Netflix Meet CTV, CTV Meet Your Next Big Ad Space Player

CTV has always been at the forefront of digital media marketing, and things are officially ramping up for 2023. Starting this November, Netflix will finally roll out its new ad-supported tier for a reduced user monthly rate, yet another sign that the disruptive streaming service has slowly become a cable package by another name.

Netflix Gets Connected

As an analytics-first company, Net Conversion has truly enjoyed introducing our clients to omni-channel strategies – inclusive of channels that some may think are not as “digitally seamless” as they are. Year over year we’ve ensured that not only we keep on top of all the newest innovations and advancements in the industry, but also ensure that we are able to analyze and report on the successes to meet our clients goals as efficiently as possible. This time, it is Netflix’s migration to the CTV landscape that has caught our eye, and should scratch yours too. This service will be available for advertisers directly through Netflix, or through Xandr, and opens up a large market for advertisers to target their newest customer.

Numbers With Netflix

Although the service is yet to be rolled out amongst advertisers, CPM projections have been released surrounding this new ad-supported tier. Media Buyers can expect to facilitate an average CPM of $65-$70 while utilizing Netflix Direct, and an average CPM of $80 if utilizing MIQ & Xander due to small facilitation fee.

What we learned from a Netflix Representative is that this platform will have its limitations in terms of accessibility, content, and measurement. For example, the platform will include frequency constraints and more due to parameters put in place by Netflix. Restricted content includes politics, gambling, crypto, and tobacco. Ads will be inclusive of both desktop and mobile, and include different ‘skip settings’. On top of this, measurement will be inhibited as the platform will not allow for conversion tracking. Overall, the platform is impressions based with limited tracking.

Targeting wise, Netflix has confirmed there will be an incremental percentage fee on top of the baseline CPM for any targeting, though they haven’t shared specifics. In terms of audience data by show consumption to inform targeting, they didn’t answer that specifically but instead say they plan to experiment with different audience targeting over time, and in year one will focus on subscriber age, gender and language segments.

Interested in how Netflix (currently) stacks up to CTV competitors? Check out our little cheat sheet here with need to know facts of the CTV giants in the industry:

Now that we know a bit more about this upcoming ad-serving platform, all that is left is our POV. At the moment, we would not recommend testing Netflix due to the limitation in targeting, high minimums in comparison to other players in the landscape and most importantly the lack of tracking at this stage. Nonetheless and as always, we will keep our eye out for any changes and innovative improvements in this potential partner for our clients.

Performance Update: 2023

Update: In its virtual upfront presentation, Netflix emphasized that it is not a niche player in the streaming advertising game. The company revealed that its new advertising tier has nearly five million global monthly active users with a median age of 34, six months after launch. The ads member base has more than doubled since the beginning of the year. Over 25% of new sign-ups have chosen the ad-supported plan, suggesting potential for further growth.

Additionally, Netflix introduced new advertising options for partners, such as sponsorship opportunities for popular series at launch and associations with holidays and other categories. Marketers can align with the Top 10 feature to gain visibility in the platform’s most popular shows. Additionally, Netflix is enhancing measurement capabilities for advertisers, with plans to offer Nielsen Digital Ad Ratings in Q4, enabling audience measurements for campaigns on the ad-supported platform.

Alexia George, Lead Marketing Specialist + Logan Didier, Marketing Intern

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