Netflix (NASDAQ:NFLX) is adding an advertising tier and commercial breaks to its programming to give viewers the option of a cheaper monthly subscription plan.
To facilitate this shift and provide continuous feedback on the efficacy of the shift, Netflix has brought on Integral Ad Science (NASDAQ:IAS), to help provide transparency into ad performance on the proposed tier. IAS will its Viewability and Invalid Traffic (IVT) verification, brands and agencies to get insights into the reach of the campaigns and provide insight on how to shape marketing strategies and drive positive outcomes.
“We are excited to partner with Netflix as they introduce their much-anticipated ad-supported tier that will dramatically increase the global supply of CTV advertising inventory. IAS provides marketers with the tools necessary to monitor the quality of their media buys as they expand their CTV inventory. We look forward to offering essential coverage to brands and the ability to purchase ads on the Netflix platform with confidence,” said Lisa Utzschneider, CEO of IAS.
IAS verification on Netflix will give advertisers the ability to optimize and maximize the outcomes from the advertisements through continuous insights. The offering includes independent third party reporting for Netflix inventory. Also, trend identification services to understand campaign performance and optimization. Finally, consistent verification across media to understand performance.
Tiered and targeted advertising
The company will charge $5.99 per month for the advertising and commercial-backed tier. The non-ad tier will start at $9.99 and go as high as $20.99. Netflix subscribers will watch an average of four to five minutes of ads per hour to be played before and during TV shows and films. Also, not everything in the Netflix library will be available on the ad-based tier, as subscribers won’t have access to the ability to download titles for remote viewing.
This development comes after a series of terrible months for the company. Netflix lost over two million global subscribers in Q2, and more 70 per cent of its stock price.
Netflix is still the world’s largest streaming service, but HBO Max, Peacock, Paramount Plus and Disney Plus may change that. They have outlined plans to start offering its own versions of ad-supported content in the coming months. The company is pushing out the advertising tier in Canada two days prior to most other markets. It will be available in the United States, Brazil, France and the United Kingdom on Nov. 3.