Netflix Ad Option Has 'Positive Momentum' Two Years In

Two years into its highly scrutinized streaming advertising option, Netflix says its global ad-supported platform -- in 12 countries -- has reached 70 million monthly active users.

Currently, the premium video streaming platform sees 50% of its new subscribers in those markets signing on to the new ad-supported option.

“We continue to see positive momentum and growth across all areas of the business,” said Amy Reinhard, president of advertising for Netflix, in a release on Tuesday.

This past upfront TV advertising market, Netflix had revenue gains up more than 150% above 2023 and saw increases across all ad categories.

For all of 2024, Wall Street media analysts estimate Netflix’s U.S. ad revenue will surpass $1 billion. Projections for 2027 estimate ad revenue will grow to near $4 billion.

In the summer of 2024, Netflix's cost-per-thousand viewer (CPM) prices for marketers sank to between $20 and $30 from around $39 to $45 in the same period a year before, according to media agency executives.

advertisement

advertisement

At its ad-supported launch in November 2022, Netflix's initial CPM pricing was as high as $65. Some analysts expect Netflix’s pricing will rise with growth of the advertising-supported service.

“The solution is to ramp up the coverage of the Netflix ad-supported service so it is at least the size of a single broadcast TV network in average minute ratings,” said Ed Papazian, president of Media Dynamics, in the MediaPost comment section recently.

“To do that they will have to get to a minimum of 40 million to 45 million [ad-supported] subscriber homes in which case their higher viewing levels and more uniform demos by age, income, etc. will be at play and they can ask for higher CPMs,” Papazian added.

Late in 2023, and for most of this year, there has been softness in the broader legacy TV and streaming video marketplace -- especially in this past summer’s TV upfront advertising market.

In January, Amazon added to the problem with the introduction of its own ad-supported option for its Prime Video service, which added significant inventory.

Next month, the streaming platform will air two live NFL Christmas Day games. Netflix says that for both contests, in-game inventory is completely sold out. Marketers that have signed on include FanDuel, Verizon among others.

For the NFL games, Netflix has partnered with Nielsen for live ratings -- and to gain better accuracy for that content, Netflix collaborated with Nielsen, offering up its first-party streaming data.

In other programming, its drama TV series "Squid Game" will see multiple advertisers across 12 ad-supported countries for its upcoming season.

In South Korea, Kia Motors will be Netflix’s first single title sponsor of the program. The deal is timed to coincide with the launch of Kia’s new crossover SUV ‘The New Sportage.’

Starting in January with the launch of “WWE Raw” and other live WWE programming to come, Netflix’s partnership with VideoAmp in the U.S. will begin. It will offer cross-screen and live viewership measurement. Netflix says its first party data will work with VideoAmp in partnership with Snowflake’s clean room platform.

Next month, in the U.S, the streaming giant will expand advertising programmatic buying with The Trade Desk and Google’s DV 360 in the U.S. and Latin America. It will begin testing in-house advertising technology in Canada.

Next story loading loading..