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    Now Basic with Ads has launched, what's next for Netflix?

    Netflix has launched the long-awaited Basic with Ads tier in 12 countries. During The Drum’s Media Summit we ask top marketers and buyers whether the streaming giant has done enough to attract top brands and consumers.

    At roughly less than half the price of a standard subscription, Netflix Basic with Ads tier has begun its roll out and will be launched in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the UK and the US by November 10. The ad-supported subscription tier will cost $6.99 (£4.99) a month and will make accessible 90-95% of Netflix content due to licensing agreements.

    Media buyers have previously expressed doubt over the product that is quickly being built by the streaming giant. But since then, we have had a better understanding of what the product will look like.

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    The ad load will average four to five minutes per hour with the spot being either 15 or 30 seconds in length. Ads will play before and during series and films. Although new-release films will only have pre-rolls but titles that have been on the services for a while have the potential to have mid-rolls. There will also be tight frequency caps – a common complaint with CTV advertising.

    Speaking at The Drum’s Media Summit, John Manning, client investment director at Starcom said the launch of the scheme was “hugely exciting for advertisers” but tempered that. “We need to see how consumers will uptake this proposition. If Netflix was to transfer all of its inventory overnight it would be a huge opportunity but at the moment we don’t know how many people will use the ad tier.”

    Netflix’s ad tier is cheaper than a premium subscription but Manning wonders if the small saving is enough to entice audiences who are keen to cut prices. “It does offer an audience, though, as we have seen declining slowly in TV if they can get it right, there is a real opportunity.”

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    To properly appease marketers, the service has to scale to a worthwhile size where global segments can be reached. And then there’s the measurement question, for its high CPMS, will Netflix deliver a comparable service to

    The streamer joins Disney+ in being audited by Barb in the UK which will lay bare their penetration in the region. With the Crown season 5 launching soon, we’ll know the impacts we can expect from its top properties. As of today, we know that the most-watched show on Netflix on November 1 is the Watcher, the grisly drama created by Ryan Murphy. That accumulated 500k views. That’s a respectable mass but was dwarfed by an airing of the Great British Bake Off that saw 4.3m.

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    Via Barb, Manning would hope there is a breakdown of which viewers accessed the show in the ad-funded tier vs subscriptions. “It’s useless if we don’t have that delineation.”

    Product placement also came up, a space in which Netflix would have to scale up significantly to make a material difference on the books. Speaking more broadly about streaming Manning said: “Brands were hungry to get on these platforms. They are notoriously difficult to get into. We spoke to Amazon to break down the barrier to get content on there. It was a learning experience for both of us.”

    Next Samantha Glynne, executive at UTA entertainment and culture marketing, said the draw of Netflix is strong. “Every time we worked with a brand, they asked to be a part of Netflix and be a part of culture. But you need the data, what is the next big show, what creators are resonating.”

    If comprehensive packaging around product placement, sponsorship, and in-stream ads, brands cut outpunch their competitors in this buzzworthy platform. 

    Glynne added: “UTA had been trying to normalize rideshares for Lyft with various different shows, including Stranger Things season 2. It wasn’t in the show because it was set in the 80s but it was around the show, creating spooking cars that elevate the IP.”

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    In short, Lyft became part of the marketing efforts for the show and both brands saw the uplift. Could Netflix better integrate brand partners into its marketing flywheel rather than the content itself? 

    To help deliver this new ad tier, Microsoft was chosen as a partner. Netflix will only capture gender and date of birth at sign-up and said it would not be using that data at launch. It added that Microsoft will only be able to use the data and it will not build profiles for any other company.

    The streamer is reportedly charging $65 CPM for serving ad impressions to 1,000 people and had put a $20m minimum spend. Marketers have taken umbrage at Netflix’s fees especially commanding high rates before the proof of product. The Drum understands that the $65 is a launch price and that price would reduce after the rollout.

    For more media analysis, check out The Drum’s Media Summit broadcast on November 2 and 3. And be sure to subscribe to our weekly Future of Media newsletter.

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