{"id":622718,"date":"2023-03-28T09:49:26","date_gmt":"2023-03-28T14:49:26","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/03\/28\/netflixs-cpm-still-under-media-buyers-skin-months-into-its-disjointed-push-into-advertising\/"},"modified":"2023-03-28T09:49:26","modified_gmt":"2023-03-28T14:49:26","slug":"netflixs-cpm-still-under-media-buyers-skin-months-into-its-disjointed-push-into-advertising","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/03\/28\/netflixs-cpm-still-under-media-buyers-skin-months-into-its-disjointed-push-into-advertising\/","title":{"rendered":"Netflix\u2019s CPM still under media buyers\u2019 skin months into its disjointed push into advertising"},"content":{"rendered":"

Countering recent reports about Netflix\u2019s first quarter of offering an ad-supported tier being largely successful<\/a>, media buyers Digiday spoke with are expressing frustration at its still-too-high $55 CPM and the still-too-slow growth for its ad-supported sub base.<\/p>\n

It\u2019s important to note that the four high-level investment executives at a number of media agencies all expressed optimism about the direction Netflix is heading in. And they want to see Netflix succeed, they said, if only to have more competitive options to place their clients\u2019 dollars in the cluttered and confused CTV marketplace \u2014 but also so that those viewers aren\u2019t lost to marketers behind ad-free paywalls.\u00a0<\/p>\n

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Still, the launch has left a few major investment execs \u2014 and their clients \u2014 feeling underwhelmed with what Netflix brought to its ad-supported launch back on Nov. 3, 2022. One major holding company head of investment noted that several clients expressed a strong desire to be part of that launch, despite very few subscribers (the ad-supported tier now counts about 1 million subs), but the exec was disheartened to find the streamer had not cut\u00a0 back further on its $55 CPM (which was down from an initial $65) or offering some sort of added value for launch advertisers.\u00a0<\/p>\n

\u201cSince then, I actually polled the team to see how much interest there been post launch among clients feeling like they needed to get on Netflix? [There was] Zero,\u201d said the head of investment, who spoke on of anonymity.<\/p>\n

\u201cA lot of clients dropped out at that point, because they said that it\u2019s not worth it,\u201d continued the exec, who thinks Netflix would be more fairly priced at between a $45-50 CPM. \u201cThose clients that dropped out because of the price obviously haven\u2019t come back in. But then we also haven\u2019t had clients post launch that came and said, \u2018Well, I wasn\u2019t in the launch, but now I really want to be on Netflix.\u2019\u201d<\/p>\n

The head of activation at another major media agency group noted that make goods continue to be offered to advertisers<\/a>. \u201cThey literally are giving money back because they can\u2019t actually deliver what they sold in due to their low subscriber base,\u201d said the executive who also spoke on condition of anonymity. \u201cThey\u2019ve pissed everyone off by overcharging and underdelivering.\u201d<\/p>\n

The first exec also pointed out that the ad sales operation needs to get more sophisticated. \u201cThey\u2019re still in their infancy with their ad model, meaning their targeting is not yet up to par with some of the other streaming providers.\u201d<\/p>\n

Even the tech side of Netflix\u2019s ad business is being scrutinized, although Netflix isn\u2019t being singled out per se. \u201cMany AVOD\/OTT companies are experiencing similar challenges in determining how to balance and optimize their own subscriber dynamics with the growing expectations of advertisers who demand measurable outcomes,\u201d said Herman Yang, head of Moloco Enterprise, which is pushing AVOD providers to move to machine learning solutions with dynamic pricing.<\/p>\n

All that said, the activation executive did acknowledge that despite the frustration, media agencies need to work with Netflix because of its immense potential once Jeremi Gorman and Peter Naylor, the two execs hired away from Snap last August (mostly after launch deals had already been secured), have their teams in place. Which is apparently happening now.\u00a0<\/p>\n

\u201cAt some point they will figure things out and you don\u2019t want to be last man in,\u201d explained the exec.<\/p>\n

A third executive at another major media agency network agreed that Netflix will ultimately be a must-buy at some point, just not today. \u201cConsidering how much time and space Netflix occupies in consumers\u2019 lives, that incremental reach will come at a premium,\u201d said the exec.\u00a0\u201cNetflix is betting on quality over quantity. It\u2019s a bit of a long-game approach.\u201d <\/p>\n

Where that Microsoft deal \u2014 a bit of a head-scratcher to media agencies \u2014 goes from here remains unknown, as Gorman and Naylor lay out their plans for selling the balance of 2023, including in the upfront. <\/p>\n

For its part, Netflix believes it\u2019s right where it needs to be. \u201cWe continue to be excited about the growth and performance of our\u00a0ads business, and we are confident that we are building the best team to deliver on our clients\u2019 objectives,\u201d read a statement from Netflix. \u201cAs we expand globally, we will keep evaluating how the industry is evolving to ensure we are best positioned to build a forever advertising business.\u201d<\/p>\n

One vocal supporter of Netflix in the media agency world is Matt Kramer, who\u2019s head of brand investment at Media.Monks. \u201cIt\u2019s unfair, I think, for us to think that they\u2019re gonna get it exactly perfect from the very beginning,\u201d said Kramer, who said his team did their homework to know what to expect at launch and, as a result, weren\u2019t disappointed. \u201cAs Netflix grows their ad supported subscriptions, that supply and demand will become more equalized, and we will see that reflected in the CPMs.\u201d<\/p>\n

Kramer said he is seeing a dramatic ramping up of Netflix\u2019s abilities since launch. \u201cThey\u2019re building an amazing team, an amazing roster, and I think they\u2019ve learned a lot from the launch,\u201d he said. <\/p>\n

\u201cThey now have more data, they now have a better understanding of how quickly they\u2019re going to be able to grow the AVOD portion of their business. And so I think their forecasting, as well as the talent that they have there, is amazingly better than it was in the very beginning.\u201d<\/p>\n

As for that talent, a LinkedIn search shows that Netflix has filled several sales director positions since January, including Kinsey Osberg Tamberrino, fomerly senior vp of national sales at Vevo; Doug Brodman, who was most recently with Twitter; Victoria Morris from Google\/YouTube; Valerie Bischak who most recently was at Amobee but has considerable sales experience at Viacom; and Michaela Giovengo, who most recently was with Disney Ad Sales and Hulu before that. <\/p>\n<\/div>\n

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