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Commercials are coming to Netflix – What does this mean for marketers?

Netflix has experienced a major decline in subscribers, being a loss of 200,000 subscribers, since the start of 2022. As a way to get back subscribers, the streaming service will bring advertising to the platform and offer cheaper subscription packages that are supported by ad revenue. Netflix had been against the use of ads on the streaming platform for years but finally buckled beneath the pressure.

Netflix’s COO, Greg Peters, has said that introducing advertising onto the streaming platform “is an exciting opportunity for us”. According to the co-CEO of Netflix, Reed Hastings, he is a “bigger fan of consumer choice. And allowing consumers who would like to have a lower price, and are advertising-tolerant, get what they want, makes a lot of sense.”

This new development in the platform has not only provided more options for subscribers, but also for marketers. The incorporation of advertisements on Netflix is still in its infancy, but marketers can start thinking about how they prepare for and take advantage of this development.

Netflix Subscriptions

What commercials on Netflix mean for marketers

Netflix has been a trailblazer for businesses that want to incorporate a subscription business model. The success of Netflix has inspired businesses in a range of industries to use a similar pricing approach. Incorporating commercials can be seen as a risk, as subscribers have already shown avoidant sign-up behaviour, but it seems the potential benefits outweigh the risks.

Marketers can start preparing for commercials being incorporated into the streaming platform by educating themselves on the benefits. Marketers can use commercials to their advantage seeing that they can be incorporated into their existing pay-per-click advertising (PPC) strategy. This addition will help marketers to reach larger audiences, while challenging them to create higher quality attention grabbing commercials.

Netflix commercials can be incorporated into a PPC advertising strategy

OTT advertising as well as Netflix commercials have the potential to scale a PPC strategy you have in place. Most PPC campaigns are run as search, display, or on social media. If marketers are able to expand their PPC campaigns to Netflix, they would be able to gain unchartered benefits for their brands.

Many companies already advertise on streaming platforms that are ad-supported. The incorporation of commercials on Netflix will help marketers to scale their PPC campaigns and target viewers based on their movie interests.

Netflix commercials are able to reach much larger audiences

When curating a Netflix advertising strategy, marketers need to consider the audiences, and the size of these audiences, that the commercial will be received by. Netflix’s target market for the ad-supported subscription package is those who are price conscious and who are looking to save money and as such, marketers should create campaigns accordingly. For example, advertising luxury products on Netflix is likely to not be a smart choice as the audience is unlikely to purchase luxury items often.

Netflix’s new ad-supported subscription campaign

Netflix’s new ad-supported subscription campaign is a challenge to create higher quality commercials

The streaming platform creates and releases content that is of the highest quality to satisfy its subscribers. The commercials being added to the streaming platform therefore need to match the same level of quality to not be disruptive and to not make the brand seem cheap or of a low quality.

Many subscribers are not excited about the ad-supported version of Netflix as commercials are viewed as being disruptive. But in-stream commercials which have been done well have been accepted across other streaming platforms. If the commercials are of a high quality and are relatable to the audience, the audience is likely to be more accepting of the interruption.

In Conclusion

As the ad-supported subscription package is rumoured to be launched before the end of 2022, marketers still have time to prepare for this new feature. By considering how to incorporate Netflix commercials into existing PPC strategies, taking the time to consider the audience who will purchase the ad-supported subscription package, and considering how to create high-quality commercials, are the three key takeout’s for marketers that wish to take advantage of this new Netflix feature.