• by Karlene Lukovitz  @KLmarketdaily, August 28, 2023

Netflix, now pushing hard to accelerate the growth of its new advertising tier, has recruited its third top advertising executive from Snap in a year.

The latest addition is David Roter, who has been serving as vice president, global agency and brand partnerships at Snap.

Last August, Jeremi Gorman, then Snap’s chief business officer, joined Netflix as president, worldwide. Peter Naylor, Snap’s vice president, sales, accompanied her to Netflix, taking along the same title. Both have strong tech and entertainment credentials. Gorman had previously worked at Amazon and Yahoo; Naylor at Hulu and NBCUniversal.

Roter, who also worked under Gorman at Snap, was instrumental in kickstarting the revitalization of Snap’s advertising a few years ago, according to Business Insider, which originally reported his move to Netflix.

Roter’s background includes five years as senior director of global video sales and agency development at Twitter, and digital sales and strategy at ESPN. He joined Snap from The Players’ Tribune, where he spent two years as head of global revenue and partnerships.

As previously reported by MediaPost, Netflix is focused on attracting more advertising, particularly for shows beyond its top 10.

Although advertisers were eager for the opportunity to reach Netflix viewers for the first time, their spend has to date been restrained by the lack of scale of the ad tier.

Launched last November, the Basic with Ads plan, priced at $6.99 per month, had attracted about 5 million subscribers by May, according to Netflix.

While the company’s moves to crack down on account sharing starting as of May and elimination of its cheapest no-ads plan in June helped push up the tier’s active users to 10 million by August (Antenna data showed 23% of new U.S. subscribers in July choosing the ad-supported plan), that’s a small audience for advertisers, not to mention a drop in the bucket compared to Netflix’s total 232 million-plus global subscribers.

Netflix executives have said it is projecting that advertising will eventually generate about 10% of its total revenue.

In addition to beefing up its advertising team and forming an advertiser/agency advisory board, Netflix has cut its CPMs — initially set at far-above-market rates of $45 to $65 — to rates more in line with rival ad-supported services: about $39 to $45.

Netflix is also working on new ad formats, and restructured its two-year ad-tech agreement with Microsoft — which was reportedly frustrated with the ad-supported tier’s slower-than-expected ad sales growth, and so willing to let Netflix add other ad-tech partners in return for a reduced guarantee.