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Netflix Ads The Game Changer in Video Ads – Who Needs YouTube.pptx (Chester Yang)
- 1. Netflix Ads: The Game Changer in Video Ads – Who Needs YouTube? Chester Yang Diginius
- 2. Over 35 million of Netflix’s subscribers will be using the ad-supported tier worldwide by 2027. Microsoft acquired Xandr from AT&T December 2021 July 2022 November 2022 Microsoft won exclusive rights to Netflix’s advertising Netflix launched ad- supported plan January 2023 Netflix reached 15 million global monthly active users November 2023 February 2024 Netflix ad plan reached 23 million global monthly active users Microsoft Advertising launched Closed Alpha for Netflix Video Ads ADVERTISING DEVELOPMENT
- 3. IN THE NEWS… Netflix share price: March 2023-2024
- 4. 12 Launch Countries Canada United States Mexico Brazil France Germany Italy Spain United Kingdom Japan South Korea Australia
- 5. £15.99 Standard with Ads Standard Premium Monthly price Video quality Resolution Watch on your TV, computer, mobile and tablet Download £10.99 £4.99 Great Great Best 1080p 1080p 4k +HDR The ad-supported plan is bringing Netflix to more people with 1 in 3 new sign-ups choosing the ad- supported plan in September 2023. SUBSCRIPTION TIERS
- 6. AD FORMATS Easily advertise on Netflix premium series and films without minimum spend commitments.
- 7. Deals Each deal selected will determine aspects, such as price, targeting, and geo. For example, this deal allows advertisers to: • Target Netflix inventory with a 30 seconds ad • Target the United States • Pay a minimum of $60.48 CPM • Use genre targeting • No audience, device, age or gender targeting is supported
- 8. Reporting Reporting metrics are available within the Microsoft Advertising interface.
- 9. Bumper Outstream In- feed Skippable/ non-skippable in-stream While YouTube offers a variety of ad formats, the average YouTube Ads view rate is only 31.9%. AD FORMATS
- 10. SUBSCRIBER NUMBERS Netflix is the most used on-demand streaming service. 59% 45% 25% 7% 7% % of households subscribing
- 11. Netflix reaches more viewers who are watching for longer. ENGAGEMENT AND REACH Source: Nielsen Streaming Platform Ratings, P2+ Reach using a 1 min and 2 hour qualified. Jan 2023. SVOD services only, excludes DMVPD
- 12. 18% 61% 37% 50+ 18 - 49 18 - 34 25% 75% 45% 50+ 18 - 49 18 - 34 Demographics 52% Women 43% Men 46% Women 54% Men
- 13. 12% 87% 1% Desktop Mobile TV 11% 18% 71% Desktop Mobile TV Viewing Habits Average time spent on YouTube is 19 mins per day. Average time spent on Netflix is 3.2 hrs per day.
- 14. Most countries GA • Videos length varies on format. • Ads must meet editorial standards. • Skippable • In-feed • Bumper • Non- skippable • Masthead MSFT Ads Plat. US, CA, BR, MX, UK, FR, IT, DE, ES, AU Closed Alpha 10, 15, 20, 30 and 60 second videos. Only excellent quality ads. No QR codes. • Non- skippable • Pre-roll • Mid-roll • Frequency capped Buying channel YOUTUBE VS NETFLIX Markets Status Video Ad Formats
- 15. THANK YOU!
Editor's Notes
- The partnership between Microsoft Advertising and Netflix began with the Xandr acquisition back in 2021. Through the acquisition of Xandr, Microsoft secured the exclusive rights to Netflix’s advertising. In 2022, Netflix launched the ad-supported plan and started the password sharing crack-down. Since then, we’ve seen a large increase in the number of users opting in for the ad-supported tier on Netflix. In 2023, Netflix ad plan reached 23 million global monthly active users. When the Netflix ads first became available, it was released to advertisers with a minimum of $10 million budgets to purchase the premium inventory on Netflix. In February 2024, Microsoft Advertising launched the closed alpha for Netflix ads within Microsoft Advertising platform and provide advertisers a chance to tap into the Netflix inventory with no minimum spend requirement.
- Recently, Netflix has been making headlines with its strategic moves to increase its subscriber base and revenue. One of the key strategies Netflix implemented was a crackdown on password sharing. This move was aimed at boosting subscribers and stirred up a wave of subscription revenue. The crackdown led to an estimated 22 million people signing up for the service. As a result of these strategic moves, Netflix’s stock price has seen a significant rise. The introduction of the ad-supported tier and the crackdown on password sharing led to nearly 30 million subscriber additions in FY23. Netflix’s ad-supported tier reached 15 million global monthly active users one year after its launch. Netflix announced that 40% of new sign-ups were opting for the ad-supported plan. The new tier is expected to provide more volume and pricing power in an improving ad market. Netflix named Microsoft as the exclusive technology and sales partner to help power their first ad-supported tier. This partnership is providing an ad-supported model that will empower more people around the globe to access the entertainment they love. Microsoft Advertising has been working collaboratively with Netflix and advertisers to offer a variety of formats and experiences to reach highly engaged audiences.
- Currently, Netflix ads are launched in 12 countries in the world which provides advertisers with a unique opportunity to reach premium audiences.
- The Standard with Ads tier plan is significantly cheaper than the standard plan. Only difference is that users are not able to download the shows/movies to stream offline. The introduction of the Ad tier plan has pushed a lot of the users who were sharing their family or friend’s account to subscribe to in order to continue using the service.
- Netflix deals within the Microsoft Advertising platform comes in the below formats. The video ads that show across TV, mobile, desktop and tablet are Non-skippable, pre-roll, mid-roll with a frequency cap. The frequency cap is automatically set to 3 impressions per day, 14 impressions per week, 40 impressions per month.
- To select the deal, advertisers can use filters on the top to select the targeting options that are best suited to their goals. Advertisers can select targeting options utilising the Netflix Audience segmentations such as: RON (Run of Network): your ad can appear during anything offered on Netflix, as long as the viewer targeting matches. Top 10: your ad will appear in any of the top 10s: Top 10 region shows, top 10 comedies, top 10 dramas, etc. Genre: Your ad will appear in certain genres of your choosing, which you choose during campaign creation. The bidding strategy is available for the CPM model. Depending on the deal you select, you pay a minimum CPM to run ads. The minimum CPM by deal is also the minimum budget that you’d need to have for the campaign. For example, if you select the deal to advertise a 30 second video using genre targeting in the US, you pay a minimum of $60 CPM. The level of control that advertisers have is determined by the deal selected, some will give less control than others. For example, some deals may only be available for targeting certain countries with a fixed minimum bid, and no control over device targeting or frequency capping.
- Reporting for the Netflix Ads performance will also be available within the Microsoft Advertising platform with metrics such as impressions, spend, avg. CPV, avg. CPM, video views percentages and video completion rate, etc to help you measure the success.
- Advertisers can choose from a variety of ad formats, including Skippable, Non-Skippable Ads, Bumper Ads and Outstream Ads. YouTube also provides comprehensive analytics that provides valuable insights into ad performance, allowing advertisers to refine strategies and optimise return on investment.
- When comparing the subscriber numbers for on-demand streaming services. Netflix is the most used streaming service in the household accounting for 59% subscribing to their service. While Prime Video in second with 45% and Disney Plus with 25%.
- When we look at the analysis for viewer retention at 2 hours. We can see that Netflix’s audiences are engaged with long-form content and have a high engagement after 2 hours. While YouTube audiences have a lower retention rate after 2 hours. When comparing the total reach with 1 minute qualifier, Netflix also has a higher audience reach compared to YouTube and other streaming services.
- While Netflix has over 23 million active monthly ad tier users, YouTube has about 4 billion monthly active users. As for the age demographic, most of Netflix’s audience are aged 18 - 49 while the largest age group for YouTube is 25 – 34.
- When comparing the user engagement, Netflix audiences spends 3.2 hours per day streaming and YouTube audience spends only 19 minutes on the platform per day. The key difference here is also based on the device used for viewing habits. 71% of Netflix audiences watch on TV and Most of YouTube’s audience watches on mobile.
- Netflix: Pros: Brand awareness: Netflix allows advertisers to build brand awareness with entirely new audiences that are highly engaged. Limited Ads: Currently, there are limited inventory on Netflix ads placements which could potentially lead to higher viewer engagement. Cons: Limited Control: While you can select the deals available within Netflix inventory, some selection provides less control than others. YouTube: Pros: Reach: YouTube is the second most-visited website globally, providing a worldwide market of potential customers. Audience Targeting & Ad Formats: YouTube has a vast variety of targeting options and ad formats that advertisers can pick from. Cons: Younge Audience Group: YouTube’s audience is mostly younger generations with limited purchasing power. Competition: YouTube has a high level of competition, with numerous businesses vying for ad space. Algorithm Changes: Changes in YouTube’s algorithm can affect the visibility and reach of ads.