Netflix has secured two experienced executives to chart its course into crowded ad-supported streaming waters. The hires come as the company aims to roll out a cheaper ad-supported tier in early 2023, though a Bloomberg report last week indicated that the offering could go live in select markets late in the fourth quarter. It is expected to be priced between $7 to $9 per month, with the lower range representing about half of what a premium Netflix subscription goes for.
Prior to joining Snap, Naylor was a major player at Hulu, where he promoted nontraditional and nondisruptive advertising formats tailored to the streaming experience, such as one that recognized binge-watching habits. That approach squares with Netflix’s vision of building a better model for premium connected TV than what’s currently available to brands. Gorman, who’s been Snap’s CBO since 2018, previously led Amazon’s global ad sales initiatives.
Netflix’s ventures into advertising have come together quickly following years of resistance to the idea. Intentions to launch an ad-supported option were first revealed in April, as the platform saw subscriber growth cool in a harsh comedown from a strong run earlier in the pandemic.
Earlier in the summer, Netflix was the talk of the town at the Cannes Lions, an advertising festival celebrating creativity, where it met with several high-profile companies with established stakes in advertising. Then, in July, it selected Microsoft — a dark horse candidate — as its global ad-tech and sales partner. Executives have called out a strategic alignment with the tech firm in wanting to develop “a new ads ecosystem around premium TV [and] connected TV ads.”
Netflix reportedly aims to keep its ad load light compared to industry peers, serving just four minutes of commercial time per hour, Bloomberg’s sources said. The company, at least initially, will reportedly eschew running ads during content aimed at children and around its original movies. Dinsey+, which is introducing its own ad-supported plan on Dec. 8, has a similar playbook: a lean volume of advertising messages and no campaigns targeting programming for preschoolers.
While Netflix is making important progress in bringing on Naylor and Gorman, the shuffle comes as a blow to Snap. The image-sharing app has struggled with privacy changes implemented by Apple last year that have made targeting and measuring mobile campaigns more difficult. The Snapchat owner is enacting cutbacks on the teams in charge of building mini-games and apps, its social mapping app Zenly and its hardware division, per The Verge.
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Amid global conflict, domestic crises and the continued effects of the pandemic, many marketers struggled to connect with distracted consumers.
Photo Illustration: Shaun Lucas/Industry Dive; Getty Images
As the most enduring consumer brand rivalry enters a new phase in the metaverse, tall orders around sustainability may demand cooperation over competition.
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