Netflix and Other Streaming Platforms Open Up To Advertisers

 This November,  the once walled streaming platform Netflix is opening to the world of advertisers.  Soon to follow, are Disney plus and a slew of others. The thinking behind the move at Netflix is to provide a more affordable solution ($6.99 a month) as consumers are faces with paring down their streaming. And do provide a much needed revenue boost as streaming prices have become less elastic and their stock price has been hammered of late. This new tier of service " Basic with Ads" will initially be available in 12 countries including the U.S., U.K, Canada, Germany, Japan, Brazil and Australia. The streaming giant has plans to launch across all Netflix markets soon. The big questions are what portion of the existing Netflix subscriber base will switch to the lower tier, will this attract new users to the service, and will this garner enough of an audience to attract advertisers.  The format will be 4 to 5 minutes of ads an hour that will be :15's and :30's playing before and after content.  Netflix reports that it has nearly sold out of it's inventory.

Unlike OTT television,  the targeting will not be as precise and will initially offer broad based targeting on country and genres of programing like romance sci-fi, and actions and allow brands to opt out of sexual or graphically violent content.  Currently, the company does not collect information  on gender and age but plans to start collecting more information on consumers and eventually utilize the information for ad targeting. 

Netflix has developed partnerships with DoubleVerify Holdings and Integral Ad Science Holding corp to provide a third party verification of views.  Today, most agencies and brands rely on Nielsen Holdings PL the gold standard. Both advertising agencies and brands have had issues with content providers providing the data as it can be skewed.

While a fan of OTT and the ability to precisely target consumers by household, I believe it could take a while for the Netflix platform to make it into media plans for small Atlanta Advertising agencies like VWA.  Local and regional ad buyers are competing with tons for TRP's from national advertisers with much bigger budgets.  While it's an enticing promise of bringing our brands to audiences of The Crown, Ozark and Inventing Anna, without the ability target specific consumers the waste will just be too much for budgets under $10 million.  Netflix needs to adopt the precision targeting of performance based advertisers that can track consumers back to the sale.  Obviously, the product was never built to deliver advertising.  It will take some serious reconfiguring to make it competitive with the network products.  I look forward to seeing this format grow and will keep an eye on it as it evolves.