Netflix will debut its ad-supported tier in just a few weeks, giving advertisers the option to target audiences based around the content they are watching.
The ad-supported “Basic With Ads” subscription tier will be available beginning Nov. 1 to subscribers in Canada and Mexico. On Nov. 3, it will launch in Australia, Brazil, France, Germany, Italy, Japan, Korea, the U.K. and the U.S. It will launch in Spain on Nov. 10.
A November launch had previously been cited by industry sources who said the streamer moved the date earlier than its initial 2023 plans to get ahead of a similar plan launching for Disney+. Netflix had, until this point, not confirmed the new date.
Canadian plans are priced at $5.99; the Basic plan without ads is currently $9.99, with the Standard plan at $16.49. The company says it does not intend to change the pricing of its other plans due to the launch of the ad-supported tier.
At launch, ads will be available in either 15- or 30-second formats, playing before and during movies and shows. Videos will be available in 720p high-definition, which is now also the maximum resolution for both Basic plans.
Jeremi Gorman, president of worldwide advertising at Netflix, said in a call with press that ad inventory is “nearly sold out” across most markets, with hundreds of advertisers across product categories. The company is not disclosing CPMs or other costs for ads, but they are currently being sold at a fixed cost, and not being made available through auction. Earlier this year, Netflix announced Microsoft as its advertising partner for its ad tier; industry sources have told Playback sister publication Media in Canada that buying is being done through Xandr, Microsoft’s ad platform.
At launch, Netflix is providing ad targeting based on country, genre or content in the platform’s “top ten.” It is also giving advertisers controls that will ensure ads don’t appear next to content that is not aligned with a brand, such as nudity or graphic violence. Gorman said that, in time, it has plans to add targeting based on things like age, gender and behaviour.
“What we do at launch is not representative of the long-term opportunity,” Gorman told press. She added that any data collected on users would only be used by Netflix and Microsoft for ads on the platform, and could not be used to build audiences elsewhere.
Netflix is planning an average ad load of four to five minutes per hour of content, which Greg Peters, Netflix’s CCO, described as light. He added that the company also wants to have “tight” frequency caps to ensure viewers aren’t repeatedly shown the same ad.
Netflix has partnerships with both DoubleVerify and Integral Ad Science to verify the viewability and traffic validity of ads, though that will not be available until Q1 2023. The company has also announced a partnership with Nielsen to provide ratings data for its shows in the U.S., though the company has not said if or when that partnership might extend to other markets. Earlier this week, Netflix announced a partnership with U.K. ratings body BARB, and Gorman said the company will continue to build its portfolio of measurement partners.
Due to particulars of licensing agreements, there is also a small portion of content that will not have ad buying available. Peters said the exact number differs based on market, but would be in the 5% to 10% range, and the company is currently working to lower those numbers.
The ad-supported tier comes after a period of layoffs, subscriber loss and slowing revenue growth for Netflix earlier this year, which it has attributed to factors including a “relatively high household penetration — when including the large number of households sharing accounts — combined with competition.”
This story originally appeared in Media in Canada
With files from Playback