Netflix just released more details on its ad-supported tier, which launches on November 3. Here are three things marketers should consider:
- The ad-supported tier offers a mixed bag to potential subscribers. The upside is of course it will be the cheapest Netflix subscriber plan at just $6.99 per month (though that’s only $36 per year less than the basic ad-free tier). The downside is that content library access and download capabilities will be less than higher-priced tiers. From an audience perspective, that means users are likely to skew younger with lower HHIs, so brands should take that into account when considering targeting strategies.
- Launch CPMs are notably inflated compared to other streaming environment inventory (though they should settle with time), and from a targeting perspective advertisers will initially be limited to “country and genre” with more demographic segments becoming available as sign-up data is captured. On the measurement side, initial launch metrics will be focused on impressions and traffic but Netflix is working with established players (DoubleVerify, Integral Ad Science, and Nielsen) to deliver more capabilities in 2023.
- That all said, Netflix still has the largest audience among streaming providers (~75MM in the U.S. and Canada), and with streaming fatigue and inflationary price concerns remaining top-of-mind this budget friendly ad-supported tier may end up attracting a sizeable demographic. Netflix estimates this tier will reach 40MM “unique viewers worldwide” by late next year, while other analysts say that milestone will take much longer to arrive. Only time will tell, so we’ll be keeping a close watch on subscriber forecasts when Netflix releases its next earnings report.
Bottom line: Netflix inventory will certainly present some attractive options for advertisers, but brands interested in reaching the streaming giant’s audiences need to carefully weigh the pros and cons of jumping in early (versus taking a wait-and-see approach). For more details on the impending launch, read the full story here on Adweek.