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Chart by Mike Sullivan

Netflix’s Winning Formula: Cutting Ad Spending Without Hurting Growth

By  |  Feb. 9, 2021 6:00 AM PST
Photo: Chart by Mike Sullivan

The race to sign up subscribers in the streaming wars is a test of marketing prowess as much as it is of programming strength. That’s what makes Netflix’s performance last year so impressive: The streaming giant added subscribers even as it cut spending on advertising and as a slew of older entertainment companies launched competing offerings with big bursts of marketing.

A recent securities filing by Netflix revealed that the company slashed spending on advertising to $1.45 billion from $1.88 billion globally in 2020. New data from two research firms provides a glimpse of where Netflix made cuts. For example, the streaming giant cut its U.S. ad spending on Facebook by more than half last year, to $21.6 million from $48 million, according to Pathmatics.

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