New Netflix Advertisements Tier Comes With An Unforeseeable Rate

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With the looming financial difficulties, customers are scrounging all over to conserve cash.

After receiving customer pushback from raising its subscription costs, Netflix rolled out its most recent tier: Standard with Ads, in November 2022.

The ads tier membership is $6.99 monthly– practically 55% lower each month than its Standard subscription.

While the month-to-month cost is lower for consumers, the most recent tier features covert price.

Unforeseeable Advertisement Timing

In the brand-new Netflix Basic with Ads tier, users can expect around 4-5 minutes of advertisements per hour.

How is this comparable to other Connected TV subscriptions?

Image credit: Table produced by the author, November 2022. Sources of info are linked in the image. While the quantity

of advertisement time per hour for Netflix is equivalent to other streaming services, the sticking around problem is when an ad will show. Ad timings are unpredictable, which interrupts the user experience. The video material for ads has to do with what you anticipate compared to other streaming services. However the exact same issue is at hand– when will this show up in a user’s seeing experience on Netflix? According to Jay Peters from The Edge, a user’s ad

experience differs considerably between kinds of content taken in: Image credit: Jay Peters, TheVerge.com

As you can see from this example, the amount of ads, along with the placement of ads, is irregular, which leads to believe that Netflix is testing to find the best engagement for not just users but advertisers.

Particular Titles Come With A Premium Price

The second subtlety with Netflix Fundamental with Advertisements tier comes from what shows and films are provided at this level.

Comparable to the unpredictable advertisement experience, the offered titles on the Basic tier seems exceptionally spread without a rhyme or factor.

The limitation shouldn’t come as a surprise to users, as Netflix revealed this back in July.

Titles that aren’t readily available for Standard users will show a red padlock, suggesting that it is restricted.

The red padlock seems to be a passive “Contact us to Action” since users can click on the padlocked title, which takes them to an upgrade screen.

I theorize that Netflix’s customer method is to lure brand-new users to the service or get previous customers to come back at a Basic rate level. This can assist grow and scale their customer numbers after tumbling given that increasing rates.

Once a user remains in, restricting titles that may be a “should have” for users tries to reveal users the value of updating.

How Can Advertisers Projection Connected Television Engagement?

Connected television advertisements aren’t new to consumers. Brands invested over $400 million in advertisements on Hulu alone in 2021.

In economic uncertainty, consumers may want to compromise their seeing experience to include advertisements while trying to conserve cash. But if the viewing experience decreases, consumers may be less likely to engage with Connected TV advertisements.

While it’s too early to tell about Netflix Basic with Advertisements, a common gripe from consumers on other streaming services is the absence of variety in ads.

Back in 2021, Early morning Consult conducted a poll to consumers about their experience with streaming services advertisements. According to the survey:

  • 69% of users believed the advertisements they got were repetitive
  • 79% of users were bothered by that experience

So, what does this mean for marketers?

Depending upon how you take a look at it, marketers might see this as:

  • A chance. If there are a lot of duplicated ads, this could suggest that competitors is short on Connected TV/OTT. If this is the case, the chance for brand name awareness could be more cost-efficient for you before the OTT market becomes too saturated.
  • An indication to stay away. If streaming services don’t fix the consumer’s seeing experience, users are less likely to engage with advertisements. And if titles are being limited at a greater rate, customers might churn off at a much faster rate than in the past. This, in turn, implies a high Cost Per Engagement for marketers. This might be a more dangerous financial investment for brands with restricted budget plans.

Summary

The most recent Netflix cost tier enables them to take on other streaming services at a lower price. It’s an excellent tactical move on their part, and it opens up the OTT space for marketers to get in front of users who may not utilize other streaming services.

While the plan type is new, Netflix (as well as advertisers) need to keep track of user engagement carefully and make any tactical pivots required to optimize engagement and subscriber development.

While Netflix ads are open to bigger ad business, I anticipate them to roll out an in-house marketing platform similar to Hulu sometime next year.

Have you attempted Connected TV/OTT advertisements yet? What has been your experience? Are they worth the investment?

Included Image: Koshiro K/Best SMM Panel