Dive Brief:

• Microsoft this month stirred social-media buzz with retro-themed product announcements that turned out to be part of a larger promotional tie-in for Netflix's hit series "Stranger Things," according to information on the company's website. The software giant kicked off the promotion on July 1 by posting a video on its social media channels to announce the release of an "all-new Windows 1.0," leaving followers to speculate on its meaning.
• Microsoft's subsequent posts highlighted its products from 1985, when season three of "Stranger Things" takes place, and dropped clues about the show, including messages partly written in Morse code such as: "Of course there's nothing strange about Windows 1.0. Don't worry. Everything will be fine on July 8th." That day, Microsoft released a Windows 1.11 mobile app that has classic programs from the original version of its desktop operating system and show-related content.
• Microsoft also announced the July 20 introduction of Camp Know Where, based on a fictional summer camp referenced in "Stranger Things." The camp gives teenagers a chance to visit Microsoft stores or go online to participate in computer workshops that are tied into the show. Finally, Microsoft is running a social media contest to give away a collectible arcade cabinet with a "Stranger Things" theme, a new Xbox One X game console and a year-long membership to Xbox Game Pass Ultimate.

Dive Insight:

Microsoft's tie-in with "Stranger Things" gradually unfolded over several days surrounding the July 4 premiere of the show's third season, helping to build excitement for a marketing push aimed at the next generation of technology users and developers. Microsoft cleverly highlighted its history in software development, including the 1985 introduction of the Windows operating system, in social-media posts that make sense to fans of the Netflix show. "Stranger Things," whose central characters consist of teens grappling with paranormal activity in a fictional Indiana town in the 1980s, has been a breakout hit for Netflix by appealing to kids and their nostalgic parents.

By releasing a Windows 1.11 app that has clips from the show and clues about key plot points, Microsoft is taking aim at today's tech-savvy teens who are more likely to depend on a smartphone for entertainment. Its Camp Know Where activation will provide a more immersive experience for people who visit its stores, where they can check out Microsoft's complete line of products. The events include "Rule the Arcade" that lets visitors code their own video game and "Strange-Ify Your World" that highlights Microsoft's software tools for making video with mixed reality and 3D. Microsoft also created a special "Stranger Things 3" landing page that has additional content to download, including desktop wallpapers.

For Netflix, the Microsoft tie-in is another sign of how the streaming-video company aims to build businesses around licensing, product placement and promotional activity for its popular shows in lieu of ads, which the subscription service doesn't have. However, the marketing tie-ins have multiplied around some shows, Netflix runs the risk of overplaying its hand and alienating viewers if programming comes across as little more than a promotional venue. For example, Microsoft is among the 75 brands that have struck deals with Netflix for promotional tie-ins and merchandising with "Stranger Things," The New York Times reported. Coca-Cola planned to resurrect New Coke as part of a tie-in with the show. Burger King teamed up with Netflix on the "Upside Down Whopper" while Baskin-Robbins began selling ice cream flavors inspired by the show. Nike and H&M also designed apparel with "Stranger Things" themes to appeal to fans.

For marketers, the risk may be worth the potential downside, given the enduring popularity of "Stranger Things." Netflix announced on Twitter that the third season of the show was viewed by 40.7 million households in its first four days, a record for the streaming video company. Netflix also said 18.2 million households watched all eight episodes. To participate in the $122 billion market for entertainment-linked merchandise, Netflix needs hit shows that are sustained over several seasons, Bloomberg reported. Netflix tends to cancel most of its new series after two seasons because of viewership declines, but "Stranger Things" has been an anomaly in growing its audience with each new season. Netflix next year will release a mobile video game based on the show that will resemble "Pokémon Go" in combining digital imagery with a player's physical location.