Netflix opens up to advertisers and creates Netflix ADS. Starting now, in fact, Netflix will begin offering an advertising-supported subscription tier for 6.99 euros per month starting Nov. 4 in an effort to increase the number of subscribers. Until a few months ago, with crisis and recession behind us, Netflix experienced a downturn that many people juxtaposed with the cost of the package.
So they came up with the idea of creating a package that cost less but with sponsorships inside. And just like that comes one of the most interesting tools of 2022 for advertisers.
What is Netflix Ads
Netflix Ads is a system of advertisements within the well-known streaming video service Netflix, which gives advertisers the opportunity to sponsor companies through commercials, but exclusively aimed at subscribers with the basic plan that includes advertising.
Italy is one of 12 countries that will have access to the “Basic with Ads” monthly subscription, which is limited to 720p video quality, a reduced series catalog, and no ability to download videos to the device.
The addition of ads will save users 2 euros per month compared to the “Basic” package (7.99 euros per month), which has no ads and allows subscribers to download videos. Netflix also offers a “Standard” plan (12.99 euros) that allows 1080p streaming and a 4k-enabled “Premium” package (17.99 euros).
Greg Peters, chief product officer at Netflix, said the hope is that the ads will increase the number of subscribers.
“We firmly believe that a lower price point aimed at consumers with good incremental monetization of ads will allow us to both increase membership and create really significant incremental revenue and profit streams over time,” he said during a recent media call.
How advertising works on Netflix
Netflix said it aims for about 4 to 5 minutes of ads per hour with 15- to 30-second ads before and during videos.
When asked how the company would deploy mid-roll ads without interrupting the narrative flow, Peters said Netflix is using algorithms and its “in-house content coding teams to find those natural breakpoints so we can run the ad.”
Why Netflix Ads came about
Netflix first reported the inclusion of ads earlier this year after the revelation that it lost 200,000 subscribers in the first quarter of 2022.
The problem Netflix identified at the time was twofold: the company was running out of households in which to expand and faced increased competition.
In addition to adding advertising, Netflix said it would initiate a crackdown on account sharing to increase the number of active subscriptions.
Just a couple of years ago, Netflix CEO Reed Hastings said that advertising was unlikely for Netflix , saying that “advertising looks easy until you get into it.”
The sudden need for advertising forced Netflix to move quickly by creating an advertising sales division and incorporating advertising technology into its service.
To do this, Netflix tapped Jeremi Gorman, a former executive at social media company Snap, as president of global advertising, who last week praised the company for building its advertising product in just six months.
Netflix has partnered with Microsoft for technology to deliver its ads, along with user verification companies Double Verify and Integral Ad Science.
Where there are ads, there is data collection, but Netflix said it is trying to keep the amount of data it collects fairly light, initially only using date of birth and gender to help target its ads demographically.
Mostly, it seems Netflix wants to make the content of the ads relevant, showing the example of the makeup and hair product ads delivered during the series Emily in Paris.
Translated with www.DeepL.com/Translator (free version)
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