Netflix’s ad tier has 5 million monthly active users—and more upfront takeaways

Netflix’s ad tier reaches 5 million monthly active users globally, the streamer announced today during its first-ever upfront presentation. The event, initially intended to be held at the Paris Theater before it pivoted to a virtual format late last week, gave advertisers long-awaited insights into Netflix’s ad-supported tier in addition to announcing new ad products and measurement capabilities. The company opened its presentation with a sizzle reel not just of its content, but boasting its accomplishments, such as the “Stranger Things”-driven boost for Kate Bush’s “Running Up That Hill (A Deal With God),” bringing Formula 1 racing into the U.S. mainstream, social virality for Lady Gaga’s “Bloody Mary” alongside its “Wednesday” dance and upping sales of chess boards after the success of “The Queen’s Gambit.” Co-CEO Greg Peters then acknowledged the presentation wasn’t happening “exactly as we originally planned.” Check out the latest Ad Age events and award programs As Netflix presented its upcoming programming—including the return of “Cobra Kai” and the final seasons of “Stranger Things” and “The Crown,” as well as a handful of new titles—it made no mention of the writers’ strike. A source close to the streamer’s upfront told Ad Age the strike was the reason Netflix pulled the in-person event, as well as reportedly halting production of some of its listed series. While Netflix previously claimed its show would only feature executives, it did contain a pre-recorded conversation with “Stranger Things” creators the Russo Brothers. Later, the virtual event ended with a performance by Alicia Keys and the “Queen Charlotte” orchestra. Since launching in November, Netflix’s ad-supported subscription has been somewhat of a mystery to its advertisers, who have desired more transparency. The streamer has been eager to tout stats about its total viewing to pitch its ad offering—in the upfront Jeremi Gorman, president of global advertising, shared that Netflix’s “reach at two or more hours is higher than almost everyone else’s reach at a one-minute threshold,” according to Nielsen. The upfront marks the first time Netflix has assigned a number to its ad tier users, also noting the number has more than doubled since the beginning of this year. More than a quarter of new subscribers now choose Netflix’s ad tier, according to the company, and 70% of its ad tier users are within the traditional golden 18-to-49 age group for TV advertisers. The basics Gorman dove into Netflix’s ad priorities by explaining it has spent its first six months focused on mastering the basics, guided by “areas advertisers told us matter most—like geo, age and gender targeting; third-party verification and deploying the right brand suitability mechanisms for [advertisers] to make the best decisions for [their] brand.” Netflix VP of global ad sales Peter Naylor previously shared with Ad Age upgrades to its brand safety and targeting capabilities, such as placing advertising against Netflix’s daily-generated Top 10 list of most-watched content. Gorman said the company was still “focusing on reaching parity” with its competition. Upfronts and NewFronts blog Tracking the latest TV and digital ad pitches Read more here What’s next Netflix announced new sponsorship opportunities for advertisers. In the streamer’s upfront negotiations, it will sell the ability for advertisers to be the launch sponsor of anticipated series on the platform. Another new capability will allow brands to sponsor local holidays, with Earth Day, “Geeked Week” and Valentine's Day shown as examples. Naylor also gave updates on measurement capabilities, which media buyers told Ad Age previously was among their top list of wants from the streamer. Netflix will offer Nielsen’s Digital Ad Ratings measurement product to advertisers starting in this year’s fourth quarter, allowing marketers the ability to verify the reach of their ads on the platform, as well as gain greater insights into Netflix’s ad tier viewers. Media measurement blog Tracking TV, social and digital updates Click here “Lots of entertainment companies just talk about reach and, don’t get me wrong, that is incredibly important,” said Gorman. “But ad-supported services should really be about reach and engagement.” Netflix also announced a partnership with EDO, the attribution measurement company, that allows advertisers to track business outcomes from their ads. Naylor shared early insights from the partnership, including that viewers are four times more likely to engage with an ad on Netflix than one on other streaming services, and 4-1/2 times as likely compared to linear TV.Read more: Netflix picks EDO for outcomes measurement “The signals are promising,” said Naylor. “Engagement on our ads plan is similar to our comparable non-ads plans. That’s critical because it all starts and ends with consumers.” Co-CEO Ted Sarandos looked to the future of Netflix's ad capabilities, which he said could present opportunities previously impossible on linear TV. “Imagine an engaging 30-minute commercial that plays out over several days,” said Sarandos. “So when you leave one show to watch something else, the ad follows you and the story continues.”

Netflix’s ad tier has 5 million monthly active users—and more upfront takeaways

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