Netflix With Ads: Here’s What We Know So Far

by | Jan 11, 2023 | Industry Insights

TV remote tuning into Netflix

Over the past decade, Netflix has been at the forefront of the streaming revolution, most notably for its perk trifecta of full-season TV drops, binge-worthy original series, and ad-free access to 17k+ titles—and counting.

But a new age is on the horizon for the streaming giant—one that’s both redefining the user experience and piquing the attention of eager digital marketers.

With the launch of its first-ever ad-supported model, Netflix is making monumental moves in the OTT space that advertisers have long been waiting for. If media buying with Netflix is on the books for 2023, here’s what you need to know about adding this new marketing channel to your digital advertising strategy.

Netflix Announces Its Plan to Win Advertisers

In April 2022, Netflix executives announced what they had in store for the OTT provider’s near future: new, low-priced ad-supported tiers. Sending shock waves across the media, Netflix’s revamped business plans have since been subject to mixed feelings from both devoted long-term subscribers and curious digital advertisers.

It’s no secret that co-CEO Reed Hastings has always remained adamant about keeping Netflix ad-free. At first glance, ad-free, on-demand streaming has long been the platform’s main competitive edge in today’s land of CTV viewing. But poor Q1 results and a loss of subscribers for the first time in 10+ years have warranted a second look at Netflix’s historical business model—much to the modern advertisers’ advantage.

In July, talks of an ad-supported Netflix hinted at an early 2023 launch. But sooner came faster than expected, with Netflix officially rolling out its new business model in partnership with Microsoft in November 2022.

As Netflix with ads debuts in 12 countries, digital marketers worldwide are still jumping to know the full logistics.

Introducing the New Ad-supported Tier

On November 3rd, Netflix’s Basic With Ads plan officially hit the market, months ahead of its pre-planned release.

Priced at $6.99—30% cheaper than the regular ad-free Basic plan—the new tier features non-skippable commercials averaging four to five minutes per one hour of programming. Advertising opportunities are available in 15- and 30-second increments for pre-roll commercials and those shown throughout the program.

Despite the pre-launch skepticism from some, a promising streaming front may very well be on the horizon for more than just the streaming giant. According to one Hub Entertainment Research study, 57% of U.S. consumers prefer watching ads and paying $4-$5 less for a streaming service versus paying for an ad-free plan with a heftier price tag. What’s more—46% of current Netflix subscribers consider switching to the new Basic With Ads option to save a few extra coins on streaming services each month.

While Netflix pads its revenue and subscribers save on binge-watching this week’s top-rated original, opportunities may also be available for two more parties in the mix: digital advertisers and their clients.

The Logistics of Ad Buying

At launch, Netflix with ads has seen overwhelming interest from marketers and ad-buying agencies worldwide. In fact, according to Netflix’s president of worldwide advertising, Jeremi Gorman, the OTT provider nearly sold out of its ad inventory in time for launch.

Pricing for Netflix ads is a bit more aggressive than other OTT services like Hulu, Amazon, and even Disney+, with a CPM of around $55. However, this price tag is considerably less than what the over-the-top streaming provider first projected at its launch—CPMs in the range of $65-$80.

Targeting & Measuring Capabilities

As of now, Netflix is mostly pitching advertisers on the ability to target ads by country, genre, and the platform’s daily ranking of its top 10 programs. Currently, there is no available third-party segmentation or first-party retargeting. Despite this targeting shortfall, future plans for the ad-supported tier are continuously developing, and Netflix executives have noted a particular interest in adding more specific targeting parameters, such as:

  • Age
  • Gender
  • Time of day
  • Content rating

Similarly, measurement and reporting capabilities for Netflix ads are currently limited. Because the platform does not offer any attribution for its ad buys, there’s little ability to measure the impact of in-platform ads. Within its current model, Netflix ad purchases are only tracking one KPI: impressions.

Fortunately, Netflix plans to work with Integral Ad Science and DoubleVerify in Q1 of 2023 to verify traffic and ad impressions. Sometime in 2023, advertisers will also be able to measure their audiences more closely with the Digital Ad Ratings product—afforded by a coming Netflix and Nielsen partnership.

Keeping Up With Industry Standards

With the streaming wars raging, it was only a matter of time before Netflix hopped on the ad train to maintain its long-standing rank as a CTV leader. OTT ads are the new industry standard, and a glimpse at Hulu, Amazon, and Peacock’s successes with ad-supported tiers only solidifies that sentiment.

From a business perspective, an advertising-based video-on-demand (AVOD) model is a brilliant move. In addition to bringing in revenue from regular subscription fees, OTT platforms like Hulu and Amazon also cash in on a paycheck from the digital marketer.

From a marketing perspective, performance TV advertising is the future. Aside from being able to advertise to cord-cutting viewers, ad buying with over-the-top streaming services allows digital marketers to:

  • Access a highly engaged audience
  • More precisely target their ads
  • Obtain more granular data in real-time
  • Provide more ad interactivity

But from Netflix’s perspective, joining the television advertising wave was just another way of keeping its relevancy and success in an ever-adapting market.

Netflix Advertising: A Must or Bust?

Netflix projects nearly 40m ad-tier subscribers by the end of 2023. If these expectations come close enough to fruition, digital marketers have the potential to reach their target audience on a massive scale.

As of December 2022, however, the streaming giant has reported a slower-than-anticipated start for Basic With Ads, with data from Antenna revealing it to be Netflix’s least popular plan—accounting for just 9% of subscribers. But the ad-supported option and its programming are still relatively new. Refinements are inevitable and to be expected as time goes on and opportunities to access richer data become readily available.

Because of the slow start, hesitant advertisers are still weighing the pros and cons of ad buying.

While the OTT platform does allow marketers to build brand awareness with entirely new audiences, ad buying with Netflix is limited and more costly than with other providers, and its lack of measurement renders slim trackable results.

However, Netflix does remain in the top numbers in the OTT industry. Its sheer popularity can bring undeniable benefits to a brand looking to reach more viewers, especially when ads are placed alongside top-charting shows.

There are perks and drawbacks to Netflix’s OTT ad-buying opportunities, and as a result, there’s no one-size-fits-all approach to including Netflix in your strategy.

For some, Netflix is a fit when aiming to build brand awareness on a world-renowned platform over an extended period. For others, there are just not enough data-backed developments that have been made to justify funneling a large chunk of an advertising budget into the new plan.

Time will tell the potential of the new ad-supported Netflix. But for now, the digital advertising industry will be watching the streaming giant’s moves—and successes—closely.

Digital Remedy Is Your OTT Marketing Provider

At Digital Remedy, we help our clients keep updated with the latest OTT advertising industry developments so they can stay ahead of ad tech trends—and their competition.

In July 2022, Microsoft was named Netflix’s technology and sales partner to help power its first ad-supported subscription offering. Microsoft recently acquired Xandr, making our DSP for CTV execution the exclusive programmatic partner for Netflix inventory.

As Netflix works out its initial kinks (including notoriously high minimums and minimal available inventory), we are monitoring for updates regarding a more programmatic-friendly buying option.

In the meantime, our team can help you reach other big-name streaming audiences that are just as engaged and ready to get to know your brand.

No matter your digital marketing needs, we’ll work with you to determine the most profitable media buying opportunities that make sense for your business. We bring media buying excellence and unmatched customer service to the table with our fully-managed platforms, AdReady and Flip, helping to eliminate any complexities of executing your performance marketing ideas.

Speak with a member of our team to learn more about over-the-top streaming trends and how you can take part in optimizing your campaigns with connected TV marketing.

Mike Seiman

Mike Seiman, CEO & Chairman, is the founder of Digital Remedy, a digital media solutions company leading the tech enabled marketing space he co-founded while still a college student at Hofstra University in the early 2000s. The company has grown quickly and is now a major player within the crowded digital advertising landscape. The rapid growth of Digital Remedy, formerly CPXi led to its inclusion on Inc. Magazine’s list of fastest growing privately held advertising/marketing companies in 2008, 2009, 2010 and 2014. Mike was selected as a semi-finalist in Ernst & Young’s Entrepreneur of the Year initiative in 2010 and 2013 and as a finalist in 2009 and 2014. In his free time, Mike serves on the Board of Trustees of his alma mater, Hofstra University. He also focuses on numerous philanthropic initiatives including sitting on the boards of the H.E.S. (Hebrew Educational Society non-profit community center) and Children International, where he spearheaded the development of community centers in both Guayaquil, Ecuador in 2010 and Barranquilla, Colombia in 2014.

David Zapletal

Before graduating in 2005 with degrees in Retail and Consumer Science (with an emphasis in eCommerce) and a Minor in Public Business Administration at the University of Arizona, David Zapletal had already successfully grown a start up ad network from serving an initial 1 million impressions per day to over 10 million impressions per day. It was his deep understanding of internet advertising during the industry’s beginning stages that led him to another start up at the time, CPXi. More than 8 years that have passed and Zapletal currently serves as Chief Operating Officer for Digital Remedy. In that role he continues to help grow and implement optimization tactics across various ad serving platforms, oversee daily operations of the account management and trafficking groups and maximizes ROI for Direct Response advertisers as well as for Publishers. Outside of Digital Remedy, Zapletal commits his efforts to an organization called Camp Dream Street, a camping program for children with disabilities, where he serves on the Board of Directors.

Jeff Reitzen

Jeff has worked in multiple facets of the online industry, from sales to operations as well as consumer engagement, content analytics and most recently in data optimization. His career began as a wedding, bar mitzvah, and Sweet 16 DJ where he learned the delicate balance of crowd energy management. Quickly, this skill made him incredibly successful in managing online sales for Geico. He joined CPXi at its startup stage as employee number 4 and has been a key driver of continued growth. His unique knowledge of what converts in the digital ad space, the application of data, and how to optimize platforms for efficiency continues to be invaluable to Digital Remedy clients. Today, Jeff is responsible for innovating and optimizing all Digital Remedy offerings including platforms, systems, tools, and internal processes—ensuring the organization remains on the precipice of the marketplace.

Mike Juhas

Mike Juhas, has over 13+ years of experience in ad tech client services, working with brands, agencies, and publishers ranging from top 10 advertisers to small regional organizations, to rep firms, holding companies and independent shops. An integral member of the Digital Remedy team, Juhas leads all client relationships, including facilitating onboarding and integration, establishing relationship protocols, overseeing Quarterly Business Reviews and status meetings, navigating financial coordination, and overseeing 24/7 team support. His specialties include consultative services, planning strategy, and account management disciplines. Juhas lives in New Canaan, CT with his wife and two daughters, and their dog, Perry–the unofficial company mascot.

TJ Sullivan

TJ Sullivan has over 20 years of media sales and leadership experience. His knowledge of the digital media landscape, ability to develop strategic solutions that solve brand challenges, and talent for motivating sales teams, have made him a vital member of several media and ad tech organizations. Before joining Digital Remedy, Sullivan was VP, Connections at iHeart Media, a cross-divisional group that enabled national advertisers to seamlessly work with multiple iHeart business units; CRO of Reelcontent, a video distribution company for brands; SVP of sales at AdoTube, a video ad network; and was Co-Founder and SVP of video measurement company, OpenSlate—for which he is still an advisor.

Sullivan had served as the President of 212, New York’s Interactive Advertising Club, and currently advises many early stage start-ups in the programmatic and video space. Notably, RUN (sold to Publicis in 2014), Futures Media, Transmit.Live, and Kubient.

Outside of his work in the media industry, Sullivan sits on the Board of St. Elizabeth School in Wyckoff, New Jersey and the Advancement Committee of St. Peter’s Prep in Jersey City, New Jersey. He resides in New Jersey with his wife and four children.

IP Zone: Leverage the relationship between users and the location of their IP addresses in a cookie-free, safe and scalable way.

Behavioral: Combine first party with network analytics and enormous scale to define custom audience channels that are optimized to sites with high brand engagement.

Demographic: Reach the right audience based on demographic characteristics such as age, gender and income.

Mobile Device: Target users by mobile device type (Smartphone, tablet, etc.), carrier and operating system.

Geo-Location: Target your audience residential cluster, proximity to retail locations, campaign level DMAs and more.

Contextual: Place a relevant ad in front of a user who is reading content that contains specific terms.

Buying Power and Quality

Let’s be honest. Your ad ops are limited by your access to only a handful of channels and DSPs. You want more reach and better prices, but don’t want to sacrifice quality in order to achieve those goals. Digital Remedy has access to a vast multitude of channels based on relationships we’ve cultivated over nearly 20 years in business. That means we get the best prices, have personal relationships, and don’t get sent to voicemail when we call.

It also means that we can execute omni-channel ad ops for better prices than an internal team, while ensuring the quality is up to industry standards. On top of access to all sorts of specific audiences we’re able to to leverage first- and third-party data across all your campaigns and pivot across platforms based on results. Any campaign, any budget, any platform, any audience. Digital Remedy backed by AdReady is restriction free ad ops….and what could be better than that?

Resources, Time, and Overhead

When was the last time you enjoyed balancing budgets, reading resumes, dealing with aggressive sales teams, or wasting years of time for small gains in performance. By partnering with Digital Remedy you get the full support of $30m in OPEX including marketing teams, sales teams, and a dedicated 24/7 ad operations team. No hiring new employees for media optimization, business development, or account management. No months of training and on-boarding. No long meetings crafting sales materials. Just your team focused on making deals, and our teams and tech focused on supporting and executing those deals in a tech-enabled, digital ecosystem designed to get the most out of any KPI.

Reporting and Support

How nice would it be to have all of your data and insights in one location. We don’t mean an excel sheet sent out once a week with complicated charts, or an XML file with pages and pages and pages of tables (what is this, 2003?). We mean a fully customizable dashboard reporting in real time, or as real time as possible. You get to decide the how, what, and when of the reporting you’re seeing. And that’s ALL of the how, what, and when’s. If you want to see breakouts of all of the individual campaigns in your system, done. If you want broad scope comparisons of all of the campaigns in the last year, done. If you want to see CTR’s for specific audiences and compare them to CPM for your best performing advertiser but limit the scope to campaigns greater than 30k, done. All of this is at your fingertips with the AdReady Dashboard, all in one place.

Jessica Cortapasso

With more than a decade of experience in human capital management, Jessica Cortapasso serves as SVP, People at Digital Remedy. After graduating from Muhlenberg College, she quickly recognized her passion for people and entered the workforce in Human Resources where she gained expertise in employee relations, designing strategic benefit plans, and the development, implementation, and curation of corporate engagement initiatives for big-name brands and small companies alike. Becoming a member of the Digital Remedy family in 2013 while simultaneously acquiring her Masters Degree in Human Resources Management and Development from New York University, Jessica has steered company culture through significant events ranging from acquisitions and a rebranding, to the development and application of our Core Values that shape our daily business practices. Cortapasso resides in Brooklyn, plays competitive volleyball, and loves spending time with her nieces.

Erez Feld

Responsible for the financial and legal practices of Digital Remedy, Erez brings 22 years of experience in precision financial analysis, growth management practices, strategic acquisition, and investment leadership. A graduate of Hofstra University, Erez began his career modeling for corporate finance, and expanded his accounting prowess in the real estate sector. Erez joined Digital Remedy in 2008 as a senior accountant, and helped to create and build an accounting department that could support the rapid growth of the company and aligned with those needs. Over the past 12 years he has evolved through various positions at the company within the finance discipline, supervising and mentoring additional finance personnel, while growing under the tutelage of Michael Fleischman, former CFO of Digital Remedy. Today, he leads the Finance Department by supporting high-level projects such as acquisitions and restructuring, and is responsible for overseeing all financial assets, establishing financial procedures, controls, and reporting systems.

Michael Fleischman

After a successful career as an accomplished Fortune 500 financial professional leading Corporate Finance and Strategic Planning at Cablevision Systems Corporation and its programming subsidiary Rainbow Media Holdings, Michael currently plays a role in the overall management of Digital Remedy including direct responsibility for all financial-related activities including accounting, financial planning, M&A, legal, insurance, real estate and banking relationships. Michael brings more than 25 years of media experience at Cablevision and Rainbow Media and during his career was instrumental in the launching and managing of a number of cable television networks including 10 Regional Sports Networks across the US, American Movie Classics, Bravo, and the Independent film channel as well as the structuring of corporate partnerships with companies including Liberty Media, NBC, Fox/NewsCorp and MGM. Additionally, he was the finance lead on a number of professional sports team acquisitions including Madison Square Garden, the successful IPO of Cablevision and a tracking stock at Rainbow Media.Michael was involved in the creation and launch of Rainbow Advertising Sales which was one of the Cable Industry’s first Local Advertising Sales Divisions.

Tony Pascal

With over two decades of experience in the design, product, and technology space, Tony joined Digital Remedy as a graphic designer in 2007. His responsibilities quickly expanded, landing him in leadership roles across multiple disciplines including creative direction, analytics, monetization optimization, and management of platform development. He continued to grow with the organization over the last fourteen years, overseeing all design, development, and execution of Digital Remedy products and platforms. In his current role as SVP, Product & Technology, Tony leads product and technology development for the company and acts as the go-to liaison across teams, ensuring alignment on all aspects of internal and client-facing technology initiatives.

Prior to Digital Remedy, Tony built and ran his own direct response company from 2002-2007 after graduating from New York Institute of Technology, where he learned the fundamentals of digital advertising and optimization strategies that still remain relevant today.

In a previous life, Tony was a ski instructor and still remains an avid skier today. When he is not leading product development, he can be found working on old cars, rock climbing and hitting the slopes.

Gayle Meyers

Gayle Meyers is an entrepreneur, venture partner, investor, and operating resource in the digital media and marketing industry, with over two decades of executive leadership experience. After launching a management consulting firm, Growthing which is focused on optimizing growth strategies for executive leaders and their organizations, Meyers has frequently been tapped for high-profile consulting and advisory positions to help marketing technology companies enhance their in-market presence.

“Gayle is widely recognized as a leading strategist with years of expertise in the ad tech space,” said Mike Seiman, Chairman and CEO of Digital Remedy. “Her career in discovering and integrating game-changing technologies in the marketing industry will serve as an invaluable resource as we continue to enhance our product suite in the months ahead.”

With expertise spanning multiple disciplines, Meyers frequently serves as a keynote speaker at industry conferences for companies such as Google, Verizon, Omnicom, LiveRamp, LinkedIn, Twitter, and Oracle. A list of her notable past clients who have benefitted from her unique insights to increase shareholder value includes Tinuiti (acquired by New Mountain Capital), Adometry (acquired by Google), MediaForge (acquired by Rakuten), Integral Ad Science (acquired by Vista Equity Partners), and Tapad (acquired by Telenor).

Matt Sotebeer

With 14+ years of experience in ad tech and emerging technologies, Matt Sotebeer brings an uniquely innovative approach in his role as Chief Strategy Officer at Digital Remedy. As CSO, Matt focuses on the intersection between the product, product marketing, tech, data, and sales teams, while fostering productive cross-functional company-wide relationships to inform and influence sales, educate clients, and optimize company performance.

Matt has an extensive knowledge in the integration of data science, creative, and media solutions to drive sustainable growth for companies, with a focus on designing customized, scalable solutions leveraging machine learning alongside human intelligence. Throughout the tenure of his career, he has successfully managed global teams aligned to common goals, encouraged collaborative problem solving, and supported talent growth for entrepreneurial companies including MiQ, Rocket Fuel, and Audience Science.

Jeremy Haft

A proven strategic, revenue, and team leader with over 20 years of experience managing and scaling revenue in the competitive ad tech landscape, Jeremy serves as Chief Revenue Officer at Digital Remedy.

Before joining the team in October 2022, he served as CRO at Channel Factory, where he reorganized the revenue team for sustainable growth and increased the sales team by 3x to drive predictable and more accountable revenue. Prior to that, he served in a decade of leadership positions. Most notably, as SVP of Sales at Amobee and as VP of North America Sales at Viant/Adelphic. At both organizations, Jeremy successfully built and scaled platform and business solutions from their infancy to achieve the desired corporate goals.

Jeremy graduated from The University of Vermont and currently resides in New Jersey with his wife and two children. In his spare time, he enjoys traveling to tropical locations, dining out, cooking feasts with friends, and any new fitness trend he can get his hands on.

Randall Rothenberg

Randall Rothenberg has been a prominent leader in marketing, media, and advertising for 40 years. Most recently, he led the transformation of the IAB into one of the largest and most potent media and marketing trade bodies in the world, helping to develop technical standards, self-regulation, government regulation, market and consumer research, global digital content marketplaces, and professional development programs. Under his leadership, IAB opened the industry’s first major public policy office in Washington, D.C., launched the IAB Tech Lab to oversee digital marketing technical standards, started an industry-leading training program that has certified more than 14,000 digital media sales professionals, created the IAB Digital Newfronts and Podcast Upfronts, and published comprehensive research on brand disruption, the evolution of video, and the economic impact of the ad-supported Internet ecosystem. During Rothenberg’s 14 years as CEO, IAB quadrupled its association membership and quintupled revenue.

Randall has served on numerous nonprofit and commercial boards, including the Ad Council, the Columbia Journalism Review, the Advertising Self-Regulatory Council, the Chamber of Progress, the International Center of Photography, and the Executive Advisory Board of EDO, Inc. He is a magna cum laude graduate of Princeton University with an A.B. in the classics.

He is also an avid nature, urban, and portrait photographer—and Jazz guitarist.

Martin Kristiseter

Martin Kristiseter is an accomplished entrepreneur and digital executive with over 18 years of experience in digital media, ad technology, and programmatic solutions. He currently serves as the Managing Director of Compulse, a marketing technology and managed services company built for local media and agencies.

Prior to Compulse, Krisitiseter launched the digital advertising business at Marketron that transformed a declining revenue management & radio traffic business (SaaS) into a growth company through Pitch — an omni-channel workflow, sales enablement, fulfillment, and reporting platform for media companies.

He is a graduate of the University of Colorado, where he earned a BA and MBA in Finance.

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