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Netflix knows it is in the early innings of the streaming advertising game, but it wants the ad world to know it isn’t a niche player.
During its virtual upfront presentation Wednesday afternoon, Netflix president of worldwide advertising Jeremi Gorman said that the nascent advertising tier of the service has nearly five million global monthly active users, with a median age of 34, six months after launch. The company says the ads member base has “more than doubled” since early this year. (Overall, Netflix’s global subscribers total is 232.5 million.)
Netflix has been mum on how many subscribers the ad tier has (previous reports have pegged it at about 1 million), but the monthly active users metric is a step in that direction.
And co-CEO Greg Peters noted that more than a quarter of signups in countries where the ad plan is available choose it, with levels of engagement similar to those of its ad-free tiers.
“The signals are promising: engagement on our ads plan is similar to our comparable non-ads plans,” Peters said. “That’s critical because it all starts and ends with consumers.”
Indeed, Netflix still dominates most streaming ratings charts, and the company says its users watch for longer than competitors as well.
“It’s why, despite all the competition out there, Netflix is the most popular streaming service today. To be the one to watch, you need everyone watching. And that’s what sets Netflix apart,” Peters said, in what sounded like a subtle dig at the upcoming Max service, which uses the tagline “The One to Watch.”
Peters cited the “Netflix Effect” in helping to push older songs to the top of the charts after they appear in Netflix shows, and in helping “niche sports become mainstream,” as footage from the Formula 1 docuseries Drive to Survive played.
And Netflix content chief Bela Bajaria said that the popularity of the service is because they are “super serving our audience – giving you something you will really love, that will really satisfy you.”
“To super-serve our members we have to focus on quality, with the understanding that quality, like beauty, is in the eye of the beholder,” she added.
On the product side, VP of global ad sales Peter Naylor unveiled new sponsorship opportunities, including the ability to sponsor the presentation of series at launch, and aligning sponsorships with holidays or brand moments (the company cited a collection of “sustainability stories,” for an advertisers looking to boost their eco credentials).
And a “Top 10” option will give advertisers guaranteed placement within the titles on Netflix’s top 10 lists, country by country.
Naylor also announced that beginning in Q4, clients would be able to use Nielsen Digital Ad Ratings to measure the reach of their campaigns. The company also announced a deal with the data firm EDO to measure engagement.
And executives promised further evolution on the ads front, with Gorman telling the audience that they plan on “innovating.”
“We treat our ads with the same care we treat our incredible content: serving them locally; seamlessly transitioning between shows and ads with no latency; and implementing industry-leading frequency caps with an ad load of four to five minutes per hour,” she said.
It was a comment echoed by co-CEO Ted Sarandos later on, noting that the company revolutionized streaming when it introduced House of Cards a decade ago, and that it was working on “similar breakthroughs in advertising” that “can be just as impactful.”
“You’ve heard a lot from us today, and I think it all boils down to one thing: Netflix is a little bit different,” Sarandos concluded with his comments. “In the past – when consumers had very little choice of where to watch – it didn’t matter so much which network a show or film landed on. They were all very similar. Today, we believe that having a title land on Netflix makes all the difference in the world.”
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