Netflix completed the 12-market rollout of its ad-supported subscription tier on Thursday. What’s next? For now, Peter Naylor, the streamer’s recently appointed VP of advertising sales, asked marketers to “let us just get going, build the audience”—and then, he promised, advertising innovations would follow.
Naylor gave advertisers an early glimpse of what could be next for Netflix—including new measurement partners, shoppable ads, creator-made commercials and its upfront plans—at Ad Age’s Next: Streaming conference on Nov. 10.
The sales VP joined the chorus of other Netflix executives over the past months warning marketers that its initial ad product is a far cry from what they intend to offer soon. The current ad tier is a “minimally viable product,” as Naylor described it, but he said it won’t be long before it justifies the industry-high CPMs, or cost to reach a thousand viewers, that Netflix has demanded (media buyers have placed the number from the high-$50s to mid-$60s, as previously reported by Ad Age).
“[Marketers] shouldn’t buy based on CPM,” Naylor said. “You have to evaluate the media properly as opposed to just diving for CPMs. And with a looming recession, I think there might be pressure from clients and their agencies to merely focus on the bottom line instead of focusing on the quality of the content, the quality of the audience and what they’re getting.”
“Quality” has been a common refrain from Netflix in response to advertiser complaints about minimal targeting, measurement and ad products, as well as little precedent from the company for transparency beyond its own audience metrics, like the weekly Netflix-generated “Top 10” list. While Naylor said the ad-supported tier’s “audience is developing as we speak,” multiple media buyers have told Ad Age that Netflix has yet to share early results despite requests for data.