Netflix with Ads Attracts Some Big Brands – But Others Are Unimpressed | netflix

Netflix launched its first subscription package with ads in a bid to spur growth by attracting cost-conscious users, but the rushed launch, high slot prices, and accompanying demands didn’t help. convinced some advertisers.

Basic with Ads, which went live in 12 countries this week, costs £4.99 a month in the UK – £2 less than its cheapest ad-free plan – and hopes to appeal to households with shrinking budgets due to the cost of living crisis.

However, while Netflix hits including The Crown and Stranger Things will be available, around 5-10% of the content it licenses to major Hollywood studios, such as Universal Pictures and Sony, has yet to be released. was renegotiated for service due to its seven-hour shortened lifespan. month launch calendar.

The world’s biggest streaming company said it had nearly used up all advertising inventory at launch – a light load of four to five minutes per hour, compared to a traditional UK TV broadcaster, which can stream up to at 12 minutes per hour in the evening. time.

Beauty brands such as L’Oreal and Nyx and Anheuser-Busch InBev, the world’s largest brewer, which owns brands such as Stella Artois and Budweiser, jumped at the chance to be named launch partners.

However, a number of media agencies, who buy advertising space on behalf of clients, are unimpressed with the product being put on the market and the requirements for signing up.

“Unless you’re an advertiser who desperately wants PR first on Netflix, there’s a lot of trouble before you get a decent advertising deal for customers at launch,” said a senior executive at a company. multimedia agency involved in discussions on the purchase of advertising space.

In April, Netflix reported its first quarterly drop in subscribers in more than a decade, prompting investors to wipe more than $100bn (£88bn) from its market value. The company responded by announcing that after years of opposing the idea, it would launch an ad-supported tier next year. That timeline was then hastily accelerated to beat a similar Disney+ offering that went live in the US from December 8.

Netflix menu on a screen
Netflix announced its first quarterly drop in subscribers in more than a decade in April. Photograph: Gene J Puskar/AP

Netflix sells its advertising space through Microsoft at a higher price of around £50 for every 1,000 viewers reached. This is around double the rate charged to advertisers by ITV and Channel 4 on their streaming services, and closer to the cost of traditional 30-second commercial breaks on established TV channels.

Netflix is ​​also asking for quarterly spend guarantees from advertisers, but with no independently verified audience data and a lack of ability to target ads, and a media source said they were told they had to sign a deal in a week or miss until January.

At launch, Netflix lacks the technical capability for specific demographic targeting, such as the ability to reach an advertiser-coveted 16-34 audience, and other standard features common to traditional broadcast and television on demand. .

Netflix, which only asks subscribers on its new ad-supported tier for their date of birth and gender when they sign up, is trying to bolster its credibility by signing up with various independent organizations such as Barb (the Broadcasters’ Audience Research Board ) and measurement partners DoubleVerify and Integral Ad Science.

It intends to create a much more robust offering to attract advertisers, including broader advertising targeting capability next year – at which time it intends to raise prices – when we know more the popularity of the new package and the viewing habits of the public.

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