Netflix Reveals Ad Plan Price, Nielsen Partnership and More 'Basic With Ads' Details
The streamer unveiled its upcoming ad-supported tier—launching next month
Credit: Composite by Ad Age
Author: Parker Herren Source: AdAge
Netflix today revealed details for its upcoming ad-supported subscription tier, dubbed “Basic with Ads,” which will be available to U.S. consumers on Nov. 3 at 12 p.m. ET. and will cost $6.99 per month. The streamer also announced a partnership with Nielsen for measurement.
The service will initially launch in 12 markets. Canada and Mexico will launch first, on Nov. 1. The U.K., Australia, Brazil, France, Germany, Italy, Japan and Korea will join the U.S. on Nov. 3, while access in Spain will debut on Nov. 10.
The U.S. price is $3 cheaper than its current base tier. Netflix said the prices of its $9.99, $15.49 and $19.99 subscription tiers will be unaffected by its ad-supported addition, contrasting competitor Disney+’s planned cost increase when its ad-supported offering debuts in December. In comparison, Paramount+ and Peacock’s base ad-supported tiers each cost $4.99 per month and HBO Max’s is $9.99.
According to Netflix, the new tier will average an ad load of four to five minutes per hour, plus “some very tight frequency caps so that members don't see the same ad repeatedly,” said Chief Operating Officer Greg Peters in a call with press. Due to licensing restrictions, “which we’re working on,” some series and movies available in Netflix’s ad-free service won’t be available in the ad-supported tier, Peters wrote in a blog post. On the press call, Peters clarified that the amount of content that won’t be available varies by country, but generally lies “in the five to 10% range.”
At launch, viewers will be served 15- and 30-second ads before and during shows. For film, Netflix will only include pre-roll for new release originals, but will integrate mid-roll advertising in movies over time.
“I’m pleased to say that we will have hundreds of advertisers worldwide for launch, from major automakers to CPG companies, leading travel, retail and luxury brands,” said Jeremi Gorman, Netflix’s recently appointed president of worldwide advertising. “In fact, we’ve nearly sold out all of our inventory for launch.” An example, shared by the streamer, shows advertising from NYX Cosmetics and L’Oreal Paris served against an episode of “Emily in Paris.”
In addition to basic verification partnerships with DoubleVerify and Integral Ad Science, previously reported by Ad Age, Netflix announced it will implement Nielsen’s Digital Ad Ratings for the U.S. market. The data will eventually be incorporated into Nielsen’s upcoming Nielsen One cross-platform measurement product. Both verification offerings will begin in 2023’s first quarter, with Nielsen ratings following “sometime in 2023,” according to Peters’ post.
As previously reported by Ad Age, advertisers will have limited targeting ability on the platform, which offers broad buys based on country and genre.
Netflix will offer similarly broad brand safety options, allowing advertisers to opt out of content by keyword, such as “sex, nudity or graphic violence,” per Peters. One media buyer told Ad Age that the keyword-based brand safety measure may be a concern for cautious clients. “I don't know that that reassures clients that they’re not going to end up in ‘Squid Game’ or something like that,” said the buyer.
“‘Basic with Ads’ will launch just six months after we first announced the option of a lower priced ads plan,” Peters added in the post. “As we learn from and improve the experience, we expect to launch in more countries over time.”
Multiple buyers have told Ad Age their advice to clients is to maintain a wait-and-see stance. One buyer said clients would be more enthusiastic to buy with Netflix if “they were being somewhat marketplace-realistic in terms of pricing.” While initial reports placed Netflix CPMs in the mid-60s, multiple buyers have separately reported the number has only lowered to the high 50s.
Combined with the ad-tier’s post-upfront timing, “Folks are not going to go steal budgets to try to give [Netflix] something just so that they can pay a 20% premium over what the highest thing out there is,” said the buyer.