Despite the rise of Disney, new research indicates that Netflix is expected to keep making the most money out of all the streaming services, with $30bn expected by 2027.
Ben Cicchetti, VP of Corporate Marketing at InfoSum, explains why Netflix has the opportunity to make its advertising inventory extremely valuable to brands seeking an ever-greater return on advertising spend (ROAS), and a deeper understanding of customers.
Amid slowing subscriber growth and growing competition, Netflix has made a necessary change to help diversify their revenue stream beyond subscriptions.
With its announcement of a new ad-funded model, it has the potential to become one of the biggest ad-supported media companies in the UK. Customers are reaching a point where fragmentation in the streaming sector, especially with escalating subscription costs, is too much to tolerate.
So, as customers crave cheaper alternatives and reassess their growing subscription commitments - with Ofcom finding that one in five UK homes signed up to all three biggest streamers (Netflix, Amazon and Disney+) - I anticipate the focus on Netflix launching its ad tier later this year will largely be on personalisation.
To create personalised advertising experiences, at Netflix’s disposal is behavioural data such as viewing habits, and authenticated data (email address).
Thanks to the volume of this granular data, Netflix has the opportunity to make its advertising inventory extremely valuable to brands seeking an ever-greater return on advertising spend (ROAS), and a deeper understanding of customers.
This will be especially true if Netflix powers its service with a Data Clean Room, a technology that lets brands match and build custom audiences based on their own first-party data.
By Ben Cicchetti
VP of Corporate Marketing