Netflix Gives Ad Tier Update And Announces Shift Away From Microsoft
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Netflix is fine-tuning its approach when it comes to the cheaper, ad-inclusive subscription tier. During Netflix Upfront 2024, an event directed towards sharing information with advertisers, progress and changes were announced. The ad-based tier, introduced in 2022, has had massive growth; a year ago, it had five million subscribers, and now it has around 40 million. Amy Reinhard, the President of Advertising at Netflix, discussed goals, choices, and the basic reasoning behind them regarding the ad tier subscription.
The company aims to launch an in-house advertising program by the end of 2025. The goal is to enable marketers to buy and gauge impact in new, more effective ways. Reinhard explained the move stating, “Bringing our ad tech in-house will allow us to power the ads plan with the same level of excellence that’s made Netflix the leader in streaming technology today.” This will bring things closer to home rather than outsourcing, giving the company more control.
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Image Source: Logopedia
Microsoft was the primary partner of Netflix when it came to advertising programmatic partners; moving forward, they are opening partnerships to include Magnite, The Trade Desk, and Google's Display & Video 360. Reinhard briefly explained the ad process, and how and why they are approaching ads this way, “We’re being incredibly strategic about how we present ads because we want our members to have a phenomenal experience. We conduct deep consumer research to make sure we stay ahead of the competition, bringing opportunities that are better for members and better for brands.”
The ad-free tiers won’t be entirely free from product placement. Special feature content, such as the upcoming Jake Paul-Mike Tyson boxing match to be streamed on the platform, will have sponsorship branding sprinkled during the piece. It won’t be as blatant as marked-out ad space in the cheaper ad-inclusive tier, but it will be present.
Netflix has three tier options. The standard with ads tier is supported by ads, allows access to a majority of Netflix content, lets two devices watch at the same time, and costs $6.99 per month. The standard tier has similar capabilities sans ads, allows for one person outside of the household to have access, and costs $15.49 per month. The premium tier allows for four devices to watch at a time and for two people outside of the household to have access, and costs $22.99 per month.
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