Netflix aims at “fence sitters” with new ads

Netflix Inc. on Wednesday took aim in a massive marketing campaign at what it described as “fence sitters” who know about the online DVD rental service but have not yet become subscribers.

The company began airing new television ads designed to push past “early adopters” into the mainstream households it needs to reach its ultimate goal — penetration of 20 percent of U.S. households, or 20 million subscribers.

Netflix has achieved more than 10 percent penetration in four U.S. markets.

A spot called “Billions,” because the company will ship its billionth DVD sometime next year, departs from Netflix’s usual practice of describing in its ads how to use the online service.

“The one billion concept is specifically targeted at those we call ‘fence sitters’,” said Neve Savage, Netflix’s vice president of marketing. “These are people who know about Netflix … but they still sit on the fence and don’t take that step to change their old-fashioned store-based rental habits.”

Spotlighting the one-billionth delivery, Savage said, is supposed to convince “moms with kids and the average Joe” who don’t have a lot of experience with Web-based services that “Netflix is a proven and tested operation.”

The company also launched “how it works” ads, which will run “everywhere” in rotation with “Billion” on national TV and radio and online.

Netflix said it will spend more in the current quarter on marketing, or subscriber acquisition costs, than at any time in its seven-year history. No financial details were given.

Savage added that the company will spend more in all communications channels, including mass media, Internet, direct mail “and other established vehicles.”