Netflix launched its ad-supported version of the platform last year, but now it's giving money back to the advertisers.
👉 Background: In November last year, Netflix launched its ad-supported version of the platform. That’s the version that has 4 to 5 minutes of ads per hour of movies and TV shows.
👉 What happened: Netflix gave these advertisers viewership guarantees. In other words, x number of people will see your ad. Except Netflix hasn’t been able to live up to its side of the bargain. Supposedly the ads have only gone to around 80% of the expected audience.
👉 What else: So now, Netflix Australia has literally started to give money back to the advertisers. And part of the reason may just be that Netflix didn’t set up itself up for success.
💡To build a successful ad-driven business, you need a strong advertising capability. The big business model shift from subscription to advertising ain’t easy to pull off.. Not even with Netflix’s resources.
💡Netflix hasn’t been set up on an ad-model - unlike Paramount+ and Disney+ that already has advertising sales experience through its other divisions.
💡 Despite partnering with Microsoft, Netflix also doesn't yet have the right tech infrastructure (i.e. proper ad targeting to give advertisers comfort on where the ad will appear).
So it seems like there is still a long way to go for the 'Flix on its ad-platform journey.
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