About the release
Currently available for only $6.99 a month, Netflix Basic with Ads offers nearly all the same features as its Basic plan, although subscribers are unable to download any videos to watch offline, and a few shows and movies are unavailable due to licensing restrictions. Netflix anticipates that within a year, the ad-supported tier will bring in close to 40 million unique viewers. However, in addition to gaining new subscribers, some experts speculate that Netflix could lose higher-paying subscribers who might “trade down” to the lower tier as they adjust their budgets to the rising cost of living.
To advertise, or not to advertise, that is the question
Since this is Netflix’s first time offering an ad-supported tier, the platform doesn’t have any solid data it can present to advertisers regarding ad performance. So for those unsure about whether or not they should advertise on Netflix, it might be best to wait until next year. As Kevin Krim, president and CEO of EDO, a marketing analytics company, recently shared:
“Advertisers will be paying a high premium to advertise on Netflix — with uncertain results. The platform reportedly won’t have third-party measurement until at least early 2023. The stakes are high. Netflix knows that to create a sustainable ad-supported tier, those ads have to perform based on the outcomes marketers need to generate.”
Netflix’s current advertising options are simple, with 15 and 30-second ad spots available that can be featured pre and mid-stream. However, despite the uncertainties, many global brands are eager to partner with the streaming giant, which has shared that it is now working with companies such as L’Oreal Paris and AB InBev.