Netflix Is Showing Its FaNgs

While writing the future is exciting they face some of their own challenges related to their content The content was not designed for ads and likely their production and carriage agreements did not contemplate ads since Reed was so dead set against it In addition to content their subscribers expectexpected an adfree model and many have gone there because of thisA few questions I have been pondering as I think about this launchWhat should the future of TV be if you could write itWhat is the most ideal ad experience for the user to not impact churn and help with user experienceShould there be pods or a completely new ad experience that is more relevant and useful for the consumer and should that include some version of interactivity and shop abilityShould all ads be made custom for Netflix and the content vs the standard 15s or 30s we have come to know Meaning are there more snackable style spots like TikTok has had success withShould they require audience targeting and associated creative to ensure everything a consumer interacts with is relevantShould pricing be based on attention or some other metric than CPM or a hybrid modelSeveral of the questions above do entirely break the mold of how we think about TV today The question is whether Netflix is chasing revenue to make up for their losses or if they want to deliver a truly differentiated model and write the future of TV advertising as we know it as they could and should have before the launches of Peacock discovery Paramount and others who have taken share After all Netflix should have been the tenmillionpound gorilla and honestly could have owned the market if they acted years earlierSo what will the future hold Will the company show their teeth and take a bite out of Facebook Amazon and GoogleThe jury is certainly out but the early indication based on presentation to agencies and feedback from them not yet directly from Netflix is that at launch they are making a few changesOnly one ad from any advertiser per hourA very high CPMA sizeable Upfront commitment based on a launch of 500k MAUsAll the above is based on early presentations so this may and likely will hopefully change What will work in this model and what could bite them backNetflix viewers have been coveted as the Holy Grail This has been an elusive audience and agencies and brands alike cannot wait to be on this platform Candidly I too am looking forward to having our clients buy inventory However most Netflix consumers prefer an adfree model Thus the adsupported Netflix consumer will be the consumer that already has many other subscriptions While there should be a desire to use this platform from advertisers and agencies alike as it will be greatly beneficial one must wonder how long it may take for rates to settle like other platforms had to do With a lower reach and frequency similar viewers from other platforms like it and a high CPM does the value of quotNetflixquot match these factors CMOs and agency leaders should be asking how they value this consumer and the Netflix platform If Netflix sticks to the above early model the CPM and reach frequency numbers coupled with the possibility of no innovation or change to the model we must carefully measure the value hereThe way ads appear to be rolling out though seem to be following the model that all other streamers have Let a bunch of large brands on board at high buyin rates There are agency leaders and CMOs likely lining up to be the first on the platform for their own personal brand benefit Hopefully some of them will create some unique ads ones that are awardworthy to add an award to their resume along with a first or launch partner I am not suggesting there is not value hereI am sure everyone can remember the launch of other platforms Peacock discovery Paramount etc The user experience was not great because the ads were from the same advertisers over and over and most with no targeting On one of these streamers I could recite the Lowes and Charmin adsNetflix has an opportunity to bring in targeted ads so at least you do not have ad fatigue One may argue that it will not exist since the frequency of any advertiser is one per hour but time will tell The devil39s advocate in me wonders with a frequency of one per hour how can you get the needed reach and frequency for the ad to deliver against brand or performance metrics Time will tellConsumers now have an answer on what they should expect starting with a 699 basic tierI am very excited to finally see ads from Netflix If they innovate they will give FANG a huge challenge and will likely take a bite out of the others If they follow the path they seem to be going down I also expect great things but not as great as if they bring in some of the innovation suggested aboveClick the social buttons to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Netflix Is Showing Its FaNgs

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Gabe Greenberg

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