The Potential of Advertising on Netflix: A Game-Changer

With millions of subscribers worldwide, Netflix has become the go-to platform for binge-watching. Netflix captivates audiences with its diverse library of original content.

Update: Netflix has removed its basic plan in the US & UK for new or rejoining customers. The company is trying to draw more viewers into either paying for the full plan or watching the ad supported tier of Netflix.

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In a recent earnings call Netflix posted a 15% lift in revenue. Netflix said that average paid memberships increased by around 15% to 282.72 million viewers. Co-CEO Gregory K. Peters said “Our ads plan membership base was up 35% quarter-over-quarter. That's over probably four  quarters of really significant growth as well.” “We expect to be at critical scale as our advertising partners tell us they need us to be in each of our 12 ads countries in 2025.” Apparently engagement by viewers watching ad plans is healthy, with viewers watching a similar amount of content to those on non-ad funded tiers.

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The platform has so far succeeded with a subscription-based model. But with an increasing debt pile, Netflix has had to look for new funding streams. Advertising on Netflix is an exciting to reach a massive audience.

We will explore the prospects of advertising on Netflix. We’ll look at its challenges and its potential implications for the future of digital advertising. Netflix Ad-supported plans are available in the following countries: Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States.

Toast has years of experience crafting compelling TV advertising campaigns. We can deliver from script to screen if you want to advertise on Netflix.

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THE PREVAILING ADVERTISING LANDSCAPE

Digital advertising has undergone significant transformations in recent years. Traditional media, like television, now contend with online platforms like Prime Video for advertising. Social media giants like Instagram and YouTube have redefined how businesses and brands connect with their target audiences.

However, despite the popularity of these platforms, they have their limitations. Ad fatigue, ad blockers, and concerns about data privacy have made advertisers seek new avenues to reach consumers effectively. With its vast and dedicated user base, Netflix has emerged as a potential game-changer in this evolving advertising landscape.

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THE APPEAL OF ADVERTISING ON NETFLIX

1. A Captive Audience: Netflix boasts an enormous and diverse viewership base. Users spend hours immersed in their favourite shows. This captive audience provides a unique opportunity for advertisers.
2. Contextual Relevance: Netflix has extensive data on user preferences and viewing habits. Netflix can deliver highly targeted ads that align with users’ interests. This contextual relevance leads to higher engagement rates and better overall user experiences.
3. Global Reach: Netflix’s global presence extends to numerous countries, cultures, and languages. You can reach your target audience with unparalleled access to diverse audiences worldwide.

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POTENTIAL CHALLENGES AND CONCERNS

1. Netflix Subscribers Experience: Netflix’s success stems from its ad-free experience. Introducing ads could alienate users accustomed to ad-free viewing, potentially leading to a backlash. However, people are looking for savings. The cost of living crisis and inflation has squeezed household budgets. Netflix is offering a way of lowering bills.
2. Brand Fit: Advertisers must be careful about the production values in their adverts. Their adverts must fit with Netflix’s high quality output and not jar with the content.
3. Data Privacy: Using user data for advertising must be done responsibly and transparently, assuring users that their privacy is protected.
4. Competition with Other Platforms: With Netflix adopting advertising, it will face competition from other ad-supported streaming services. This expansion of advertising platforms provides more opportunities for advertisers.
   Advertising on Netflix has the potential to change the digital landscape. With a captive audience, contextual relevance, and a global reach, the platform offers unique opportunities for brands to connect with consumers. However, striking the right balance between maintaining the user experience and advertising efforts is crucial.

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INFORMATION ON NETFLIX ADVERTISING

From the Netflix website, we see the following:

How many ads show:

Netflix has an average of about 4 minutes of ads per hour. This advert length may vary depending on the title. You’ll see ads before and during select TV shows and movies. Newly released movies have ads before the title begins.
When an ad break starts, the number of ads in the ad break appears in the upper-right corner. Fast forward and skip aren’t available when an ad is playing.

What information Netflix collects:

After you sign up for or change to an ad-supported plan and choose your primary profile, we ask you for your date of birth and gender. We use basic demographic data and general location information. This demographic information is based on your IP address to help tailor the advertising and improve the product offering.
While the idea of ads on Netflix may raise concerns among some subscribers, if executed thoughtfully, it could open new revenue streams for the platform and be more cost-effective for viewers. As technology and consumer preferences evolve, advertisers must carefully weigh their options.

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WORKING WITH TOAST

If you're looking to build a following, boost sales or launch a new product advertising on Netflix is a great option. Get in touch with us using the form below, we can walk you through the process.

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