Netflix is Finally Considering Ads? + UID2 Gets Another Supporter

4
at
4
minutes
Technical Level
May 18, 2022
Ari Belliu
Marketing Communications Specialist
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In this video, I’ll be talking about Netflix potentially going ad-supported and what that means for the programmatic ecosystem and all you advertisers out there. UID2 signed on InfoSum as a supporter, but what does that mean for first-party data?

Netflix is finally considering adding an ad supported option. I never thought this day would come. It's like Fort Knox open up its doors.

Hey everyone, this is Ari from Sharethrough here and today I'll be digging a little deeper into what Netflix flirting with ads could mean for advertisers and the greater CTV ecosystem. As well as the implications of a new cleanroom support for UID 2.

In case you somehow didn't hear Netflix said they'd be considering an ad supported option to help improve revenue after a disastrous quarter. And so many advertisers and brands want in, but why? Netflix has millions and millions of viewers, which presents a unique opportunity for advertisers to reach an untapped audience. But now that the dust has settled, there are some things to consider.

Will Netflix operate ads as a walled garden? Or will they open it up to DSPs? SSPs? And beyond?

This is really the million dollar question that all of ad tech is wondering. If they're looking to maximize revenue, then they want to maximize demand by opening it up to CTV betters all across the landscape. Will they operate more like Facebook and only open ads to clients working directly with Netflix? Advertisers would prefer if Netflix left it open. That way they can transact with the DSPS and control things like frequency all across their CTV buys. And if Netflix does open their door to advertisers, can advertisers only target Netflix users? Or can they bring in their own first party data?

How will viewers react? We still don't know for sure when Netflix announced they'd be charging users for sharing passwords. People weren't really all that happy. Maybe this is a better alternative. Netflix could test ads in smaller markets to determine the impact on viewer sentiments and ad performance too.

Will they offer different tiers?

Disney plus is adding an ad supported tier and most other streaming platforms have the option. So why wouldn't Netflix join the ranks? What will the different tiers look like? Will they include a free tier that has more ads? Or will they offer reduced tier that has a limited amount of ads? And what if some people don't want to watch ads? Will they have the option to remove it?

What's going to be the impact on pricing across the CTV ecosystem?

Well, the influx of advertisers rushing over to Netflix like a goldmine. In fact, the CPM of other inventory. A good guess is it may drive down CPMs elsewhere for the time being.

Netflix considering ads is a good thing. Overall, it's a better way to retain viewers and maximize revenue than to charge them for sharing passwords. Like what's up with that? What's the point of a family plan. But does that mean it's ready, Netflix still has to figure out how to provide value for both viewers and advertisers. It may be a bit of a bumpy ride at first. But ultimately, Netflix will join the rest of the ad supported streaming platforms.

Next up, UID 2 just signed on another supporter. Infosum, the cleanroom platform. Together they allow advertisers to encrypt first party data and create custom audiences as UID 2. But before I get into why this is pretty interesting,

What's a cleanroom?

Now that's a good question depends on who you ask, you're gonna get a bunch of different answers. There's lots of definitions, concepts and offerings. It really depends on the cleanroom. But for the sake of this video, clean rooms are this idea of encrypted user data that advertisers can measure, analyze, build custom audiences, all while remaining privacy compliant.

So why is this a big deal?

Well, it's a step in the right direction. First of all, consumer privacy is important and demands to improve it have gone up rightfully so. And with third party cookies going away, advertisers are having a hard time targeting potential customers. UID 2, which is a universal identifier, is an open source initiative led by The Trade Desk to replace third party cookies with a more privacy compliant way of identifying target audiences. And since UID, two is already private in rooms just add another extra layer of anonymity.

But what does that mean for advertisers?

Advertisers can use their first party data on Infosum to create custom audiences as UID to which then can be passed on to The Trade Desk. This increases the amount of signals that advertisers can use to reach their target audience and a privacy centric way means better performance for their ad campaigns to so if for some supporting UID. To add another extra layer of privacy to user data, which is always welcomed. advertisers can expand the reach of their first party data, which makes it easier to target potential customers. And although UID 2 isn't the only universal identifier and Infosum isn't the only cleanroom platform. If they're all able to work together, it could further expand the reach for advertisers.

That's all for this time, folks. Will Netflix open its doors to advertisers and will more cleanroom platforms join Infosum in supporting UID 2? Let us know what you think in the comments below. And don't forget to like and subscribe. This has been Ari at Sharethrough, thanks for tuning in!

Check out some of our research on CTV:

4 Ways Programmatic CTV is Uniquely Suited to Improve Attention — Sharethrough

Introducing Dynamic QR Codes for CTV Ads — Sharethrough

Should All CTV Ads Have QR Codes After Seeing Coinbase's Super Bowl QR Code Success? — Sharethrough

Sources:

InfoSum Signs On To Support Unified ID 2.0 | AdExchanger

Down 70% in 6 Months, Is Netflix Still the Streaming King? | The Motley Fool

Netflix Will Launch Lower-Cost, Ad-Supported Streaming Plans, Reed Hastings Says

Streaming TV With Ads Puts Netflix Stock And Its Peers At A Crossroads | Investor's Business Daily

13% of U.S. Netflix subs would cancel if charged extra for password sharing

Why Netflix Should Sell Ads – Stratechery by Ben Thompson

​​Netflix shares down more than 20% after losing 200,000 subscribers in first quarter | TechCrunch

• Netflix: number of subscribers worldwide 2021 | Statista

Want to learn more about Sharethrough?

Sharethrough — Human-Centric Programmatic Advertising

Sharethrough Blog

Enhanced Inventory Packages & PMPs

Follow us on LinkedIn: https://www.linkedin.com/company/sharethrough

About Behind Headlines: 180 Seconds in Ad Tech—

Behind Headlines: 180 Seconds in Ad Tech is a short 3-minute podcast exploring the news in the digital advertising industry. Ad tech is a fast-growing industry with many updates happening daily. As it can be hard for most to keep up with the latest news, the Sharethrough team wanted to create an audio series compiling notable mentions each week.

In this video, I’ll be talking about Netflix potentially going ad-supported and what that means for the programmatic ecosystem and all you advertisers out there. UID2 signed on InfoSum as a supporter, but what does that mean for first-party data?

Netflix is finally considering adding an ad supported option. I never thought this day would come. It's like Fort Knox open up its doors.

Hey everyone, this is Ari from Sharethrough here and today I'll be digging a little deeper into what Netflix flirting with ads could mean for advertisers and the greater CTV ecosystem. As well as the implications of a new cleanroom support for UID 2.

In case you somehow didn't hear Netflix said they'd be considering an ad supported option to help improve revenue after a disastrous quarter. And so many advertisers and brands want in, but why? Netflix has millions and millions of viewers, which presents a unique opportunity for advertisers to reach an untapped audience. But now that the dust has settled, there are some things to consider.

Will Netflix operate ads as a walled garden? Or will they open it up to DSPs? SSPs? And beyond?

This is really the million dollar question that all of ad tech is wondering. If they're looking to maximize revenue, then they want to maximize demand by opening it up to CTV betters all across the landscape. Will they operate more like Facebook and only open ads to clients working directly with Netflix? Advertisers would prefer if Netflix left it open. That way they can transact with the DSPS and control things like frequency all across their CTV buys. And if Netflix does open their door to advertisers, can advertisers only target Netflix users? Or can they bring in their own first party data?

How will viewers react? We still don't know for sure when Netflix announced they'd be charging users for sharing passwords. People weren't really all that happy. Maybe this is a better alternative. Netflix could test ads in smaller markets to determine the impact on viewer sentiments and ad performance too.

Will they offer different tiers?

Disney plus is adding an ad supported tier and most other streaming platforms have the option. So why wouldn't Netflix join the ranks? What will the different tiers look like? Will they include a free tier that has more ads? Or will they offer reduced tier that has a limited amount of ads? And what if some people don't want to watch ads? Will they have the option to remove it?

What's going to be the impact on pricing across the CTV ecosystem?

Well, the influx of advertisers rushing over to Netflix like a goldmine. In fact, the CPM of other inventory. A good guess is it may drive down CPMs elsewhere for the time being.

Netflix considering ads is a good thing. Overall, it's a better way to retain viewers and maximize revenue than to charge them for sharing passwords. Like what's up with that? What's the point of a family plan. But does that mean it's ready, Netflix still has to figure out how to provide value for both viewers and advertisers. It may be a bit of a bumpy ride at first. But ultimately, Netflix will join the rest of the ad supported streaming platforms.

Next up, UID 2 just signed on another supporter. Infosum, the cleanroom platform. Together they allow advertisers to encrypt first party data and create custom audiences as UID 2. But before I get into why this is pretty interesting,

What's a cleanroom?

Now that's a good question depends on who you ask, you're gonna get a bunch of different answers. There's lots of definitions, concepts and offerings. It really depends on the cleanroom. But for the sake of this video, clean rooms are this idea of encrypted user data that advertisers can measure, analyze, build custom audiences, all while remaining privacy compliant.

So why is this a big deal?

Well, it's a step in the right direction. First of all, consumer privacy is important and demands to improve it have gone up rightfully so. And with third party cookies going away, advertisers are having a hard time targeting potential customers. UID 2, which is a universal identifier, is an open source initiative led by The Trade Desk to replace third party cookies with a more privacy compliant way of identifying target audiences. And since UID, two is already private in rooms just add another extra layer of anonymity.

But what does that mean for advertisers?

Advertisers can use their first party data on Infosum to create custom audiences as UID to which then can be passed on to The Trade Desk. This increases the amount of signals that advertisers can use to reach their target audience and a privacy centric way means better performance for their ad campaigns to so if for some supporting UID. To add another extra layer of privacy to user data, which is always welcomed. advertisers can expand the reach of their first party data, which makes it easier to target potential customers. And although UID 2 isn't the only universal identifier and Infosum isn't the only cleanroom platform. If they're all able to work together, it could further expand the reach for advertisers.

That's all for this time, folks. Will Netflix open its doors to advertisers and will more cleanroom platforms join Infosum in supporting UID 2? Let us know what you think in the comments below. And don't forget to like and subscribe. This has been Ari at Sharethrough, thanks for tuning in!

Check out some of our research on CTV:

4 Ways Programmatic CTV is Uniquely Suited to Improve Attention — Sharethrough

Introducing Dynamic QR Codes for CTV Ads — Sharethrough

Should All CTV Ads Have QR Codes After Seeing Coinbase's Super Bowl QR Code Success? — Sharethrough

Sources:

InfoSum Signs On To Support Unified ID 2.0 | AdExchanger

Down 70% in 6 Months, Is Netflix Still the Streaming King? | The Motley Fool

Netflix Will Launch Lower-Cost, Ad-Supported Streaming Plans, Reed Hastings Says

Streaming TV With Ads Puts Netflix Stock And Its Peers At A Crossroads | Investor's Business Daily

13% of U.S. Netflix subs would cancel if charged extra for password sharing

Why Netflix Should Sell Ads – Stratechery by Ben Thompson

​​Netflix shares down more than 20% after losing 200,000 subscribers in first quarter | TechCrunch

• Netflix: number of subscribers worldwide 2021 | Statista

Want to learn more about Sharethrough?

Sharethrough — Human-Centric Programmatic Advertising

Sharethrough Blog

Enhanced Inventory Packages & PMPs

Follow us on LinkedIn: https://www.linkedin.com/company/sharethrough

About Calibrate—

Founded in 2015, Calibrate is a yearly conference for new engineering managers hosted by seasoned engineering managers. The experience level of the speakers ranges from newcomers all the way through senior engineering leaders with over twenty years of experience in the field. Each speaker is greatly concerned about the craft of engineering management. Organized and hosted by Sharethrough, it was conducted yearly in September, from 2015-2019 in San Francisco, California.

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Ari Belliu
Marketing Communications Specialist

About the Author

Ari is an experienced digital marketer with a demonstrated history of multi-tasking and working in health and tech on small teams. He's skilled in copywriting, community building, email and social media marketing, and building brand awareness.

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