Netflix’s head of advertising, Amy Reinhard, has begun a search for a new ad marketing leader, and insiders say that while many things are still up in the air, it’s clear that whoever she’s paying for debt will be rooted in technology beyond Madison Avenue.
To understand how Reinhard is approaching the hire, Business Insider spoke to 11 people with knowledge of the search or who are close to Netflix’s media business. They have been granted anonymity to protect their relationship with the company.
Netflix conducts extensive research that includes the people and technology that run in entertainment companies such as Amazon, Roku, and Warner Bros. Discovery, people familiar with the process said.
Some Netflix execs have recently been targeted for at least exploratory discussions about marketing services with deep digital marketing experience, including Lisa Valentino, a former Disney EVP in charge of some of its digital initiatives; Ryan Gould of WBD; and former WBD exec Jim Keller. Others with those credentials some think could be in the mix include Pooja Midha, EVP and GM for Effectv, the media marketing arm of Comcast’s cable division.
“They’re looking for someone who understands TV investment, linear, but has digital skills to build products and systems,” said one person who will be in talks with Netflix. “They’re really looking for a unicorn. And someone with gaming experience will need to invest in gaming.”
Reinhard is telling some people that he wants a leader with a solid background in advertising products and programmatic marketing, which is increasingly being sought by advertisers, five people with direct knowledge told BI. That would be a change from Naylor, who has held leadership roles at Snap and Hulu and is well known for his deep ties to the media business.
People who spoke to Netflix said Reinhard appeared to be still mulling over topics such as how much Netflix should rely on automation and sales, and how much the company should use non-partner partners to drive growth. when he builds his own media server, and how much he should share with important customers such as family income and advertisers.
Netflix has raided traditional TV and media companies, as well as new digital platforms, to build its media team. But at its heart, Netflix is ​​a technology company, and Reinhard’s discussion has shown some that its main strengths in the media business are technology and products, not Madison Avenue.
“They look at the media business as being unscrupulous and disciplined,” the former Netflix spokeswoman said.
Peter Naylor on the Netflix show 2024. Dimitrios Kambouris
Insiders say Netflix’s ads and products are at odds
Netflix is ​​the dominant player, with 278 million subscribers worldwide, but it is looking for new areas such as media and games (both under co-CEO Greg Peters) to grow.
Executives have said they expect ads to eventually account for 10% of Netflix’s revenue, but growth has slowed. Peters made the comments on the company’s second quarterly earnings call, saying that ad revenue has not continued to grow to support advertising, and that the company has a lot of hard work ahead of it. Build all the features that advertisers want.
The job fell to Reinhard, a Netflix veteran and independent broadcaster who was named chief media officer in October 2023.
Insiders said that Netflix’s ad placement faced conflict with the product at the beginning. They also said that Naylor clashed with Jon Whitticom, VP of product for media at Netflix under Reinhard, over which product to deliver to advertisers. Under Whitticom, Netflix helped advertisers buy its ads from tech companies like Google, The Trade Desk, and Magnite. He plans to build his own in-house media server to help advertisers get their buys.
Insiders said that Whitticom is more focused on facilitating programs that will help the company and advertisers of all sizes rather than the features important to Naylor’s large advertising clients, such as some regional targeting rights and rights to prevent their ads from appearing on content they deem objectionable. .
Many said that Netflix has refused to give advertisers access to some of the information they rely on to facilitate the delivery of their advertising, citing the desire to protect user privacy. It is possible that the company plans to build those capabilities independently and privately, which will take more time. Big Tech companies are being scrutinized for how they handle user data.
Analyst Netflix said these issues hindered sales teams ahead of TV this year, as the entertainment industry makes room for nearly $70 billion in annual TV advertising spending.
“Marketers are saying, ‘You want to bring in these big numbers, you have to give us the tools that advertisers want,'” said a second person who will have discussions with Netflix. To this person, keeping Reinhard Whitticom is a sign that he values ​​products more than salespeople.
Insiders said the sales team also used the product to determine how many of Netflix’s most sought-after products, such as NFL games, should be sold programmatically rather than directly, where they can be sold as part of A large media package.
A Netflix spokeswoman denied that Naylor and Whitticom were in contention over products and said the company does not prioritize certain advertisers over others in its program moves. The spokesperson added that the company has allowed targeting by geography since the advertising plan was approved.
The spokesperson also said that the company is “very proud” of its future results and pointed to the first announcement that it had met its expectations and that sales were 150% higher than last year, without giving a price. dollar figure.
Netflix got off to a slow start with advertisers
Netflix’s deal with the media after leaving the business for a long time is one of the most followed stories in the media of late. He caused excitement among advertisers when he launched his ad campaign, Basic with Ads, in late 2022. Advertisers were eager to appear alongside his popular show, and ads were scarce in at the time.
But the effort got off to a rocky start. Some advertisers considered Netflix’s original price too high for the small ad-supported audience and the core offering. Netflix missed viewing targets for some advertisers.
Then, Amazon is full of advertising on Prime Video, promising to reach 115 million US viewers right out of the gate. Netflix, by comparison, says it has 40 million global users per month of the cheapest advertising level, which media experts estimate is up to 20 million US subscribers.
There are other obstacles along the way. Some media criticized Netflix for relying on Microsoft, its first partner, to launch its marketing efforts. Netflix also reshuffled its ad marketing leadership twice, replacing former ad chief Jeremy Gorman after a year, and with the recent departure of Naylor.
Netflix lowered its price to $29 per 1,000 views, the Wall Street Journal reported, matching Amazon, but some advertisers still viewed it as too expensive earlier this year.
Media buyers thought Netflix had previously asked about $800,000 for each of the two NFL games it recently acquired the rights to, and that the ads would go ahead of its commercial, non-commercial status.
Some people who will talk to Netflix said the film about the movement of social media and the persistent questions about the plan, they still think that Netflix can build a strong media business and will not have a problem to bring in a new marketing director, even if it doubles. down to automatic.
“The product is at an all-time high,” said a third person who will be in talks with the company. “It’s the biggest brand in advertising. Even if they’re not the first brand in advertising, they could be.”