Ads are coming soon to Netflix – we’re keeping tabs on everything we know about the new ad-supported tier
The streaming giant is offering advertisers a November launch with aggressive pricing, according to advertisers briefed by Netflix. Netflix competes for advertising dollars with a growing number of competitors, including ad-supported upcoming Disney+, NBCUniversal’s Peacock, Hulu, Amazon and Warner Bros. Discovery.
AdAge reported that Netflix expects the ad-supported level to generate 500,000 subscribers by the end of the year, compared to 220 million total subscribers.
“We are still in the early days of the decision to launch an ad-supported tier at a lower price, and no decision has been made,” a Netflix spokesperson said of the funded tier launch. by advertising. “So this is all just speculation at this point.”
Here’s everything we know about Netflix’s advertising plans.
Netflix relies on Microsoft to sell ads
Netflix recently hired top ex-Snap ad sales executives to build its ad team. Jeremi Gorman will be president of global advertising and Peter Naylor will be vice president of advertising sales.
Advertisers have been told they can buy Netflix ads through Xandr’s demand-side platform, the ad tech company’s tool that buys programmatic ads for marketers, a tech executive said. advertising informed by Microsoft. They will be able to set up programmatic advertising campaigns with guaranteed prices and placements. For advertisers not using Xandr’s DSP, Netflix will offer insertion orders, a more traditional way to buy TV ads. Either way, the ads will ultimately be sold by Netflix, not Microsoft, the executive said.
Netflix seeks the best advertising prices
Netflix charges CPMs (the cost to reach 1,000 people) between $60 and $65, according to advertisers who heard Netflix’s presentation. That would make Netflix one of the more expensive streaming TV options for marketers, slightly above last year’s HBO Max rollout.
Advertisers said they expect prices to drop once Netflix’s ad-supported tier launches, as has been typical with other streaming services like NBCUniversal’s Peacock. Netflix is also asking ad agencies for one-year commitments ranging from $10 million to $20 million depending on the size of the agency, similar to the initial deals, the sources said.
Netflix is also asking advertisers to engage quickly. Two advertisers said Netflix had asked for submissions by the week of September 5, overlapping with Labor Day. Other sources said he was looking to approve advertisers by September 30. Netflix is looking for names of potential takers and a general understanding of how advertisers allocate their budgets throughout the year, which suggests Netflix is targeting the biggest TV consumers.
Netflix will have fewer ads than its competitors
Streamers generally offer advertisers lighter ad loads than traditional TV for a better viewing experience, and Netflix similarly offers advertisers four minutes of advertising per hour of TV watched, on par with HBO Max and slightly less. than Peacock’s five minutes, said the executive who was briefed.
Netflix is also looking to differentiate itself with tools that limit the number of ads people see to one ad every hour with a maximum of three ads per day, the executive said.
Advertisers say Netflix will be picky about ads
Netflix only allows a handful of major brands as launch advertisers and plans to review each ad for high-quality messaging and creative, the executive briefed by Netflix said.
Netflix has a long history of working with big brands like Coke and GMC to incorporate product placements into shows like “Stranger Things” and “Queer Eye.” He touts such partnerships to advertisers and his ability to get their ads done, the executive said.
Advertisers want data and metrics
Netflix offers advertisers the ability to target ads by genre, country and Netflix’s own daily Top 10 rankings while looking to add more specific parameters such as age, gender, content rating and time of day, said the executive informed by Netflix.
Advertisers in one area say Netflix lacks measurement. Netflix does not offer advertisers statistics and data provided by third parties that verify audience size, at least not initially. Metrics like attribution that track what people do after seeing an ad are also not offered. This data has become standard in how advertisers measure performance and verify streaming platforms.
“They demand rather than sell,” an ad buyer previously told Insider. “They’re new to all of this.”