Is Netflix Looking Back with their Ad Tier Plans?
While many in the entertainment industry were anticipating Netflix’s lean into the AVOD tier as something that had to happen eventually, when we finally received some tangible details around the plan, one thing has been clear. Targeting and tracking, seen as modern essentials, are absent, and the CPMs being sought are unusually high. For those who remember their 2005 DVD era, this seems all too familiar. Brandon Blake, the entertainment lawyer with Blake & Wang P.A, looks deeper into this loop back to the past.
Echoing the Noughties
At the time- as they are doubtlessly hoping now- their advertising push played heavily on their then-iconic status. Brands wanted to be associated with the Netflix machine. Coupled with a solid creative ‘canvas’ to use that allowed for some artistic campaigns, it was attractive at the time.
However, their recently revealed advertising requirements for their proposed advertising tier on their streamer seems all too reliant on that same ‘halo effect’ magic. They do have some strong underlying bones- a partnership with Microsoft to deliver the ads, for one. And advertisers have been keen to work with their streaming arm literally since the wind-down of their DVD sales.
A Different Landscape
However, the world is a very different place from where it was 17 years ago. Despite its recent hiccups, Netflix is still seen as a top-tier streamer. They pull in large audiences, and they do have the ability to time series launches to suit their advertisers. This could be enough to justify those steep CPMs.
However, the bare bones of modern advertising in a digital world are different. And Netflix seem keen to avoid questions about how they will embrace three missing characteristics- tracking, transparency, and targeting.
It took a long while for streaming-era Netflix to give us any data on their viewership and stats. Today, admittedly, we have their participation with Nielsen and their in-house Top 10 lists. But the waters are still too muddy to appeal to the modern advertiser wholly. Their limited offering of genre and viewers of popular shows is lackluster compared to competitors- and those competitors now have brand pulling power of their own. Personalization is now a cornerstone of marketing.
And while Netflix’s commitment to protecting viewer data is admirable, the likelihood of key partners shelling out on expensive plans with no metric tracking in place is slim. Obviously their plans are still very much in their infancy, and as it takes off- and if it takes off in a meaningful way- we are sure more advertising partners will be invited to the table. We may even see a shift in the content they produce, given Netflix’s diverse programming doesn’t pull in the large audiences that more mainstream content does. A shift in the wider landscape is inevitable.
However, how wise is it to come to the table banking on a model of notoriety and exclusivity that no longer truly exists? Therein lies the issue- and it will be an interesting one to see play out.