Comment: Verve Group’s Morgan Jetto on Netflix ads

netflix - Image by yousafbhutta of Pixabay

L’Oréal and Nyx and Anheuser-Busch InBev are among the first global brands to sign up to Netflix’ advertising platform, launched this month by the streaming giant.

Although hugely popular among some brands keen to have the cache of being the first advertising partners on the platform, there have been some reports that not everyone is impressed with the price points.

And, as Morgan Jetto, GM, Programmatic Partnerships & Demand at Verve Group, comments, whist it remains to be seen how the new advertising channel will fare in the long term, there is a wild card in the Netflix pack… 

morgan-jetto-verve
Morgan Jetto, GM, Verve Group

“Much of what has been discussed around Netflix’s ad-supported model has been around its $65 CPM target price.

“With the exception of Bloomberg Business on connected TVs, no one single publisher can command that sort of CPM rate.

“I expect the CPM rate to soften somewhat, given that the new model will challenge Netflix’s existing audience to determine how important a life without ads matters to it.

“On a larger scale, the change will come in Q4 ’22 and Q1 ’23, as digital ad dollars are set for increases in spend (despite a recession), and CTV is a catalyst for that growth.

“The wild card for this new model? The Netflix gaming platform. Apptopia recently reported that 99% of Netflix users have never touched a single video game on the platform.

“When it was unveiled, Netflix Games touted its “no ads, no extra fees no in-app purchases” approach, and that its games were exclusive to Netflix.

“If the gaming business can show any signs of growth, perhaps that CPM won’t be so bad, after all.”