Advertising on Netflix: What Marketers Should Know

Netflix has centered itself around a seamless viewer experience, steering clear of advertisements—until now, that is. By recognizing evolving market opportunities and audience needs, Netflix has now embraced a new approach. 

Netflix has adopted the Subscription Video on Demand (SVOD) model, offering advertisers and brands the chance to interact with the millions that make up the streaming giant’s platform. The introduction of its ad-supported tier provides a lower-cost option for viewers while offering businesses the opportunity to tap into a vast and engaged audience with tailored digital advertising strategies, enhancing the potential for targeted and effective brand engagements.

 

Netflix

Why Advertise on Netflix?


Netflix’s expansion to include an ad-supported subscription tier is an ideal moment for advertisers looking to reach a highly engaged and broad audience. Here are some compelling reasons why brands should consider advertising on Netflix:

  1. Massive Audience

With over 13 million US subscribers as of early 2024, Netflix offers advertisers access to an expansive and varied demographic. The Netflix advertising platform offers a valuable opportunity to achieve broad reach, engaging a wide audience in a personal and direct manner.

  1. High Engagement Levels

Netflix viewers average about 1 hour of viewing daily, indicating high engagement and providing multiple opportunities for ad impressions. This level of viewer involvement ensures that advertisements have a greater chance of being noticed and remembered.

  1. Premium Content 

Netflix is home to multiple award-winning series and films. Advertising in this high-quality content environment enhances the perceived value of ads, associating brands with top-tier production values and storytelling.

  1. Diverse Ad Formats

Netflix has introduced video lengths at :10, :15, :20, :30, and :60 seconds. These options allow advertisers to select the best duration for messaging based on their specific goals and the context of the viewer’s experience. 

Understand Netflix’s Ad Inventory


Netflix’s ad-supported plan includes commercial breaks in most TV shows and movies. While the vast majority of TV shows and movies are available on an ad-supported plan, a small number aren’t due to licensing restrictions. These titles will
appear with a lock icon when users search or browse Netflix. 

Viewers can expect to see an average of 4 minutes of ads per hour (this may vary based on the title watched) before and during select TV shows and movies. For newly released movies, ads are only played before the title begins. Fast forward and skip aren’t available when an ad is playing. 

Netflix advertising costs are based on a Cost Per Mille (CPM) pricing model, where advertisers are charged for every thousand impressions their ads receive. This model provides predictability in budgeting and allows advertisers to manage their campaign costs effectively.

Inventory

Utilizing the CPM structure enables advertisers to strategically plan their campaigns, optimizing both visibility and cost-efficiency to ensure maximum reach on the Netflix platform.

Strategic Placement and Timing


Understanding Netflix’s streaming service ad inventory is crucial for maximizing the impact of your campaign. 

When it comes to placement, your ads can appear at various points—either at the beginning, during, or after Netflix content. There are benefits to each: 

  1. Ads at the beginning of content capture viewers’ attention early, potentially increasing brand awareness and message retention. 

  2. Mid-content ads benefit from viewers’ established engagement with the program, offering a prime opportunity to present more detailed messages or calls to action when viewers are most immersed. 

  3. Ads after content can leverage viewers’ post-viewing receptiveness to influence decisions or encourage further interaction with the brand.

Timing is everything, so choosing appropriate ad lengths is critical to your overall strategy. As mentioned above, Netflix offers :10, :15, :20, :30, and : 60-second slots. Short, snappy ads might be perfect for delivering a quick and simple message, ideal for brands looking to boost brand recall or announce a time-sensitive offer. 

Conversely, more immersive ad formats may be better suited for detailed storytelling or engagement-heavy campaigns, ideal for advertisers aiming to build a deeper connection with their audience. It’s all up to you and your objectives! 

Let’s Talk Strategy

Netflix Targeting Capabilities


The available audience targeting on Netflix is based on demographics, viewing habits, and preferences. The following targeting capabilities can enhance the relevance of your advertisements while boosting viewer engagement and campaign effectiveness: 

    • Top 10: Netflix’s list of the top ten most watched TV and films, refreshed every 24 hours.

    • Genre: Includes Run of Network (RON), Drama, Comedy, Romance, Action, Thriller & Horror, Unscripted, Sci-fi & Fantasy, and Top 10.

    • Age: Includes ages 18-34, 18-49, 24-54, 35+, and 50+.

    • Geographic: Country or state level.

    • Gender

Netflix’s audience targeting capabilities are a powerful tool for brands and advertisers aiming to enhance the relevance and effectiveness of their campaigns. By focusing on Netflix viewer demographics, viewing habits, and preferences, these targeting options ensure that your advertisements reach precisely the right audience. 

Features such as “Top 10” enable ads to be placed alongside the most popular content, increasing visibility. “Genre” targeting allows ads to be shown during shows and movies of a specific type, aligning with viewer interests. Age and gender targeting are essential for reaching particular demographic groups with tailored messaging while geo-targeting to the state level helps localize ads effectively. 

Overall, the use of these targeted capabilities ensures that your ads are engaging and more likely to influence viewer behavior,  which is the core intention behind targeted advertising on streaming platforms.

Netflix Restrictions


It’s crucial for advertisers to be aware of the specific
Netflix advertising guidelines that govern how and where ads can be placed within the platform. These guidelines are designed to ensure that your ad placement strategies align with the overall viewer experience, maintaining the quality and integrity that Netflix subscribers expect. 

Restrictions

Additionally, understanding these restrictions helps advertisers maximize their content sponsorship opportunities, allowing for creative and effective integration of their messages without compromising the content’s appeal or viewer engagement. 

The following are rules and expectations for ad content and practices on Netflix:

  • Ads must comply with all applicable laws, rules, regulations, and industry self-regulatory guidelines. This includes practices such as ad targeting.

  • Ads may not infringe on the rights of others, including copyright, trademark, and other intellectual property or personal rights, or be defamatory. 

  • Ads must be accurate, truthful, and not misleading.

  • Ads should be clearly identifiable as advertisements. They should not be presented as editorial content, news reports, emergency alerts, or otherwise.

  • As an advertiser, you must have substantiation for all express and implied claims in your ads. Upon request, you will provide the substantiation to Netflix.

  • No false endorsement, deepfakes, or similar deceptive practices. 

  • Ads may not engage in or promote discrimination, including based on race, religion, nationality, ethnicity, disability, sexual orientation, gender, or age.

  • Ads contrary to good taste are not permitted. 

  • No ads that glorify or encourage criminal, unsafe, or inappropriate behavior; display excessive violence; are sexually explicit, overly suggestive, or contain nudity; have obscene or profane language or depictions; or are otherwise threatening, harassing, or harmful.

  • Ads may not include linkouts (e.g., clickable URLs or QR codes) unless approved by Netflix. The content of landing pages must also comply with this policy. 

  • Netflix has the right to review, approve, reject, require edits to, and withdraw any ads on a case-by-case basis at its discretion.

Have questions about Netflix’s Ad Policy?

Looking Ahead: The Future of Measurement in Netflix Advertising


As Netflix continues to refine its advertising offerings, it’s important for advertisers to stay informed about the streaming platform’s current capabilities and future enhancements. 

While there aren’t the most extensive tools for attribution and measuring ad performance on Netflix, including third-party measurement, we’re hopeful that the platform is making significant strides toward enhancing these features. After all, advertising is a newer component of the Netflix platform. 

The following metrics are what we can currently report:

  • Impressions
  • Clicks
  • CTR 
  • Video Completion Rate 
  • Render Rate 
  • Fill Rate 
  • Response Rate 
  • Video Skip Rate
  • Video Start 

This year, through our partnership with Xandr, Division-D will have even more tools at our disposal, including Brand Lift, Nielsen Digital Ad Ratings (DAR), Conversion Tracking, and Search Uplift capabilities. This expansion of tools is particularly exciting as it significantly enhances our ability to measure and optimize Netflix campaigns.

With its acknowledgment of creating space for brands and advertisers, making monthly subscriptions more affordable for viewers, and shifting focus toward engagement metrics, Netflix is already changing the future of streaming platform advertising efforts. Advertisers, this is your time to engage with a captive audience!

Streaming

Capturing the Netflix Audience with Division-D


At Division-D, we understand the power of precision. By leveraging our deep industry knowledge and cutting-edge capabilities, we help brands craft strategic campaigns that resonate with viewers and deliver measurable results. Our expertise in streaming media,
CTV, and OTT advertising ensures that your brand can effectively capture Netflix’s audience, maximizing both reach and impact.

From selecting optimal ad formats to strategic placements, our approach is tailored to align with your brand’s unique objectives. Whether you’re looking to increase brand awareness, promote a new product, or drive specific consumer actions, our team at Division-D is equipped to transform your vision into a compelling and successful campaign on the world’s leading streaming platforms.

Ready to Get Started? Let’s Chat!


Author
Drue Moxley
Digital Marketing Coordinator

Drue Moxley is Division-D’s digital marketing coordinator, driven by a passion for brand messaging, content creation, and strategic storytelling. To bring on new clientele, Drue pushes Division-D’s brand forward by managing multiple organic social platforms, producing insightful collateral, and connecting with audiences through engaging blogs.

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