New Netflix Advertisements Tier Comes With An Unforeseeable Price

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The viewpoints expressed within this story are entirely the author’s and do not show the views and beliefs of Best SMM Panel or its affiliates.

With the looming financial challenges, consumers are hunting everywhere to conserve money.

After getting customer pushback from raising its membership prices, Netflix presented its newest tier: Standard with Ads, in November 2022.

The advertisements tier subscription is $6.99 each month– nearly 55% lower per month than its Standard membership.

While the monthly expense is lower for customers, the latest tier comes with surprise price.

Unpredictable Ad Timing

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

How is this comparable to other Connected television subscriptions?

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

of advertisement time per hour for Netflix is similar to other streaming services, the lingering problem is when an ad will reveal. Advertisement timings are unforeseeable, which interrupts the user experience. The video material for advertisements is about what you expect compared to other streaming services. However the very same concern is at hand– when will this appear in a user’s viewing experience on Netflix? According to Jay Peters from The Brink, a user’s ad

experience varies significantly in between kinds of material consumed: Image credit: Jay Peters, TheVerge.com

As you can see from this example, the amount of advertisements, in addition to the placement of advertisements, is inconsistent, which leads to think that Netflix is evaluating to find the best engagement for not only users but marketers.

Particular Titles Include A Premium Price

The second subtlety with Netflix Fundamental with Advertisements tier originates from what programs and films are used at this level.

Similar to the unforeseeable advertisement experience, the offered titles on the Standard tier seems very spread without a rhyme or reason.

The restriction should not come as a surprise to users, as Netflix announced this back in July.

Titles that aren’t available for Basic users will reveal a red padlock, indicating that it is restricted.

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

I think that Netflix’s subscriber strategy is to lure new users to the service or get previous customers to come back at a Standard rate level. This can assist grow and scale their subscriber numbers after toppling given that increasing rates.

Once a user is in, limiting titles that may be a “need to have” for users tries to reveal users the worth of updating.

How Can Marketers Forecast Connected TV Engagement?

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

In financial uncertainty, consumers may want to sacrifice their seeing experience to include advertisements while trying to save cash. However if the viewing experience decreases, customers might be less likely to engage with Linked TV ads.

While it’s too early to tell about Netflix Fundamental with Advertisements, a common gripe from consumers on other streaming services is the lack of range in advertisements.

Back in 2021, Early morning Consult performed a survey to customers about their experience with streaming services advertisements. According to the study:

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

So, what does this mean for advertisers?

Depending on how you look at it, marketers could see this as:

  • A chance. If there are a lot of repeated ads, this might indicate that competitors is low on Linked TV/OTT. If this is the case, the opportunity for brand name awareness could be more economical for you before the OTT market ends up being too saturated.
  • A sign to stay away. If streaming services do not repair the customer’s viewing experience, users are less most likely to engage with advertisements. And if titles are being restricted at a greater rate, consumers might churn off at a quicker rate than in the past. This, in turn, suggests a high Expense Per Engagement for advertisers. This could be a more dangerous investment for brand names with restricted budgets.

Summary

The most recent Netflix rate tier enables them to take on other streaming services at a lower cost. It’s an outstanding strategic carry on their part, and it opens up the OTT area for marketers to get in front of users who might not utilize other streaming services.

While the strategy type is new, Netflix (along with marketers) should keep track of user engagement carefully and make any tactical pivots essential to make the most of engagement and subscriber growth.

While Netflix ads are open to larger ad companies, I expect them to roll out an internal marketing platform comparable to Hulu at some point next year.

Have you tried Linked TV/OTT advertisements yet? What has been your experience? Are they worth the financial investment?

Included Image: Koshiro K/Best SMM Panel