Netflix’s Basic Ad Tier Launch

 

By: Lora Polich Nov 11, 2022

Netflix’s Basic Ad Tier Launch

Opportunities for Higher Ed Marketers to Consider

Netflix held out for as long as it could, but after years of avoiding advertising on its platform, it is finally offering the opportunity to advertise to its very large audience. The much-anticipated ad-supported plan is bound to have marketers wondering what this means for their brand. This may provide an opportunity to level up their OTT marketing strategy. Is Netflix an ideal platform for higher education marketers? If you are considering Netflix as a new marketing platform for your college, here’s what you need to know.

The addition of the ad-supported plan is a result of losing millions of subscribers in previous quarters. This move also positions the streaming platform to contend with its competitors, who are investing heavily in growing their viewership. The addition of a cheaper streaming option provides them with the potential to see more growth.

Breakdown of the Basic Ad Tier for Advertisers as We Know It

Netflix rolled out an advertiser-supported subscription on November 3, 2022. They will maintain previous ad-free tiers. But, those who would like to stream on a budget can now take advantage of the most cost-effective Basic With Ads Tier. The cost of the Basic Ad Tier is competitive at $6.99/month compared to Disney+’s ad-supported plan, which is $1 more at $7.99. Subscribers with the Basic With Ads plan will be able to see ads that are 15 or 30 seconds in length, which will run before or during content. There will be an average of 4-5 minutes of ads for an hour of shows and movies. Advertising is excluded from children’s programming.

Massive Scale and Potential of Netflix’s Basic Ad Tier

As a pioneer of streaming services, Netflix has been resistant to ads. The new Basic With Ads tier opens the potential of reaching a larger audience. In Q3 alone, Netflix gained more than 2.4 million subscribers, and it expects growth in Q4. Not only does Netflix have a massive audience, but it also has highly engaged viewers who spend almost twice as much time on the platform compared to other streaming services. It accounts for 7.6% of TV usage, followed by Hulu at 3.7%, Amazon Prime at 2.9%, and Disney at 1.9%. With so many people tuning into Netflix, they are poised to offer unparalleled reach for advertisers.

Limiting factors to Netflix’s Basic Ad Tier

In its effort to have a leg up over its rivals, Disney+, it feels like Netflix may have rushed to market with its ad-supported product. As a result, there are currently constraints that leave a bit to be desired.

At the outset, targeting capabilities will be very minimal. Netflix only collects broad categories such as genre and country, and this is limited to the national level. Although advertisers will be unable to target based on age or gender currently, it will collect the date of birth and gender at sign-up. This suggests age-based targeting capabilities in the future. Any additional geographic targeting options are not available currently.

Netflix is also requiring high CPMs and extremely high minimum ad buys. The amount is considerably higher than its rivals, reaching millions of dollars. This makes it difficult for advertisers with a limited budget to see a return on their investment. This lack of targeting options combined with the high costs makes it difficult to effectively reach their target audience at this time.

Partner with an Agency That Stays in Tune with the Trends

What does this mean for you? Value can be found for those who want to increase brand awareness on a national scale in a quick and impactful way. Ideal advertisers include:

  • National brands
  • Large regional awareness campaigns
  • Institutions with very large and sophisticated awareness campaigns
  • Agencies with multiple strategic partners/clients, which may be bundled to meet the high minimums currently in place

In most cases, it probably isn’t a great platform for higher education marketers today. However, Netflix is one to keep an eye on as its reach is almost unmatched, and its targeting is likely to get better. The digital marketing experts at EDDY often see platforms become far more sophisticated over time and adapt very quickly.

If you need help with brand awareness, reach out to our Awareness Marketing experts at EDDY. From traditional linear to non-linear media, they will get your message in front of the right interested eyes.