October 14, 2022

Netflix’s $6.99 Ad Tier “Nearly Sold Out” of Ad Inventory

3rd + Lamar

Netflix is launching its new ad-supported tier in the U.S. on Nov. 3, and Jeremi Gorman, president of worldwide advertising at Netflix, said the company has already “nearly sold out” of ad inventory.

The tier, “Basic with Ads,” will be Netflix’s lowest-priced plan at $6.99, which is cheaper than Disney+’s upcoming basic tier with ads at $7.99. Netflix announced in its press release that there will be an average of 4 to 5 minutes of ads per hour.

Initially, ads will be 15 or 30 seconds long and will play before and during shows and movies. Advertisers are able to target broadly by country and genre and prevent their ads from appearing with explicit content.

In September, we reported that Netflix plans to charge a $65 CPM on its ad tier, which is considerably higher than other platforms like TikTok (avg. $3 CPM).

To make this happen, Netflix partnered with Microsoft on technology, sales, and privacy. The company said that DoubleVerify and Integral Ad Science will be verifying the “viewability and traffic validity” of ads beginning in Q1 of 2023, and Nielsen is its measurement partner.

“What we do at launch will not be representative of the long-term opportunity of what the product will be. We’ll be fixed price at first but our roadmap is TBD and we’ll continue to innovate and lead in the space.”

-Jeremi Gorman during a Q&A portion of the event with reporters

Graph displayed during Netflix’s Oct. 13 press call

tiktok launches showtimes

TikTok is launching a native ad experience that shows full movie trailers and, at the click of a button, showtimes near users.

“With 52% of people discovering a new show, movie, or actor on TikTok* and 1 in 4 people who saw an entertainment ad having bought a ticket**, TikTok powers discovery and reinvents entertainment marketing.”

-TikTok Press Release

“Showtimes on TikTok” aims to capitalize off expected box office momentum with fourth quarter releases of Oscar contenders and the “Black Panther” and “Avatar” sequels.

Preview of Showtimes on TikTok from press release

While ticket sales are up from 2020, they still haven’t returned to pre-pandemic levels. Time will tell whether TikTok can bring people (especially Gen Z) back out to the theaters.

Domestic Movie Theatrical Market Summary 1995 to 2022
Source: The Numbers

*According to TikTok Marketing Science US Entertainment Study 2021 via Suzy, Base: US TikTok MAUs 18+
**According to TikTok Marketing Science US, TikTok Made Me Watch It Survey via Suzy, July 2021. Base: US TikTok MAUs 18+

Other news

  • John Song tweeted a thread of famous “how it started” vs. “how its going” ad campaigns.

That’s all for this week‘s Marketing Roundup. Check back next week for more news. And subscribe to our newsletter below for additional updates.