Can an ad-funded Netflix tier deliver for marketers?

netflix 1 Image by Tumisu, from Pixabay

Next month global streaming giant Netflix will introduce its first ever ad-funded and ad-supported subscription service, giving brands access to its audience.

The move comes as many in the world are forced to make cutbacks amid an unprecedented cost-of-living-crisis.

For agencies and advertisers it could become a lucrative and highly sought after new channel for brands to sell through. 

But Netflix has virtually no experience with the advertising world, and, as William Keggin, Director of Advanced Advertising, UK at LiveRamp, explains, the streaming giant will need to make sure it has the right measurement tools in place to give brands meaningful data about those watching its ads…  

William Keggin, LiveRamp.

Netflix’ ad-supported tier is certainly well-timed. As energy bills treble and inflation pushes up the price of food and rent, many UK consumers are looking to save money wherever they can. 

Halving the cost of their subscription streaming service could therefore be a very welcome relief. 

Also pleasing is Netflix’ commitment to delivering a good customer experience with controlled ad frequency and a desirable ad-to-content ratio. 

But while Netflix’ new package may be a bonus to cash-strapped and ad-tired consumers, can it deliver for its other paying customers – advertisers?

Ad-funded streaming – measurement matters

As we so often hear in the ad world, ‘if you can’t measure it, you can’t manage it’ – Netflix’ recent move to sign up with BARB is a clear message to brands that it intends to make its offering measurable. 

But is a standard designed in the 1980s still relevant today? 

BARB may very well prove a useful way to measure who is watching, who they’re watching with, what they’re watching, and how and when, but it falls behind other media in telling advertisers what happens after someone views an ad. 

Without being able to tie ads to a desired business outcome, this measurement falls short of what advertisers have become accustomed to in digital channels.

New ways to watch: How Netflix’ ad-funded screens might start to look.

Netflix possesses the assets and partnerships to CTV advertising measurement on par with the granularity of digital.

Indeed, the subscription data Netflix sits on is a goldmine. 

Harnessed in the right way with the right technology through Netflix’s Microsoft and Xandr partnerships, it could result in the advertiser’s dream: highly personalised, consented ads delivered to the right consumer at the right time – the kind of data and customer insights that matter in the boardroom.

If Netflix adequately invests in measurement and attribution, it will give marketers the evidence they need to invest more in TV, giving brands better returns than ever before. 

The biggest takeaway is that advertisers must ask for more: ask for consented access to customers when they’re watching Netflix; ask for privacy-conscious data collaboration opportunities to understand what, how and when customers are watching, and to be able to measure actual business outcomes. 

If advertisers cannot understand if their customers actually buy more of their products after watching ads on Netflix, we will likely see brands return to digital channels where they can measure their ad spend with far greater precision.