early days of this decade, demonstrating the power of a fixed-messaging tactic.  Netflix is in good company.

5.) Out of home helps sustain Netflix’ premium-brand status.

Netflix quickly achieved top-brand status, like Apple and Nike:

In June, Netflix stock topped $400 a share, up from a 52-week low of $144.  A success by any measure, Netflix can promote itself in any way it chooses.  In the entertainment capital of the world — where your waitress could be producing a movie — Netflix chose to buy billboards.

Originally posted to AW360.