Netflix’s CMO on why it holds back 25% of its marketing budget for surprise hits

CANNES, France — Even Netflix doesn’t always know when something might be a streaming hit. That’s why Netflix CMO Marian Lee plans for the unpredictable.

Speaking Tuesday night at the Wall Street Journal House at the Cannes Lions International Festival of Creativity, Lee broke down how the company remains agile across its marketing strategy by design.

“We reserve about a quarter of our marketing budget to, as we say, chase the heat,” Lee told Sarah Krouse, technology and media editor for The Wall Street Journal. “None of us really can predict with a hundred percent certainty what is actually going to go viral.”

That’s how sleeper hits like Baby Reindeer and Adolescence gain sudden, strategic amplification — regardless of initial priority status.

“Some things we can see a mile away,” she said, while other titles might need an audience check.

That reactive mindset has become essential as Netflix balances thousands of titles across dozens of global markets and then uses its data-rich ecosystem to work with advertisers in customized ways, especially as it grows its live events.

In the more than two years since Netflix debuted its advertising offering, the strategy has never been about simply dumping ad dollars into media; it’s about adapting to the changing moods of real-time culture quickly.

“You can’t just throw a logo on Stranger Things and call it a day,” Lee said. “We’re never going to jam an integration into something that doesn’t make sense.”

Both buyer and seller

Before 2022, Netflix had resisted advertising. But when WSJ’s Krouse described its entrance to the advertising landscape as a “slow start,” Lee pushed back. She pointed out that the company built its own tech stack and now has dedicated teams across 12 markets.

Lee added that she’s hyperaware of the pressure marketers face and how the decision to advertise on the platform takes a lot of trust and discussion.

“You don’t know Netflix as an advertising partner, so I’m introducing you to a different way of working with us,” she said. “And then I’m asking you to trust us, especially in year one, when it’s like, hey, this is a hope and a prayer. Luckily, it has grown very fast. We have the audiences there and you want to work with us, but those creative conversations take time.”

Lee brings a rare dual lens to the table, shaped by her position as both a media buyer and seller. On one side, she’s managing Netflix’s global media investments, and on the other, she’s pitching advertisers to spend their budgets within Netflix’s ad-supported tier.

“As a media buyer, you want your dollars to work really hard for you,” Lee said. “I’m really tough on our media teams to really think about how, again, we’re reaching those audiences, but we’re engaging them.”

‘Wrestlers need to do their taxes too’

That creative mindset often leads to surprising collaborations. When Intuit TurboTax approached Netflix with a challenge — make tax season more interesting — Lee’s team offered up WWE’s Monday Night Raw. As Lee says: “Wrestlers need to do their taxes too.”

The custom video, which ran during tax season, starred WWE Superstars Rhea Ripley, Rey Mysterio and Bron Breakker, who shared their frustrations of filing taxes in their own WWE-driven way.

Lee said that the creative teams that worked on the custom video are the same ones that market Netflix shows and movies.

Lee also reflected on how many of Netflix’s brand moves stem from deep social listening, citing examples like the streamer’s decision to develop permanent Netflix House locations in Dallas, Philadelphia and Las Vegas after touring over 40 global fan experiences.

With more than 1.2 billion social followers globally, Netflix’s content strategy is increasingly localized and platform-specific. To keep up with shifting behavior, Lee’s team is constantly testing new formats — and even bringing on high school interns to advise on Gen Z and Gen Alpha usage.

The brand’s “Netflix2” Instagram account is one such example — an outlet for more “unhinged” content that wouldn’t fit the main page.

“I didn’t get it at first,” Lee admitted. “But the team told me, ‘That’s because you’re not the audience.’”

When asked about using AI in marketing efforts, Lee said the streamer wasn’t using generative AI to create global marketing materials yet — but that she is using it for internal tasks, including admitting to using it to write performance reviews.

“I had to write 26 reviews and was running out of time,” she said. “It helped me get the core message down, clean it up, and saved me hours.”

Everyone in the room had a good laugh at that — maybe because they felt a little less guilty to be doing the same.