A year after Netflix launched its ad-supported tier, it has attracted 1.5 million customers, representing 2.5% of U.S. subscribers, but faces challenges competing with established AVOD platforms like Hulu. Despite successful test campaigns indicating mixed results for advertisers, Netflix is looking to enhance its offerings and may raise prices to boost the ad tier's profitability. Key considerations for advertisers include assessing campaign goals given Netflix's relatively small scale and evolving measurement capabilities.

1. Netflix Ad Tier
One Year Later,
How it Went &
How it's Going

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ALEX ROSSI
Director, Client Strategy &
Analytics

6. POLL
On a scale of 1-5, how much would you
say you know about Netflix’s ad
supported tier?
● 1 - I didn’t know they had an ad supported tier
● 2 - I know it exists, but not much else
● 3 - I know it exists, but it seems inaccessible
● 4 - I know a fair bit, but not an expert
● 5 - I’m an expert!

7. Netflix’s Capabilities -
Where They Started and
How It’s Going

8. Netflix By The (Ad Supported) Numbers
As of July 2023, Netflix reported
1.5M customers on their ad
supported tier (2.5% of US
Subscribers).
While the relative scale of Netflix is
low, 80% of impressions are served
to Connected TVs, rather than
mobile devices or desktops.
After Netflix axed its $9.99 Basic
plan, the ad tier is now $6.99 - $8.5
less expensive than the lowest tier
plan without ads.
With the actors strike coming to an
end, Netflix is looking to raise prices,
potentially to incentivize greater use
of the ad tier. (WSJ)
80%
1.5M $6.99

9. Netflix Is ~1.5% of All Ad Supported Subscriptions
● As a new entrant into the AVOD
space, Netflix is competing with
with a slate of native AVOD
platforms like Hulu, which has
had nearly two decades of
building its ad supported user
base.
● With nearly 70m subscribers in
the US, Netflix has the most
runway of the major US SVOD
services to grow their ad
supported tier.

10. High CPMs Lower CPMs
Limited Geo & Genre Targeting State, City, DMA, Genre, and
Language Targeting
Restricted Advertiser Categories Expanding Category Approvals
Probabilistic Measurement Probabilistic Measurement
Netflix’s Offerings Have Evolved Since Launch
Explore Private Marketplace
opportunities
Additional targeting opportunities
(mobile and daypart)
More sponsorship / unique
activation opportunities
New measurement solutions &
partnership with Nielsen One Ads
At Launch Currently Next Steps

11. Understanding Netflix
Performance: Limited
Measurement, Mixed
Results
Section header layout

12. RESULTS
Two clients ran test campaigns on
Netflix, of at least $50K total.
Tinuiti used a multivariate regression
model, ingesting daily impression
data from each client’s other
marketing activities to understand
the incremental impact of Netflix’s
ad tier.
CHALLENGE
● Client 1 has a female focused, high HHI target demographic and
ran a 2-week long campaign on Netflix..
● Client 1 saw significant success through Netflix’s ad tier, with
CPAs 72% more efficient than the average of other OTT
networks running at the same time.
● By the end of the campaign, Netflix accounted for 12%
acquisition volume.
OUTCOME SUMMARY - CLIENT 1
One client saw
CPAs 72% more
efficient than
typical OTT
metrics
Another client’s
CPAs improved
21% over the flight
72%
-21%
Netflix Performance Shows Mixed
Results
CASE STUDIES
● Client two has a lower HHI, generally younger demographic
(50M/50F), and ran a 10-week flight on Netflix (totaling about
5m impressions).
● Client 2 has a high baseline level of aided awareness (88%) -
over the course of the Netflix campaign, we saw a 2%
increase in aided awareness via YouGov survey data.
● Client 2 invested in Netflix aware that CPAs could be higher
due to high CPMs . CPAs were more in line with sponsorships
the client had previously invested in,: 8x more than typical OTT
networks. However, Netflix CPAs improved 21% over the
course of the flight, showing that the approach began to
resonate.
OUTCOME SUMMARY - CLIENT 2

13. So What’s Next?
Section header layout

14. Key Takeaways ● Consider scale first - as Netflix’s scale is still
relatively small, advertisers should think
critically about a campaign’s goals before
investing (reach & frequency are less
achievable), and keep an eye on the ad tier’s
growth.
● Offerings are evolving, but measurement is
not set in stone - while Netflix has made
significant progress in terms of capabilities,
measurement is still a work in progress.
● Invest with mixed results in mind - with mixed
DR results, Netflix is an opportunity that
should be on all advertisers’ radars. At the
moment, smaller campaigns may drive more
efficient CPAs, while larger budgets may be
more suited for awareness plays as the ad tier
grows.

15. Q&A
ALEX ROSSI
Director, Client Strategy &
Analytics

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